Thursday May 15, 09:24 AM
London shares lower, as NY closes off highs; banking stocks weigh UPDATE
LONDON (Thomson Financial) - UK blue chips were lower early on, after Wall Street closed off highs, while Barclays (LSE: BARC.L - news)
lost ground after its in line statement, and other banks followed suit, notably RBS (LSE: RBS.L - news) which fell over 16 pct as the stock traded ex-rights today.
At 9:04 a.m., the FTSE 100 index was down 30.4 points at 6,185.6, while the FTSE 250 (news) index edged up 2.8 points at 10,278.1.
Overnight in the United States, the Dow Jones Industrial Average was up 66.20 points to 12,898.38.
The S&P 500 index rose 5.62 to 1,408.66, while the Nasdaq Composite (NASDAQ: news) index added 1.58 to 2,496.70.
In Asian markets, by midday Hong Kong's Hang Seng (news) index was down 132.15 points at 25,401.33, although Japan's Nikkei (news) was 133.19 points higher at 14,251.74 at last check.
Oil prices continued lower in Asian trade on Thursday after an unexpectedly low rise in United States crude stocks.
New York's main oil futures contract, light sweet crude for June delivery, dropped 43 cents to $123.79 per barrel.
Brent North Sea crude for June dropped 31 cents to $121.55.
In UK equity news, banking stocks dominated the loserboard early on, as Barclays lost 5-1/4 to 422, after saying in its trading statement its group profit for the three months to March 31 came in below the level reported during last year, while its Barclays Capital investment banking unit absorbed a net loss of 1.006 billion pounds during the first quarter.
In reaction, Cazenove said that while the comments on trading are broadly as expected, it thinks the market will remain focused on capital ratios.
Other banking issues performed poorly, with RBS down 16.68 percent, or 53-1/4 pence at 266, as the stock traded ex-rights today, while Lloyds TSB was down 9-1/2 at 401, as Societe Generale (Paris: FR0000130809 - news) cut its rating to 'hold' from 'buy' Thursday.
Sector peers fell, with HBOS (LSE: HBOS.L - news) 23-1/4 lower to 447 and Alliance & Leicester down 15-1/4 to 430-1/2.
Away from financials, the mining sector also weighed on the blue chips, falling back from recent gains made on sector consolidation hopes. The losses today came despite Vedanta Resources (LSE: VED.L - news) reporting decent full year numbers.
Vedanta fell 57 to 2,475, BHP Billiton (LSE: BLT.L - news) dropped 59 at 2,059, Rio Tinto (Frankfurt: 855018 - news) lost 150 at 6,731 and Antofagasta (LSE: ANTO.L - news) fell 12-1/2 at 761.
In broker led movements, Sainsbury (LSE: SBRY.L - news) fell 8-1/2 pence to 366, after Deutsche Bank (Frankfurt: DB9999 - news) downgraded the supermarket chain to 'sell' from 'hold' this morning.
On the upside, National Grid (LSE: NG.L - news) added 10 to 714-1/2 after it reported a rise in full year adjusted pretax profit to 1.8 billion pounds, from 1.5 billion pounds last year.
Investors also cheered results from SABMiller (LSE: SAB.L - news) , up 36 at 1,239, after its full-year pretax profit beat analyst expectations.
Staying with earnings news, BT (LSE: BT-A.L - news) added 3/4 at 224, as the telecoms group reported a solid set of fourth-quarter numbers and raised its dividend.
Meanwhile, 3i Group reported a 37 percent increase in assets under management in its full-year results and a diluted net asset value per share of 10.77 pounds, up from 9.32 pounds in 2007 and above analyst expectations.
Shares added 3-1/2 to 872-1/2,
A positive trading update helped Cadbury off to a good start, up 18 to 665. The company said following the demerger of Americas Beverages, the new company is off to a strong start.
A citigroup upgrade meant Firstgroup (LSE: FGP.L - news) rallied, up 3-1/2 to 565, as the broker moved to 'buy' from 'hold' following a drop in the share price after results yesterday.
On the second line, DSG International (LSE: DSGI.L - news) slumped 9 percent, or 6-1/4 pence at 63, after the troubled European electricals retailer, said it will slash its total dividend payout by 50 percent, this was compounded by Seymour Pierce downgraded its stance to 'sell' from 'hold' in reaction.
A broker downgrade also hit WH Smith, down 16-3/4 to 400-3/4, as Citigroup (NYSE: C - news) cut its recommendation to 'hold' from 'buy' on valuation.
Elsewhere, Findel (LSE: FDL.L - news) 's full year results failed to impress investors as the shares lost 12-3/4 pence at 267, while news Balfour Beatty (LSE: BBY.L - news) is to place 43.32 million shares, sent it 22 pence lower at 431-1/2
Uninspiring trading updates from Ferrexpo (LSE: FXPO.L - news) and Informa (LSE: INF.L - news) sent shares down 16-3/4 to 381-1/4 and 10-1/4 at 373-3/4 respectively.
Among midcap risers, Telecity was on top of the leaderboard, up 12 at 240, after a trading update which Landsbanki said was confident, leading it to upgrade its full year 2008 EBITDA.
Similarly, Tullett Prebon (LSE: TLPR.L - news) rose 21-1/2 at 483-1/2 after its own bullish statement, the company said it expects a good outcome for the year and continues to actively pursue acquisition opportunities.
Finally, Euromoney reported 23 percent higher first-half adjusted underlying pretax profit at 30.5 million pounds this morning, helped by a reduction in net interest costs.
Shares added 19 pence to 394.
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