October 10, 2007 / 4:47 AM / 13 years ago

FTSE up as Northern Rock soars

LONDON (Reuters) - The FTSE 100 index ended 0.3 percent higher on Wednesday as shares in bank Northern Rock jumped and miners supported, but banks weighed.

The outside of the London Stock Exchange building is seen in the City of London, March 7, 2005. REUTERS/Toby Melville

The index ended 17.6 points higher at 6,633.0 after a choppy session where economic and corporate news was thin on the ground.

Northern Rock leading the charge on the upside, adding 32.3 percent to top the FTSE 100 leaderboard, as funds built stakes in the stricken mortgage lender, encouraged by new government guarantees that have boosted hopes of a rescue package.

Regulatory filings on Wednesday showed SRM Global, the hedge fund run by influential former UBS trader Jon Wood, had taken an interest of over 4 percent in Northern Rock via derivatives.

And as copper prices rose in line with other base and precious metals, mining stocks gained. Kazakhmys was up 4.2 percent, Antofagasta climbed 4.1 percent and Xstrata added 4.4 percent.

Also on the upside fund manager Schroders tacked on 5.7 percent as traders said the stock was a “chart breaker” after record highs in U.S. markets overnight.

European airlines also supported, with British Airways 4.6 percent higher as dealers said the sector was oversold and was benefiting from takeover activity and an improving economic backdrop for cyclicals.

“Really lacklustre (but) it’s perked up a bit in the last half an hour,” said David Jones, chief market analyst at CMC Markets on the FTSE 100. “A fairly directionless session today... There is no major economic news out in the States or UK. We had all-time highs on the S&P and Dow yesterday and it looks like the market is taking a bit of a breather.”

In merger and acquisition activity, retailer Woolworth jumped 9.3 percent in heavy volume on market talk of bid interest in the company from supermarket group WM Morrison.

Morrison, the country’s fourth-largest supermarket group, and Woolworths both declined to comment. Morrison’s shares lost 0.4 percent.

Cadbury Schweppes rose 2.6 percent after it said that it will focus on demerging its North American soft drinks unit rather than selling it.

The confectionery group also said in a trading statement that it had seen very strong third-quarter confectionery revenue growth of 10 percent.

BANKS DRAG

Banking stocks fell as traders cited profit-taking after recent gains despite hopes for a U.S. interest rate cut still underpinning markets.

HBOS lost 3.1 percent, Barclays dipped 1.5 percent and Lloyds TSB shed 1.3 percent.

Credit information provider Experian fell 7 percent after indicating a slowdown in second-quarter sales.

Experian, best known for running consumer credit checks for banks, retailers and other companies, said sales rose 6 percent in the first half, down from 7 percent in the first three months of the year.

But shares in Carphone Warehouse, Europe’s biggest mobile retailer, gained 2.7 percent after it beat forecasts with a 19.2 percent rise in second-quarter mobile phone connections and said it is confident about the full-year outlook.

“There is just nothing to say, it’s just so directionless,” said CMC’s Jones. “(But) people are bullish again — this trend in the FTSE is still positive.”

Looking ahead, U.S. weekly jobless claims on Thursday may give additional direction on the economy, Jones added.

Additional reporting by Rebekah Curtis and Ana Nicolaci da Costa

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