FTSE Close: Pearson & Mitie up; Banks fall back

 

17.10 (close)

Dealers monitor their screens on the trading floor of IG Index in London

On the up: Shares have bounced today.

A rally for European shares and the euro proved short-lived today following fresh uncertainty over Ireland's planned rescue package.

The FTSE 100 Index opened more than 30 points higher in the wake of news yesterday that Ireland will accept an EU bail out, but stocks soon slipped - down 52 points at 5680.8 - as attention began to focus on details of the rescue.

There was a similar decline on the Cac 40 in France, as well as early session losses on Wall Street's Dow Jones Industrial Average.

Worries over Ireland continued as few specific details of the bail out emerged and as the Irish government was thrown into disarray after the Greens - a junior partner in the ruling coalition - called for a general election.

There was also anxiety that the debt troubles would soon erupt in other embattled eurozone countries, such as Portugal and Spain.

The euro surrendered a positive start and slid back below the 1.37 barrier against the dollar while the single currency was also lower against the pound.

Blue-chip banks quickly lost early session gains as investors returned to concerns about their exposure to Ireland.

Part-nationalised Royal Bank of Scotland, which is seen as being the most vulnerable in terms of Irish lending through its Ulster Bank subsidiary, fell nearly 5%, down 1.9p to 39.8p.

Shares in fellow taxpayer backed Lloyds Banking Group dropped 2.8p to 63.9p and Barclays eased 4.2p to 270p.

The latest bout of uncertainty forced investors to shelter in defensive stocks such as National Grid, which lifted 2.5p to 581p, while Severn Trent was 20p higher at 1549p ahead of half-year results on Tuesday.

Financial Times publisher Pearson advanced as the market reacted well to news of its deal to buy a 75% stake in CTI Education, a South Africa based higher education company, for £31m.

Analysts at UBS estimated the acquisition could add to Pearson's earnings in 2011 and shares in the group lifted 8.5p to 939p.

In the FTSE 250 Index, outsourcing firm MITIE made progress after it announced a 12% rise in half-year profits and said it was hopeful of snapping up contracts as public sector clients look to cut costs.

Shares jumped 4% at one stage before closing 2.1p higher at 203.1p.

It was joined on the way up by housebuilder Taylor Wimpey, which rose 0.8p to 25.3p after announcing further progress in its refinancing.

Defence technology firm Qinetiq was another second tier riser, up 1.4p to 113.7p, thanks to its success in securing a contract with NASA to provide engineering work at its Kennedy Space Station.

The win is worth a potential $2m (£1.2bn), according to Qinetiq.

The biggest FTSE 100 risers were TUI Travel up 7.2p at 208p, Compass ahead 10p at 539p, Kingfisher up 4.5p at 249.2p and Severn Trent ahead 20p at 1459p.

The biggest fallers were Royal Bank of Scotland down 1.9p at 39.8p, Lloyds Banking Group off 2.8p at 63.9p, Standard Life down 6.9p at 216p and Legal & General off 2.75p at 94.8p.

14.50 Worries about the debt crisis are also dampening the mood in the US, where the Dow Jones is trading 27.88 points down at 11,175.67.

The FTSE 100 is still hovering around 49.29 points lower at 5,683.48.

14.20:

It's turning into a poor day for the Footsie. The blue-chip index is now 49.49 points lower at 5683.34.

Uncertainty over the Irish bailout seems to be the harmful factor for shares today.

Here's a colourful explanation of today's action from market sage David Buik, of BGC Partners: 'This piece-meal, drip-drip syndrome offered by Ireland, the EU and is the worst possible tonic to offer a market. No one knows where they stand.

'Has the market metaphorically taking a laxative or a sedative! Sadly it is not written on the bottle. So if you are not sure; sell it!'

13.15:

The FTSE 100 has given back earlier gains and is trading 34.33 points lower at 5,698.50 as investors start to pick over the details of Ireland's rescue package.

Attention has now turned to other debt-burdened eurozone countries like Portugal and Spain.

The banks that were buoyant earlier also saw their stocks slump despite the removal of concerns about their exposure to the Irish crisis.

Part-nationalised Royal Bank of Scotland, seen as the most vulnerable in terms of Irish lending through its Ulster Bank subsidiary, fell 3% down 1.3p to 40.5p.

Shares in bailed out Lloyds Banking Group dropped 1.3p to 65.5p and Barclays eased 2.8p to 271.4p.

Miners continued to offer some cheer with Vedanta Resources up 39p at 2247p and Kazakhmys up 3p at 1,453p. But Xstrata fell back to trade down 2.5p at 1,316.50p.

Financial Times publisher Pearson gained as the market welcomed news it was buying a 75% stake in CTI Education, a South Africa based higher education company, for £31m. Shares in the group lifted 12p to 942.5p.

Tesco reversed an earlier rise sparked by increased sales in Asia. It is now down 3.05p at 423.6p. But outsourcing firm Mitie was still up 4.7p at 205.70p on the back of strong half-year results and anticipation that it will pick up more public sector contracts as the government tries to cut costs.

Also staying on the risers board was housebuilder Taylor Wimpey, which went up 1p to 25.5p after announcing further progress in its refinancing.

Futures trading suggested the Dow Jones Industrial Average on Wall Street would tick modestly higher, with investor focus on the latest quarterly update from US technology giant Hewlett Packard.

While the bounceback was only brief on the FTSE 100, Ireland's bail-out gave commodity prices a boost, with oil prices rising to around $83 a barrel.

11.00:

On a quiet day for corporate news outsourcing firm Mitie has unveiled strong profits.

The FTSE 250 company unveiled a 12% rise in first-half underlying profits to £47.5m. Revenues were up 15% at £918.7m.

And a boast that spending cuts will actually lead to more government contracts helped the shares rise this morning - up 7.7p, or 4%, to 208.7p. Read more on Mitie here.

The FTSE 100 is 24.83 points better off at 5757.66.

10.00:

The FTSE 100 climbed higher today as banks took heart from the Ireland bailout and commodity-related stocks rode higher oil and metal prices.

The Footsie made gains in early trading and by 9.50am was 22.4 points higher at 5755.2.

Ireland's rescue package gave a boost to shares and commodity amid hopes for a return to stability in Europe's financial system.

The boost to confidence meant oil prices rose to around $83 a barrel while in currencies the euro improved slightly against the dollar. The pound was at $1.6035 compared to $1.5963 at the previous close. Against the euro, the pound was worth €1.1674 compared to €1.1693 at the previous close.

With the UK's banking sector facing a significant exposure to the Irish crisis, shares in Lloyds Banking Group rose 0.2p to 66.9p and Barclays lifted 2.9p to 277.1p. Royal Bank of Scotland, which is seen as being the most vulnerable in terms of Irish lending, was flat at 41.8p.

Miners provided the biggest gains of the session, with Vedanta Resources up 42p to 2250p, Kazakhmys 26p higher at 1476p and Xstrata 19.5p stronger at 1338.5p.

The biggest rise in the FTSE 250 Index came from outsourcing firm Mitie after it announced a 12% rise in half-year profits and said it was hopeful of snapping up contracts as public sector clients look to cut costs. Shares jumped 4% or 7.9p to 208.9p.

It was joined on the risers board by housebuilder Taylor Wimpey, which rose 0.8p to 25.3p after announcing further progress in its refinancing.

In New York later, the Dow Jones is expected to open higher.

Reader service: Free brochure guides

Completely free insider guides on the latest investing trends...

sterling stacked on a financial chart