FTSE close: BA down, RBS up

By This Is Money
Updated: 11:53 EDT, 15 December 2009

Regular updates throughout the day ...

17.00

The Footsie is off its worst levels of the day, but closed 34.8 points in the red at 5,280.5. Barclays (7.1p down at 284.55p) and HSBC (18.1p down at 701.8p) are among the worst performers as Greek rivals slump on worries about their country's budget deficit.

'It appears that the debt contagion is spreading as Austria's sixth-largest bank, Hypo Group Alpe Adria, was nationalized yesterday,' says James Hughes, Market Analyst at CMC Markets.

RBS, whose chairman today insisted it needed to pay 'commercial' bonuses to reward staff, boasts the biggest gains of any blue chip: 0.64p to 31.63p.

British Airways lost following yesterday's news that the cabin crew will strike for 12 days over Christmas. BA said it is mulling 'all options' to cope with the planned action by cabin crew over the Christmas period.

Broker UBS points out that the new measures workers object to are set to save the carrier about £100m a year. Shares were down 4.4p to 196.6p.

National Express has received 90.47% acceptances for its £360m rights issue, the bus and trains operator confirmed: shares were 4.7p down at 182.2p.

The Dow Jones opened lower on Wall St after US PPI and Industrial production figures came in much higher than expected, which has provoked fears that the US central bank may be forced to raise rates sooner than anticipated.

That has seen the dollar regain ground against the euro and the yen. If these fears are reinforced by tomorrow's US CPI figures then we could see further dollar strength and possible stock market weakness. The Dow Jones was last 20.9 points down at 10480.1.

13.30

The FTSE 100 index was down 43.1 points to 5,272.2.

11.15

Gold is down again today. The spot price is $1,114 per ounce, down nearly 12 cents. It fell sharply last week after hitting a high of $1,227 with the weakness extending into this week. The reason? The dollar appears to have regained its poise in the past week. Investors - and central banks - had been buying gold as an alternative to holding weakening dollars.

It follows an incredible decade for the asset, which has risen from less than $275 an ounce.

Money Week's Merryn Somerset Webb continues to make a persuasive argument for buying even after that incredible rally, with so much economic uncertainty ahead.

In real terms, the gold price hit a high of $2,300 in 1980. The gold bulls expect a repeat. F&C's Ted Scott sets out the bull and bear arguments (and remains a bull himself). Read his full explanation. And read more gold views here.

10.45

The market takes a dip, which might or might not be connected to November CPI coming in slightly higher than expected at 1.9%. The FTSE 100 was last 29.4 points down at 5,286.4.

10.30

Costa Coffee-owner Whitbread is one of the top risers in the Footsie after it agrees to buy eastern Europe-focused coffee shop chain Coffeeheaven £36m. Shares were 8p up at 1,388p.

Shares in SDL rise 12p to 383p as Piper Jaffray hikes its rating for the technology firm to 'overweight' from 'neutral' with an increased target price of 461p, up from 332p, and raises its estimates.

Robert Walters is 2.3p up to 183.3p after the recruitment firm says it expects to break even or report a small pretax profit for 2009, aided by cost controls and an improvement in trading conditions. Altium Securities upgraded its rating on the stock to 'buy' from 'sell', and hiked its target price to 200p from 140p.

Shares in Fiberweb top the FTSE small-cap risers' chart, up 8p to 66p, after the nappy-material maker says it expects full-year results to exceed expectations. The news prompted Panmure Gordon to raise its earnings estimates, up its target price to 102p from 96p and keep its 'buy' rating.

Brit Insurance added 7.2p to 188.2p after UBS upped its rating for the insurer to 'buy' from 'neutral', with its target price left unchanged at 211p.

Shares in transport group National Express fell 1.9p to 185p after just over 90% of the shares offered in its deeply discounted 105p-per-share rescue rights issue are taken up by shareholders.

09.00: Opening trading

British Airways shares were down by more than 2% today as investors digested the financial impact of the planned strike action by cabin crew.

With one leading analyst estimating the dispute could cost the airline between £10m and £30m a day, BA shares fell 5.1p to 195.9p in the first hour of trading. This was after little movement in BA shares yesterday.

The FTSE 100 index fell 9.3 points to 5306.1, after last night closing 1% higher following Abu Dhabi's £6bn lifeline to the Dubai government.

Banks lost some of yesterday's gains, with Barclays off 5.5p to 286.15p and HSBC down 13.2p at 706.7p. Royal Bank of Scotland was down 0.1p at 30.9p ahead of a shareholder meeting to approve its participation in the government's asset protection scheme.

On the results front, Carpetright shares were 1% higher after it posted better-than-expected half-year figures. Shares were up 10.5p to 933.5p as the group reported its best UK sales growth for the period since 2004 and said profits lifted 16% to £11m.

Transport group Go-Ahead also rose 14p to 1,285p after it reported continued strong trading at its bus division.