FTSE close: LSE glitch, Lloyds down

By This Is Money
Updated: 12:27 EDT, 25 February 2011

17.05 (close)

World markets staged a bounce back today as oil prices steadied and offset disappointing economic data in the UK and US.

London's FTSE 100 Index rose 81.2 points to 6001.2 - a gain of 1.4% - as it fought back from recent hefty falls seen amid the ongoing political crisis in Libya.

Wall Street's Dow Jones Industrial Average was also ahead, despite a downgrading of US GDP growth for the final quarter of 2010 to an annualised rate of 2.8%, from an initial estimate of 3.2%.

In London, investors were similarly undisturbed by revised UK GDP figures, which showed the fourth quarter decline was worse than feared at 0.6%, compared with the 0.5% first estimate.

The figures did hit the pound, however, which dropped to a one-month low against the dollar at 1.60.

Trading in the UK was thrown off course earlier in the session when a major technical glitch halted trading on the London Stock Exchange for more than four hours.

But easing oil prices cheered investors and the market pressed ahead after re-opening just after 12pm.

Speculation that the crisis in Libya may have cut oil supplies by less than previously estimated meant the price of Brent crude settled at around 111 US dollars, having spiked at nearly 120 dollars on Thursday.

Saudi Arabia, Opec's biggest producer, also indicated that it was prepared to increase supplies in the face of the Libya turmoil.

The International Energy Agency added it could make up for any lost shipments from Libya by tapping into large surpluses held by member countries, which include the US, the UK, France and Germany.

In corporate news, Lloyds, which is 41% owned by the taxpayer, reported pre-tax profits of £2.2 bn - a marked improvement on the £6.3bn loss in 2009.

But analysts were spooked by comments that the slower UK economy and higher funding costs will prevent growth in margins this year.

The bank's bad debt losses narrowed in 2010 to £13bn, from £23bn the previous year, but it saw an increase in international impairment charges driven by the impact of the Irish debt crisis.

Shares were 4% lower, a drop of 2.9p to 62.9p.

One of the biggest rises in the FTSE 100 came from BSkyB after the Financial Times said News Corp was close to an agreement with regulators about addressing competition concerns on its bid for the part of Sky it does not already own.

BSkyB shares were 4% or 31p higher at 786.5p.

Outside the top-tier, Rightmove shares jumped 5% - up 41p to 898p - after its profits surged 43% and it said it had started 2011 with record levels of activity.

The biggest Footsie risers were Arm Holdings ahead 34.5p to 608p, Weir Group ahead 84p to 1692p, Lonmin up 79p at 1829p and Burberry up 47p to 1187p.

The biggest Footsie fallers were Lloyds Banking Group down 2.9p to 62.9p, Reckitt Benckiser off 29p to 3163p, International Consolidated Airlines down 1.6p to 224.6p and Petrofac off 4p to 1378p.

15.05: The Dow Jones has made opening gains as oil prices subsided from recent highs.

The US index was up 33.5 points at 12,102 soon after the opening bell, despite slower than expected GDP growth.

An official revised estimate showed the US expanded by 2.8% in the fourth quarter - down from an initial estimate of 3.2% and undershooting forecasts of 3.3%.

Back in London, the FTSE 100 is up 58.7 at 5,978.7 after getting off to a very belated start due to a technical glitch.

BSkyB is 25.5p higher at 781p following a Financial Times report that News Corp is close to agreement with regulators over its bid for the part of Sky it does not already own.

Shares in International Consolidated Airlines Group (IAG), which operates the merged British Airways and Iberia, have moved up 2.6p to 228.8p on news the combined company made a profit in the final quarter of 2010 despite contending with snow and strikes. We have more here.

Lloyds' stock is still ailing following the release of the bank's results earlier, down 2.57p at 63.03p. Elsewhere in the banking sector, Barclays is up 1p at 313.6p while RBS has dropped 0.14p to 45.46p.

