FTSE supported by firmer oils; BP weak

* FTSE 100 up 0.5 pct lifted by firmer miners

* Oils weak; BP falls as dividend uncertainties remain

* Lloyds Banking, Home Retail hit by broker downgrades

By Jon Hopkins

LONDON, June 14 (BestGrowthStock) – Firmer miners helped Britain’s
leading shares index higher at midday on Monday, as investors’
risk appetite improved, but further falls by BP (BP.L: ) weighed
on the energy sector.

At 1040 GMT, the FTSE 100 index (.FTSE: ) was up 25.99 points
or 0.5 percent at 5,189.67, extending its recent rally into a
fourth session.

“The theme today has been investors moving away from safety
asset classes to hunt risk and this could be a good sign for the
near term outlook, as long as there are no more sovereign debt
aftershocks,” said Joshua Raymond, market strategist at City

Miners benefited as base metal prices extended Friday’s
rally, underpinned by gains in oil (CLc1: ) and gold.

Silver miner Fresnillo (FRES.L: ) was the top FTSE 100 riser,
up 5.0 percent, while Kazakhmys (KAZ.L: ), Eurasian Natural
Resources (ENRC.L: ), Vedanta Resources (VED.L: ), Anglo American
(AAL.L: ) and Rio Tinto (RIO.L: ) took on 2.4 to 3.6 percent.

But energy issues were the biggest blue chip fallers,
weighed down by further falls from BP, off 5.8 percent on
lingering doubts about the outlook for dividends in the wake of
the huge spill in the Gulf of Mexico.

Investors were awaiting the outcome of a BP board meeting on
Monday to discuss whether the oil giant will cut or defer its
second-quarter dividend meeting.

Peer BG Group (BG.L: ) lost 0.6 percent, but Royal Dutch Shell
(RDSa.L: ) added 0.5 percent supported by the firmer crude price
and an upgrade in stance for the European integrated oils sector
to “bullish” from “neutral” by Nomura.


Banks found support as investors’ risk appetite returned,
with global heavyweight HSBC up 0.8 percent, while Standard
Chartered (STAN.L: ) added 0.7 percent.

Barclays (BARC.L: ) took on 2.7 percent. Its investment bank
arm said it plans to launch a European “dark pool” trading
platform, building on its U.S. platform as part of plans to
expand its equities business globally. [ID:nLDE65D0HX]

And Royal Bank of Scotland (RBS.L: ) added 1.7 percent.
Santander (SAN.MC: ), the Spanish bank, is set to buy 318 branches
from RBS, having submitted an indicative offer of about two
billion pounds in April, the Guardian reported.

But Lloyds Banking Group (LLOY.L: ) only added 0.1 percent.
The bank is considering a stock market flotation of the chain of
600 branches that it is being forced to sell by European Union
regulators, the Sunday Times said. [ID:nLDE65C09K]

Morgan Stanley, meanwhile, cut its stance on Lloyds to
“underweight” from “equal-weight”, saying it faces the biggest
risk among UK banks of missing consensus beyond full-year 2010.

Also among the blue chips fallers, Home Retail Group
(HOME.L: ) shed 1.3 percent as JP Morgan cut its stance on the
Argos stores owner to “underweight” from “overweight” following
last week’s disappointing trading update.

Britain’s economy will grow slower from 2011 than the
previous Labour government expected but state borrowing will
fall slightly faster than originally thought, the Office for
Budget Responsibility said on Monday.

The independent OBR, created by the new Conservative-Liberal
Democrat coalition, said the economy should grow 1.3 percent
this year, in line with previous forecasts, but growth would
only rise to 2.6 percent in 2011.

Labour had expected the economy to grow between 3 and 3.5
percent next year. The OBR also pencilled in slower growth than
Labour for the years ahead. [ID:nWEA6006]

U.S. stock futures (DJc2: ) (SPc2: ) (NDc2: ) pointed to a higher
open on Wall Street on Monday, adding to last week’s advance and
tracking gains in global equities.

Investment Research

(Editing by David Cowell)

FTSE supported by firmer oils; BP weak