FTSE Close: BT, miners higher; RBS down

By Adrian Lowery
Updated: 12:25 EDT, 11 November 2010

17.15 (close)

The London market struggled to find direction today as sentiment was weighed down by fears over Ireland and caution on the outcome of the G20 summit in South Korea.

The FTSE 100 Index slipped 1.7 points to 5815.2, but avoided heavier falls as Wall Street slumped deep into the red.

America's Dow Jones Industrial Average dropped more than 100 points after communications giant Cisco gave a bleak outlook over its prospects in the age of austerity, and its shares plummeted 17%.

There was also anxiety as investors waited for news on the G20, where world leaders sought to resolve tensions over currencies and trade deficits.

In London, the banking sector also pulled the Footsie down with Royal Bank of Scotland leading the sector's retreat amid fears over its exposure to the financial crisis in Ireland.

RBS, which owns Ulster Bank, saw its shares slump more than 4% at one stage as Ireland's cost of borrowing hit its highest level since the launch of the European single currency. Shares closed down 1.1p to 41p.

Other banks followed suit with Barclays down 4.7p to 284.9p, HSBC off 5.6p at 684p and Standard Chartered declining 3p at 1885.5p.

The pound continued to rally following gains yesterday after the Bank of England signalled no immediate money-boosting efforts.

It also benefited from a weaker euro, hit by the Ireland bail-out anxiety, with sterling at 1.18 euros.

Among stocks, British Airways sank towards the bottom of the Footsie after a planned ballot of cabin crew on resolving their dispute with the airline was suspended, dashing hopes of an end to the bitter row.

Unite had been due to ask its 11,000 members whether they wanted to accept a suggested deal, but leaders of the union's cabin crew branch decided they could not support recommending the offer. Shares were down 3% or 8.6p at 264.2p.

BT headed the risers board after the telecoms giant impressed analysts with solid half-year figures.

A strong performance in broadband meant underlying profits for the second quarter were up 13% at £496m, beating City expectations and prompting BT to raise its forecast for full-year underlying earnings to £5.8bn. BT shares were 6% higher, up 9.7p to 169.1p.

Outside the top flight, shares in JJB Sports plummeted after analysts widened their forecasts for full-year losses to around £40m.

This followed an update showing that promotional efforts and its Serious about Sport turnaround strategy had failed to sustain a sales revival. JJB shares dropped 1.6p to 8p.

Restaurant Group was another faller despite reporting a return to sales growth in the third quarter and forecasting a boost for its leisure park sites due to a line-up of blockbuster films in cinemas in the run-up to Christmas.

The Garfunkel's owner remains on track to meet full-year forecasts, but shares fell 8.1p to 279.1p.

The biggest Footsie risers were BT up 9.7p to 169.1p, Antofagasta ahead 67p to 1472p, Fresnillo up 64p to 1460p and Kazakhmys up 57p to 1551p.

The biggest Footsie fallers were Icap down 20.4p to 473.6p, Aviva off 13.4p to 403.1p, British Airways down 8.6p to 264.2p and Sage Group down 7.4p to 264.9p.

15.25:

An afternoon update - the banking sector has pulled FTSE 100 down 16.8 points to 5,800.1, with the Irish debt crisis causing jitters in all markets.

Over on Wall Street, the Dow Jones is 83.6 points down in early trading at 11,273.4, after communications giant Cisco gave a bleak outlook over its prospects in the age of austerity, sinking its shares 17%.

In London, Trinity Mirror is a notable faller outside of the top flight. Shares in the newspaper group have fallen a hair-raising 15.5% - down 16.25p to 88.5p - on the news that ad revenues have fallen away.

12.00

RBS is still down more than 4%, and other banking shares have followed: Barclays fell 5.35p to 284.25p and Lloyds Banking Group declined 0.75p to 66.8p.

The Footsei, however, propped up by those miners, is holding its own, down just 6.2 points to 5,810.7.

In the lower flight, Restaurant Group was another faller despite reporting a return to sales growth in the third quarter and forecasting a boost for its leisure park sites due to a line-up of blockbuster films in cinemas in the run-up to Christmas.

The Garfunkel's owner remains on track to meet full-year forecasts, but shares fell 9.1p to 278.1p.

10.00

BT Group led blue-chip stocks higher this morning in London after the telecoms giant impressed analysts with solid half-year figures.

Underlying profits for the second quarter were up 13% at £496m, beating City expectations and prompting BT to raise its forecast for full-year underlying earnings to £5.8bn.

BT shares were 3% higher, up 5.2p to 164.6p.

But the Footsie gave up a positive start, despite strength from mining stocks: the FTSE 100 index was 3.6 points lower at 5,813.1.

A rise in commodity prices saw Antofagasta rack up a gain of 61p to 1,466p, while Kazakhmys added 38p to 1,532p.

Sentiment surrounding the mining sector was also lifted by an upbeat note from BofA Merrill Lynch.

Other risers included BP, which lifted 3.6p to 449.05p after oil prices climbed to $88 a barrel.

Shares in Royal Bank of Scotland meanwhile fell nearly 5% or 1.96p to 40.2p as fears grew over its exposure to Ireland.

RBS's Irish business, Ulster Bank, made a loss of £176m in the third quarter, hit by £286m of bad loans, after a similar second quarter.

Its hit from bad Irish debt this year totals £785m, more than double a year ago.

'The market is a bit concerned Ireland may have to go to the IMF for a bailout similar to Greece a couple of months ago, but the Chinese data overnight has stabilised us a little bit,' Simon Clark, a trader at ETX Capital said.

ICAP slipped 19p to 475p after Credit Suisse cut its rating on the inter-dealer broker to 'neutral' on valuation grounds.

Outside the top flight, shares in JJB Sports slid 19% after analysts widened their forecasts for full-year losses to around £40m. This followed an update showing that promotional efforts and its Serious about Sport turnaround strategy had failed to deliver a sales revival.

While JJB shares dropped 1.8p to 7.8p, rival JD Sports Fashion added 25.5p to 779p. Elsewhere, shares in directories firm Yell fell another 8% - off 0.9p to 11.2p - after its latest disappointing trading update earlier this week.

Shares in Hill & Smith Holdings plunged 13% after the highways infrastructure group issued a profits warning. It said it will be hit by cuts to government spending on new road projects.