FTSE 100 close: Whitbread up, Lloyds down

By Ed Monk for Thisismoney.co.uk
Updated: 12:11 EDT, 13 October 2009

London shares took a late hit today after a weak open on Wall Street.

Taking stock: Markets are expected to open lower after gains yesterday.

The FTSE 100 closed 56.02 lower at 5,154.15 after disappointing results from Johnson & Johnson in the US saw the Dow Jones fall on the open.

Traders on both sides of the Atlantic are waiting for the first third-quarter results season to get into swing.

David Morrison, market strategist at GFT Global, told Reuters: 'We're taking a bit of a pause first thing after the highs hit yesterday, with investors still having a desire to push higher but wanting to see the outcome of the third-quarter US corporate earnings before running too far ahead.'

The stock market showed little response to today's inflation figures which came in lower than expected, at 1.1%.

But as the threat of runaway prices subsides, influential voices such as investing guru Anthony Bolton have predicted that central banks will keep interest rates low, leaving investors with shares as the only option if they want to grow their money.

UK banks are waiting for news from American counterparts JP Morgan Chase, Citigroup, Goldman Sachs and Bank of America later this week.

Barclays led the falls, down 3.4%, or 12.65p to 360p. It was followed by Lloyds Banking Group which fell 1.89p to 89.72p, after the Daily Telegraph it would have to pay the Government a break fee of more than £1 billion to withdraw from its asset protection scheme.

HSBC was also down 13.9p to 704.1p. The bank hopes to list its shares in Shanghai next year, becoming one of the first overseas companies to do so, its chief executive Michael Geoghegan told Reuters in an interview on Monday.

Resilience came from Whitbread, the UK's largest hotel and restaurant operator, which reported stronger the expected profits for the six months to September.

Whitbread led the leaderboard of FTSE 100 stocks throughout the day, rising 3% following today's announcement, as a strong performance by coffee chain Costa and recent signs of trading improvement at hotel chain Premier Inn boosted investor sentiment. But the stock later fell back to close just 0.47% higher at 1,296p.

Tobaccos and beverages were among the top performing sectors as defensive considerations returned, with drinks group Diageo up 0.2% and British American Tobacco ahead 1.23%.

Utilities got a boost from a positive note on the sector from Cazenove, with Severn Trent up 0.36% as the broker upped its rating on valuation grounds.

Outside the top flight, ITV shares surged 6.8% or 3.22p to 50.55p after it announced plans for a £120m bond issue and said advertising revenues continued to show signs of improvement. Analysts said the bond issue showed the company was still functioning despite its leadership crisis.

Building firm Carillion meanwhile added 1p to 288p after confirming a support services deal with BT worth a potential £1bn over seven years.

But housebuilder Bellway was down 1.43% - or 11.5p - to 794p as investors took profits after better than expected annual results. The firm is spending £120m on new land and slashed debt by more than £180m to strengthen its balance sheet.

Tomorrow's agenda

• Unemployment will hog the headlines as the latest figures on the number of Brits out of work are released. Joblessness will rise for the 19th month in a row, with HSBC predicting a rise in the claimant count of 20,000, bringing the rate out of work to 5.1%. Close attention will be paid to youth unemployment in particular, with the number of those aged between 16 and 24 out of work expected to exceed, or come close to, the one million mark.

• Fashion house Burberry, whose catwalk show closed London Fashion Week last month, posts second-quarter results. The luxury label is expected to say that it is clawing customers away from its rivals, although like-for-like sales are tipped to be broadly flat.