FTSE ticks up but A&L trading update hits banks

By Rebekah Curtis

LONDON, May 13 (Reuters) - British blue-chip shares edged up early on Tuesday, supported by overnight gains in U.S. and Asian markets, but banks capped gains after Alliance & Leicester (ALLL.L: Quote, Profile, Research) was hit by a trading update.

By 0756 GMT the FTSE 100 .FTSE was up 18.9 points, or 0.3 percent, at 6,239.5, as shares edged up across Europe.

Bucking the trend, Alliance & Leicester fell 5.4 percent after it took a 192 million pound ($376 million) hit to profit from assets tarnished by the credit crunch, taking its profit in the first four months to below 2007 levels.

Britain's seventh-largest bank said 139 million pounds of that hit came from its structured debt investments, with the remainder from changes in the fair value of its treasury investments.

Also in the sector, Lloyds TSB (LLOY.L: Quote, Profile, Research) and Barclays (BARC.L: Quote, Profile, Research) both shed 0.9 percent.

Elsewhere, U.S. stocks rose on Monday as the introduction of a faster BlackBerry spurred optimism about business spending on technology, while cooling oil prices eased inflation concerns. Asian shares gained as banks were bolstered by further signals the worst of the credit crisis may now be over.

On the UK economic front, British retail sales values fell for a second consecutive month in April, suggesting tighter credit conditions and rising household bills are forcing consumers to tighten their belts. [ID:nL12584179]

"In the light of the economic news flow it's hard to feel all that confident," said Mike Lenhoff, chief strategist at Brewin Dolphin. "But people do feel that the apprehension that was created by the destabilising influence of the credit crisis ... is no longer present," he added.