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FTSE Close: RBS, HSBC & Rolls-Royce lower

By Ed Monk for Thisismoney.co.uk
Updated: 13:13 EDT, 5 November 2010

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17.00 (close)

Friday feeling: Shares are finishing the week strongly.

The FTSE 100 Index shook off earlier losses and continued its recent rally today after better-than-expected job figures in the US lifted the market.

The top flight, which is at its highest level since June 2008, closed 12 points higher at 5875.4, after the US Labor department reported a total addition of 151,000 jobs in October, the first gain since May.

The FTSE gains followed a major week for markets after the Federal Reserve's fresh stimulus for the US economy triggered a wave of buying.

The dollar pulled back from its lows after yesterday's sharp falls, and was just up on the pound at 1.62. Poor retail sales in Europe hit the euro, which was down against sterling at 1.15.

The latest rise in London came despite uncertainty in the banking sector following updates from Royal Bank of Scotland and HSBC.

RBS shares initially started on the front foot after it said bad debt impairments continued to drop and it achieved underlying earnings of £726m for the third quarter. Overall losses for the period were £1.4bn after its results continued to be skewed by volatility in accounting charges.

But with the fourth quarter market environment set to remain challenging, particularly in investment banking, RBS shares dropped 2.1p to 45p.

Pressure on the sector also came from HSBC after it said its third quarter profits grew more slowly than in the first half. Bad debts continued to fall but shares were 12.1p lower at 683p, a decline of more than 1%.

Lloyds Banking Group also retreated, down 0.4p to 69.8p, despite impressing investors earlier this week with the appointment of Santander's UK boss as chief executive.

Joining RBS at the top of the fallers board, Rolls-Royce lost another 5% after Qantas said the engine failure that forced an Airbus A380 to make an emergency landing was "probably" caused by a material failure or a design fault. Shares fell another 30.5p to 591p after dropping 5% yesterday.

Military kit firm Cobham has also endured a difficult week after its warning that its technology divisions were unlikely to grow revenues in 2010 due to delays in winning US contracts. Shares remained under pressure today with a decline of 3.2p to 204.8p.

In other corporate results, Carphone Warehouse shares jumped 10% - up 32p to 340p - after strong sales of smartphones in the UK and United States prompted it to raise its earnings guidance for the year. It also told investors that it planned to pay its first dividend as a slimmed down business.

And medical devices firm Smith & Nephew jumped 5%, up 29p to 587.5p, on news that its third quarter earnings figures were not as weak as some analysts had feared beforehand.

The biggest Footsie risers were Vedanta Resources up 129p at 2319p, Smith & Nephew ahead 29p at 587.5p, Eurasian Natural Resources up 42p at 991.5p, and Invensys ahead 13.2p at 313.5p.

The biggest Footsie fallers were Rolls-Royce down 30.5p at 591p, Royal Bank of Scotland off 2.1p at 45p, Rexam down 6.5p at 318.5p, and HSBC off 12.1p at 683p.

16.00: The Footsie is closing in on its highest finish in more than two years. The index is up 24.77 points at 5887.56.

15.05:

With the close in sight, the FTSE 100 is finishing strongly, up 29.02 points to 5891.81.

After RBS and LLoyds reported this week, we have ve rounded up some expert opinion on what investors can expect from the shares. More than one is telling investors to get out while they can.

On Wall Street, the Dow Jones is level in early trading.

13.55:

As we head towards the weekend, the Footsie is closing in on it's higest level since June 2008.

The FTSE 100 is just about in the black for today - 4.22 points higher at 5867.01.

In addition to corporate updates from Rentokil, HSBC and RBS, there is also news on Cobham and Smith & Nephew.

And medical devices firm Smith & Nephew jumped 6%, up 34p to 592.5p, on relief that its third quarter earnings figures were not as weak as some analysts had feared beforehand.

11.10:

A busy day in corporate news sees Rentokil and HSBC report. HSBC today reported lower profit growth in the third quarter and falling revenues in a further sign of a slowdown in the sector's bounceback.

The bank also warned of easing growth in emerging markets, where the group generates a large slice of its profits. HSBC shares have suffered accordingly and sit 8.9p down at 686.20.

No such woe for Rentokil. An explosion of bed bugs in New York helped the global pest control firm to post a 16% rise in adjusted pre-tax profits to £57.3m, beating City expectations. Rentokil shares fell, though, down 1.95p to 98.35p.

Overall, the FTSE 100 is 22.82 points down at 5839.97.

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10.20:

The FTSE 100 is striving to maintain strong gains from yesterday as investors took profits while Rolls-Royce, RBS and HSBC suffered hefty losses.

The Footsie is reaching for its highest level in more than two years after jumping more than 100 points on Thursday. But at 10am the blue chip index was 12.01 points lower with investors happy to book profits.

There were updates from Royal Bank of Scotland and HSBC. RBS shares rose quickly in early trading but soon fell back to languish among the heaviest fallers – 1.23p, or 2.61% lower at 45.91p.

RBS said bad debt impairments continued to drop and it achieved underlying earnings of £726m for the third quarter. Overall losses for the period were £1.4bn as its results continued to be skewed by volatility in accounting charges.

HSBC was also lower after it's update, falling 14.2p to 680.9p. HSBC reported lower profit growth in the third quarter and falling revenues in a further sign of a slowdown in the sector's bounceback.

But the biggest faller this morning has been Rolls-Royce. The stock came crashing to earth -22.5p, or 3.6%, down at 599p – after its A380 jet engine did much the same in the skies above Singapore. In other corporate results, Carphone Warehouse shares jumped 8% - up 24.25p to 332.25p - after it raised its earnings guidance for the year and said it planned to pay its first dividend at the end of the financial year.

On Wall Street later today, the Dow is expected to fall. Global markets will watch US non-farm payroll figures for a health check on the world's largest economy.

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