Shares in prpperty internet portal Rightmove jumped 5% - up 40p at 897p - after its profits surged 43% and it said 2011 began with record levels of activity.

13.00:

The FTSE 100 has resumed trading and is up 55.1 points at 5,975.1.

The LSE said it regretted the inconvenience caused by the incident.

Lloyds Banking Group, which reported its first profit since the credit crisis today, was down 2.53p at 63.25p.

Wall Street markets, which have fallen for three sessions in a row, are expected to open higher today after signs of recovery on Thursday afternoon.

The International Energy Agency said that it could make up for lost oil shipments from Libya by tapping into large surpluses held by member countries, which include the US, the UK, France and Germany.

This follows indications from Saudi Arabia that it is prepared to increase supplies in the face of the Libya turmoil.

11.15:

The glitch in today's trading is an embarrassing blow for the LSE, which only launched its new system last week.

After suspending dealings before the opening bell, the LSE blamed issues with the market data technology and said it was investigating the problem.

Joshua Raymond, market strategist at City Index, commented: 'It's yet another glitch to trading and traders who still remember the same issues that halted trading for some three hours in 2009… will undoubtedly be venting fury this morning at the LSE.

'At a time of uncertainty in the markets, where traders are having to keep on their toes with the situation in Libya, the last thing they need is an unexpected halt to trading.'

David Buik of BGC Partners said: 'London seems to have, to use a “Kray expression”, a bit of previous in terms of its technological systems breaking down.

'I am reliably informed installing a duplicate operation is economically or technically implausible. I will take that comment on face value. This is very frustrating as London vies to remain the financial capital of the world.'

11:00:

Trading was suspended on the London Stock Exchange this morning after a technical glitch, preventing accurate data about the position of the FTSE 100.

Oil prices have settled after Saudi Arabia tried to calm concerns about supplies.

The price of Brent crude fell back to $111 last night and settled at $112 US today.

They had soared to nearly $120 yesterday, but Saudi Arabia – Opec's biggest producer – signalled that it was prepared to increase supplies as the turmoil in Libya continues.

Meanwhile there was fresh economic gloom after official figures showed the decline at the end of last year was worse than originally feared.

Gross domestic product shrank by 0.6% in the last quarter of 2010, according to the latest figures from the Office for National Statistics - an even sharper reversal than the inital estimate of 0.5%.

The contraction in the October-to-December period is the largest GDP fall in more than two years - since the depths of the recession in the second quarter of 2009. Read more on that here.

In corporate news, Lloyds Banking Group is back in the black with its first annual profit since being bailed out by British taxpayers during the credit crisis.

The 41% state-owned bank delivered a £2.2bn pre-tax profit last year – a massive turnaround from its £6.3bn loss in 2009. Read more here.

UK stocks to watch today:

Interserve: is in advanced talks with Mouchel over a tie-up that would create one of Britain's biggest public sector outsourcing companies, the Financial Times said.

Diageo: The world's largest spirits company is pouring more money into emerging markets, and expects those faster-growing regions to make up half of its sales in five years, its chief executive said, citing acquisitions and a burgeoning middle class.

BSkyB: News Corp is close to an agreement with British regulators over a remedy for concerns about its $21.3 billion bid for broadcaster BSkyB, the Financial Times said.

National Express: chief exec Dean Finch has rejected the prospect of a corporate break-up after it emerged that an activist New York hedge fund has built up a significant stake in the group, the Guardian said.

Lloyds Banking Group: The bank reports full-year results.

Aminex: The oil and gas explorer holds an extraordinary general meeting.

Brit Insurance: The insurer reports full-year results.

Berendsen: The support services company reports full-year results.

Brewin Dolphin: The financial services group holds its annual general meeting.

Colt Group; The corporate telecoms specialist reports full-year results.

Rightmove: The property site reports full-year results.

Rank group: The gaming firm reports full-year results.

Spectris: The engineer reports full-year results.

William Hill: The bookmaker reports full-year results.