London Off Early Gains

Ivaylo
13 Sep, 2006
New York City

Up more than 17 points mid-morning, the FTSE 100 was trading flat in late afternoon. The number of Britons claiming jobless benefit dropped sharply last month, but it was no surprise to markets. The rise in retailers led by Next and Marks & Spencer failed to inspire as a dull performance from large-cap mining and oil stocks weighed.

[R]9:30AM The FTSE 100 trades flat at mid-afternoon on weak mining and oil.[/R]
By 12:24 GMT, the FTSE fell 2.5 points, or 0.04%, to 5,893, broadly in line with continental Europe. In company news, Next surged as the retailer chain reported a strong performance from its directory arm in the first-half of the year. Rival Marks and Spencer gained 3.6%. Brambles rose 2.2% after the dual-listed Anglo-Australian group''s shares rose almost 4% in Sydney.

In the leisure sector, Intercontinental Hotels rose 1.1% after JP Morgan said it increased its price target on the hotelier stock. BAE Systems gained 0.8% after it reported interim results above market forecasts and Numis Securities said it expects to raise its 2006 and 2007 earnings per share forecasts for the company.

Wolseley Group gained 1.85 on relief after San Francisco Federal Reserve President Janet Yellen said that the US housing market was slowing roughly as the Federal Reserve has expected. Vodafone added 0.8% as UK telecoms regulator Ofcom said it had proposed new controls on wholesale mobile voice call termination charges that would come into effect when the current regulation expires in March 2007.

Miners were mixed. Some gained with Antafogasta up 1% while Vedanta Resources Xstrata was 1.3% down. Base metals were under pressure as fund liquidation spilt over from the previous session, but traders said metals fundamentals had not really changed.

BP rose 0.4% after JP Morgan lifted the company to overweight from neutral and Royal Dutch Shell was down 0.75 in the wake of its receiving the biggest fine of 108 million euros from the EU commission for fixing prices of road surface material bitumen in the Netherlands.

Man Group led the decliners. The hedge fund operator declined after last week fall in the NAV of its flagship AHL Diversified Futures fund. Other major decliners included Schroders which fell 2.1%.