FTSE close: C&W up; Thomas Cook, TUI down

By THIS IS MONEY
Updated: 12:02 EDT, 20 November 2009

London's blue-chip share index looked set to end the week on a subdued note today as early gains were let go.

The FTSE 100 index lost 1% on Thursday as mining stocks fell and economic jitters hit market sentiment, and today it closed 16.3 points down to stand at 5,251.4.

There was also retreat on Wall Street, with the Dow Jones 37.5 points down at the London close, and in Asian markets as evidence of a weak economic recovery continued to pile up.

A further strengthening of the dollar was putting pressure on US stocks, driving down foreign demand for commodities, which are often traded in dollars.

However, The FTSE 100 is up 60% since hitting six-year lows in March but is still 2.2% below its level prior to collapse of Lehman Brothers bank in September 2008. And some analysts are still optimistic.

'Yesterday we saw profit taking in sectors that have led the recovery but reasonably upbeat leading indicators from the US have calmed the nerves and yet again we have buyers on the dip,' said Jim Wood-Smith, head of research at Williams de Broe.

'The Footsie is likely to hit 5,500 fairly shortly and once it gets past that level there's every chance it is going to get to 6,000. If the western markets are going to falter the trigger will be from the east (China tightening fiscal policy).'

Tour operators Thomas Cook and Thomson owner TUI Travel led the falls. A downgrade from Morgan Stanley dealt a blow to the travel groups as the broker raised concerns about weak demand, cost pressures and rising debts at the pair.

Thomas Cook was down 9.3p at 209.2p and TUI Travel was down 10.2p at 245p.

A gloomy assessment of prospects from the UK's biggest building society, Nationwide, also did little to help bank shares today. Nationwide predicted record low interest rates until at least the final quarter of next year and downward pressure on house prices.

Among the listed banks, Barclays lost 4.15p to 304.25p, Royal Bank of Scotland was down 0.01p at 36p and Lloyds Banking Group was off 1.79p at 88.15p.

Housebuilder Barratt Developments in the FTSE 250 was also suffering amid the property price caution, down 6.9p at 125.7p, or 5.2%.

Also in the second tier, embattled transport firm National Express rose 7.6%, or 25.9p to 366.9p, after its largest shareholder - Spain's Cosmen family -upped its stake with another 500,000 shares.

Buy-to-let lender Paragon was another top FTSE 250 riser thanks to positive broker comment. The stock moved 3.59% or 5.1p higher to 147.1p after UBS upgraded the stock to buy.

Back in the top flight, Cable & Wireless gained 2.5p to 138.1p after JP Morgan said the company's demerger plans would keep management motivated to deliver.

Commodity stocks and miners gave back earlier gains, although silver miner Fresnillo held firm in positive territory with a 4p increase to 875.5p.

BG Group lost 0.49% as UBS upped its target price to 1,120p from 1,060p.

SABMiller extended Thursday's gains, rising 16p to 1,730p, as a raft of brokers upgraded their target price for the world's second-biggest brewer, after yesterday's healthy first-half results.

Shares in Fuller, Smith and Turner rose 4.29% or 21p to 510p after the pubs operator reported a 26% rise in first-half profit and says it has 'defied' the recession.

Sterling fell to a one-week low against the dollar on concerns over the UK's fiscal health and waning investor appetite for currencies perceived as risky. Yeterday's dire figures on UK public finances haven't helped. The pound was down 0.4% at a one-week low against the dollar of $1.6589. Against the euro, it was down slightly at €1.1116.