Treading water ahead of key day

Published on Tuesday 10 November 2009 19:39

LONDON FTSE 100 CLOSE 5,230.55 -4.63

BRITAIN'S FTSE 100 ended a four-day rising streak yesterday, with weakness at Vodafone and mixed news from the banking sector weighing on shares.

The index had jumped by almost 2 per cent on Monday, but a lack of economic news left the index with no direction yesterday. CMC Markets analyst James Hughes said yesterday's "nothing" session would contrast with a potentially "pivotal" day today.

"Tomorrow sees the both the unemployment data and the inflation report out of the UK on what could be a pivotal day for the UK quest for recovery," Hughes said.

Shares in more than two-thirds of the FTSE 100's members fell yesterday. However, strong gains from HSBC, one of Britain's largest companies, and modest falls elsewhere meant the index dropped just 4.63 points to 5,230.55. HSBC rose after revealing that underlying profits in the first three quarters of the year were ahead of the same time last year, pushing shares up 4 per cent to 720p.

Barclays, meanwhile, fell sharply despite restoring dividend payments, closing down 5.1 per cent at 325.35p. Lloyds, which announced thousands of job losses, was down 0.01p to 85.21p while Royal Bank of Scotland eased 0.36p to 39.03p.

Vodafone fell on signs of strong competition at its Indian business and a further fall in UK revenues. Despite increasing its cost-cutting targets, the mobile phone giant closed 2p lower at 135.6p.

Randgold Resources, the gold miner, led the sector downwards after posting lower than expected profits for the third quarter. Randgold dropped 202p, or 4.2 per cent, to 4,577p, while Fresnillo eased 32.5p to 842.5p and Kazakhmys dropped 34p to 1,252p.

Crude oil dropped as Hurricane Ida weakened, easing fears of storm damage in the Gulf of Mexico, dragging oil companies lower. Cairn Energy eased 70p to 2,820, Tullow Oil was 2p off at 1,269p and BP shed 1.8p to 593.4p. Royal Dutch Shell bucked the trend, rising 6p to 1,855p.

Among the risers, Imperial Tobacco jumped after announcing that chief operating officer Alison Cooper will replace the cigarette company's long-time chief executive, Gareth Davis.

Imperial was also boosted by a 39 per cent rise in full-year profits to 2.2 billion, boosting shares by 2.3 per cent, or 42p, to 1,870p.

Medical instruments firm Smith & Nephew rose 10.5p to 558.5p, after analysts at Goldman Sachs lifted its target price on hopes for improving conditions in US markets.

Confectionery group Cadbury ticked up 2p to 763p, as analysts backed its rejection of Kraft's 9.8 billion hostile takeover offer on Monday.

Andrew Wood, a senior analyst at Bernstein, agreed with Cadbury's claim that the offer was "derisory", predicting that it will get little traction from shareholders. "Kraft may even struggle to meet with some major shareholders on the basis of this offer," Wood wrote in a note yesterday.

Perth-based Scottish & Southern Energy, which reports its interim results this morning, closed unchanged on 1,080p.

Outside the top flight, Yell Group, owner of the Yellow Pages, closed 3 per cent lower after announcing a 660 million placing and open offer.

The debt-laden group rose in early trading on news of a larger than expected cash call, but closed down 1.75p at 46.25p.

Among the small caps, software group Kewill rose 7 per cent to 99p, after posting a near-50 per cent rise in interim pre-tax profits and announcing plans for a 7.5m share placement to fund acquisitions.