FTSE up 0.3 pct; banks gain, oils, miners weak

By Tricia Wright

LONDON (BestGrowthStock) – Britain’s top share index was up 0.3 percent in early trade Thursday with weakness in miners and oils on lower commodity prices lower offset by firmer banks after full-year results from Royal Bank of Scotland’s (RBS.L: ).

At 0946 GMT, the FTSE 100 (.FTSE: ) was up 15.94 points at 5,358.29, after it rose 0.5 percent on Wednesday.

Miners were the biggest drag on the index as metal prices fell with a weaker dollar. Eurasian Natural Resources (ENRC.L: ), Xstrata (XTA.L: ) and Rio Tinto (RIO.L: ) were among the worst off, shedding 1.3 to 1.9 percent.

Energy stocks were also on the back foot as the crude price fell too. Cairn Energy (CNE.L: ), BP (BP.L: ) and Royal Dutch Shell (RDSa.L: ) dropped 0.4 to 0.5 percent.

The dollar rose as the euro fell (Read more about the trembling euro. ) pressured again after Standard and Poor’s said it may cut Greece’s BBB+ rating by one or two notches within a month.

“The action more than anything else has actually been on the currencies which have been seriously hit and that of course really what is driving the markets at the moment,” said Angus Campbell, head of sales at Capital Spreads.

“As a result there’s a bit of risk aversion this morning. (The FTSE 100) has recovered a little bit from the lows, but it still goes to show that there are continual underlying concerns that the euro zone is in trouble.”

Investors also had a big batch of mixed blue chip results to digest on Thursday.

Capita (CPI.L: ) was the biggest FTSE faller, down 3.4 percent after the outsourcing firm’s full year results disappointed slightly, with Seymour Pierce highlighting fears over the organic growth rate at the group.

British American Tobacco (BATS.L: ) shares shed 2 percent as the world’s second-biggest cigarette maker’s in-line full-year results also failed to excite.

BAT 2009 posted adjusted diluted 2009 EPS of 153 pence, largely in line with a company conducted survey consensus of 152.9 pence.

Credit Suisse said it does not expect material changes to 2010 consensus forecasts and noted BAT shares had a strong run into the numbers.

Peer Imperial Tobacco (IMT.L: ) dropped 0.6 percent.


RBS, however, topped the FTSE 100 leader board, putting on 5.5 percent, after its 2009 operating loss shrank to 6.2 billion pounds, despite a jump in bad debts, with analysts citing relief that there were no nasty surprises.

The sector as a whole added strength to the blue chips inspired by RBS’s numbers. Lloyds Banking Group (LLOY.L: ), scheduled to post its full-year results on Friday, added 1.9 percent, while Barclays (BARC.L: ), HSBC (HSBA.L: ) and Standard Chartered (STAN.L: ) rose 0.6 to 1.1 percent.

Insurer RSA Insurance (RSA.L: ) added 1.4 percent after the firm delivered above-forecast 2009 results and reported a good start to 2010, with net written premiums up 4 percent to 6.7 billion pounds.

Centrica (CNA.L: ) gained 1.8 percent after the gas distributor reported better-than-expected full-year results, with EPS of 21.7 pence 6 percent ahead of Goldman Sachs’ forecast.

The broker also highlighted Centrica’s above-forecast dividend and net debt level and repeated its ‘conviction buy’ rating on the stock.

Investors will seek more clues on the health of the UK economy when the CBI distributive trades data is released, later than usual, at 1245 GMT.

U.S. durable goods orders will be a focus in the afternoon.

Stock Research Tools

(Editing by Mike Nesbit)

FTSE up 0.3 pct; banks gain, oils, miners weak