Sluggish session despite BP rumours
THE Footsie edged lower in a sluggish session yesterday, despite rumours over funding plans from beleaguered oil giant BP sparking some interest.
BP, which plunged to below 300p and hit a 14-year low last month, added more than 3 per cent or 11.3p to 333.3p after talk that it could raise 6 billion by selling off a stake to rival oil groups or sovereign wealth funds.
The share gains came despite the clean-up costs of the Gulf of Mexico spill passing 2 billion. With US markets closed for the Independence Day holiday, the Footsie eventually finished 14.56 points lower at 4,823.53 in a listless beginning to the week.
In the currency markets, sterling drifted slightly lower to $1.51 against the dollar, and lost some ground against the euro, trading at €1.20.
As well as BP, shares in Marks & Spencer rose almost 3 per centor 8.8p to 341.9p as the market positioned itself ahead of the company's first quarter trading update tomorrow. Despite the more nervy retail climate, Nomura analyst Fraser Ramzan expects like-for-like sales growth in food of 1.5 per cent, with a 4 per cent advance in general merchandise, which includes clothes.
In a strong session for the retail sector, Next added 25p to 2,014p, B&Q owner Kingfisher added 2.5p to 210.3p and Burberry cheered 5.5p to 745p.
This was despite disappointing monthly growth figures in the services sector, which offered fresh signs of a consumer spending slowdown.
The other big rise in the FTSE 100 Index came from school books-to-Penguin publisher Pearson, after analysts at Royal Bank of Scotland removed their "sell" rating on the stock. Pearson rose more than 2 per cent, or 20.5p to 887.5p.
Telecoms firm Cable & Wireless Worldwide also shrugged off downbeat broker comments to add 1p to 86p after Morgan Stanley began coverage with an underweight rating.
British Airways however was a faller, down 1.8p to 186.6p after it carried 11.1 per cent fewer passengers in June, reflecting the impact of strike action by cabin crews.
Banks and mining stocks were also under pressure as Royal Bank of Scotland dropped 1p to 39p and Barclays fell 7.75p to 259.2p. Metal prices meanwhile came off overnight highs, denting miners. Eurasian Natural Resources led the sector lower, off 23.5p to 818p.
Plumbing supplies firm BSS rose after it backed a cash and shares takeover offer from builders' merchant Travis Perkins. The proposal valued BSS at 558 million, slightly higher than previously thought, and sufficient for its shares to rise another 10.8p to 427p. Travis Perkins shed 1.5p to 753p.