UK Market News

Wednesday February 11, 05:15 PM
Glance-FTSE ends up 0.5 pct; commods, Reckitt gain; banks weak

By Jon Hopkins LONDON, Feb 11 (Reuters) - Britain's top share index ended 0.5 percent higher on Wednesday, buoyed by a rally on Wall Street and gains from commodity stocks and Reckitt Benckiser (LSE: RB.L - news) which offset weakness in banks and property issues. The FTSE 100 closed up 21.18 points at 4,234.26 after trading in a range around 4,200 all session. It fell as low as 4,182.10 and climbed upto 4,244.53. U.S. blue chips were up 0.8 percent by London's close, recovering after sharp falls Tuesday when U.S. Treasury Secretary Timothy Geithner's plan failed to revive confidence. 'FTSE has clawed its way back into the black but perhaps the most defining characteristic is that the relatively small net move on the day is a distinct departure from the more volatile conditions that we've been seeing of late,' said Jimmy Yates, senior dealer at CMC Markets. Oil producers added the most points to the UK blue chip index as crude prices held steady, with BP (LSE: BP.L - news) , BG Group, and Royal Dutch Shell (LSE: RDSB.L - news) up between 1.3 to 2.1 percent. Miners also pushed higher, with Kazakhmys (LSE: KAZ.L - news) up 4.7 percent, Xstrata (LSE: XTA.L - news) ahead 4.3 percent and Rio Tinto (LSE: RIO.L - news) gaining 3.5 percent. Rio firmed on hopes the miner would announce a deal with top shareholder Chinalco to help slash its $39 billion debt burden when it announces results on Thursday. Randgold Resources (LSE: RRS.L - news) was the top FTSE 100 gainer, ahead 7.7 percent after HSBC (LSE: HSBA.L - news) upgraded the gold miner to 'overweight' from 'neutral'. Elsewhere, Reckitt Benckiser took on 7.6 percent after the household products group met forecasts with a 19 percent rise in 2008 net profits and set cautious 2009 sales and profit targets as the slowdown starts to bite. BANKS SHUNNED Weakness in UK banks was the main drag on the FTSE 100 index as further testimony to the House of Common's Treasury Select Committee kept the sector's travails in the spotlight. Investors were also concerned that the $2 trillion revamped U.S. bank rescue plan announced by Geithner on Tuesday may not be enough to alleviate the credit market turmoil. Lloyds Banking Group, Barclays (LSE: BARC.L - news) , Royal Bank of Scotland and HSBC were off between 0.8 and 7.9 percent. 'The concern for the UK financials is that there was some hope that if the so-called 'bad bank' in the U.S. was valued and then implemented, we could see that in the UK. Of course, that remains to be seen,' said Richard Hunter, head of UK equities at Hargreaves Lansdown (LSE: HL.L - news) . Meanwwhile Bank of England Governor Mervyn King said the central bank would probably have to ease monetary policy further and this could include buying gilts to boost the money supply. Sterling fell against the dollar while the short sterling contract rose after a key BoE report showed inflation receding sharply below target, opening the way for further monetary easing. Unemployment in Britain rose by 146,000 to 1.971 million in the three months to December, the highest level since 1997, but short of analyst forecasts it would breach 2 million. Britain's commercial property prices fell 3.5 percent in January, continuing their decline after they fell 26.8 percent in 2008 and underlining the stiff headwinds buffeting the UK economy. Property firm's Land Securities (LSE: LAND.L - news) , British Land (LSE: BLND.L - news) and Liberty International shed between 1.0 and 2.1 percent. GlaxoSmithKline (LSE: GSK.L - news) fell 1.3 percent after going ex-dividend. (Editing by David Cowell) Keywords: MARKETS BRITAIN STOCKS