UK Market News

LONDON (ShareCast) - British Airways (LSE: BAY.L - news) and Royal Bank of Scotland (LSE: RBS.L - news) managed to post losses between them of over £2.5bn today, but that did not stop both being the best two performers today on the FTSE 100 index.

The state-controlled bank that on Tuesday announced another £33bn cash injection from the government lost £2.1bn in the three months to September compared to a profit of £1.9bn. Nine-month losses now total £2.06bn against a profit £1.8bn this time last year.

Impairment charges in the last quarter totalled £3.49bn against £5bn in the previous quarter and £1.4bn this time last year. Net income for the quarter fell to £8.8bn from £9.96bn. Operating losses narrowed to £1.5bn from £3.5bn in the second quarter.

British Airways reported a record loss of £292m and urged Unite to withdraw its plans for a strike ballot and resume talks with the carrier. The loss before tax of £292m, or £244m before restructuring costs, compares with a profit of £52m last year. Revenue was down 13.7% to £4.1bn. Net losses came to £208m.

Brokers suggested hopes that for both BA and RBS that the worse might be over spurred the gains, but the sentiment did not spread to Rentokil (LSE: 647054.L - news) even though its third quarter trading update included a profit before tax figure that was 8% above broker Panmure Gordon's forecast.

The broker is expecting full-year earnings forecasts to be revised upwards and, pending the company conference call, it pencilled in revised figures of £155m for full year profit before tax, versus previous expectations of £136.9m.

'We see the long term risk/reward profile looking very positive for this company, with significant potential for the bottom line to be improved through cost efficiencies before we consider cyclical upside,' the broker said. It currently has a 'hold' recommendation for the shares and a 100p target price.

Stockbroker Charles Stanley is more bullish than Panmure Gordon, and has an 'accumulate' recommendation on the stock.

'Today's update is another encouraging step in the recovery of the group and there are encouraging developments in the pipeline for this to continue into 2010,' reckons Charles Stanley analyst Tony Shepard.

FTSE 100 - Risers British Airways (BAY) 198.80p +6.71% Royal Bank of Scotland Group (RBS) 37.06p +5.25% Burberry Group (LSE: BRBY.L - news) (BRBY) 581.50p +2.56% Home Retail Group (HOME) 309.20p +2.49% Standard Chartered (LSE: STAN.L - news) (STAN) 1,607.00p +2.49% Invensys (LSE: ISYS.L - news) (ISYS) 296.70p +2.28% Schroders (LSE: SDR.L - news) (SDR) 1,126.00p +2.27% Intertek Group (LSE: ITRK.L - news) (ITRK) 1,279.00p +2.24%

FTSE 100 - Fallers Rentokil Initial (RTO) 105.00p -6.25% Old Mutual (LSE: OML.L - news) (OML) 106.40p -2.30% Admiral Group (LSE: ADM.L - news) (ADM) 1,035.00p -2.27% BG Group (LSE: BG.L - news) (BG.) 1,078.50p -1.55% Centrica (LSE: CNA.L - news) (CNA) 241.30p -1.51% Severn Trent (LSE: SVT.L - news) (SVT (SVTV.PK - news) ) 945.50p -1.41% 3i Group (III) 271.30p -1.27% Vodafone Group (LSE: VOD.L - news) (VOD) 135.80p -1.20%