Weak insurers hurt Britain’s FTSE; banks firm

* FTSE 100 down 0.3 pct

* Old Mutual down; HSBC close to dropping Nedbank deal-FT

* Rolls-Royce, Cobham rise on Goldman Sachs upgrades

* Bernanke speech eyed for clues on Fed’s stance

By Tricia Wright

LONDON, Oct 15 (BestGrowthStock) – Britain’s top share index fell
slightly on Friday, pressured by insurers led down by Old Mutual
(OML.L: ), while banks staged a recovery, as investors awaited a
speech by Federal Reserve Chairman Ben Bernanke.

By 0811 GMT, the FTSE 100 (.FTSE: ) was down 15.09 points, or
0.3 percent, at 5,712.12.

The index closed 20.14 points, or 0.4 percent, lower on
Thursday at 5,727.21, having ended at its highest closing level
since late April on Wednesday.

Citigroup said its year-end target for FTSE 100 index
remains 6,000.

Old Mutual (OML.L: ) was the biggest FTSE 100 faller, off 3.9
percent, as the Financial Times said HSBC (HSBA.L: ) could drop
out from an $8 billion bid for South Africa’s Nedbank (NEDJ.J: ),
which is majority owned by Old Mutual.

Sector peers were under pressure as Citigroup downgraded the
UK life insurance sector to “underweight” from “neutral” in a
strategy note.

Banks (.FTNMX8350: ), the heaviest fallers on Thursday on
worries about possible cash raisings, recovered, adding the most
points to the index. Royal Bank of Scotland (RBS.L: ) and Lloyds
Banking Group (LLOY.L: ) were the best off, both up 2 percent.

HSBC shares rose 0.5 percent, while Standard Chartered
(STAN.L: ), which on Wednesday launched a $5.3 billion rights
issue, put on 0.4 percent.

DEFENCE STOCKS FIRM

Elsewhere, aircraft engine maker Rolls-Royce (RR.L: ) and
aerospace electronics group Cobham (COB.L: ) were good gainers, up
1.6 and 2.2 percent, respectively, after Goldman Sachs upgraded
both firms to “buy” from “neutral”.

“The theme stays the same in that we’re getting into full
swing in terms of the third-quarter earnings season, especially
in the U.S., and so far, so good,” Richard Hunter, head of UK
equities at Hargreaves Lansdown, said.

“It’s now a question of the potential next round of QE
(quantitative easing) being formalised by the States and
potentially in the UK as well, but until such time as that
happens, there’s still an element of nerves around whether the
next QE programme will actually be successful,” he said.

Investors were waiting for Bernanke’s speech on Friday which
could provide clues on the Fed’s next policy steps.

Financial markets, which widely expect the U.S. central bank
to begin a new program of buying longer-term U.S. Treasury
securities at its Nov. 2-3 meeting, will look for clues about
the scope of the programme. [ID:nN14141178]

Ahead of that speech, investors will look at a welter of
U.S. data including September consumer prices and retail sales
numbers.
(Editing by Hans Peters)

Weak insurers hurt Britain’s FTSE; banks firm