FTSE close: HSBC, Man Group down; IPR up

By Adrian Lowery
Updated: 12:04 EDT, 24 November 2009

The Footsie paused today after its biggest rise in six weeks yesterday with gains for Lloyds as its rights issue pricing was well-received.

The FTSE 100 index closed 31.5 points lower at 5,323.9 after yesterday's 2% gain. Asian markets fell overnight as the Chinese central bank attempted to rein in a lending spree by the country's banks, and the Footsie fell on the open as a result.

'The London market has lacked any real conviction, although it has had a slight downward bias,' said Michael Hewson, analyst at CMC Markets. 'Bank of England governor Mervyn King's comments to the House of Commons Treasury select committee on the state of the UK economy having more of an effect on sterling than on share prices.

'With sterling dipping after King's comments, package holiday firms Thomas Cook and TUI Travel feature among the FTSE 100 worst performers.'

The Dow Jones was 45.5 points lower by the London close, to 10405.5, as US third-quarter GDP was revised downwards to 2.8% from the previous 3.5%. This was slightly less than the 2.9% forecast, while consumer spending was also revised down by more than expected to a 2.9% rise from 3.4%.

All eyes will now focus on the UK's GDP revision tomorrow, with an expectation of a change to -0.3% from -0.4%.

Banks were among the biggest fallers in London: HSBC lost 14.4p to 737p and Standard Chartered was 40.5p down at 1,637p.

But Lloyds Banking Group gained ground today after it revealed the pricing details of its record £13.5bn cash call on shareholders. The rights issue will represent a discount of nearly 40% on the 'ex-rights price' and that lifted shares 2.34p to 93.81p.

Royal Bank of Scotland - which according to figures released today borrowed almost £62bn from the Bank of England at the height of last year's financial crisis - lost 1.5p to 36.31p.

Hedge fund firm Man Group was off 4.6p to 347.5p or 1.31% after brokers at Credit Suisse cut their rating on the stock.

On the fallers board, Cadbury joined banks in negative territory as the Dairy Milk maker and takeover target gave back some of yesterday's gains seen on hopes of a bidding battle. Shares dropped 6p to 808p.

Fashion label Burberry had been the victim of a broker downgrade from Morgan Stanley early on, falling 6p to 571p.

But gains amid heavily-weighted miners helped the Footsie, with Anglo American leading the way as it added 22p to 2617p.

Positive comments from Nomura on the general retailing sector meanwhile helped Marks & Spencer make firm progress, up 7.2p to 388.9p. Argos and Homebase owner Home Retail Group - another stock fancied by Nomura - was 1.9p dearer at 306.8p.

Severn Trent meanwhile took the latest turn in a busy week for results for the water sector, adding 7p to 1004p after better than expected pre-tax profits. The blue-chip firm said it had kept bad debts under control despite recession, although much will depend on regulator Ofwat's price settlement for the industry due on Thursday.

Another utility, power generation company International Power, was a big gainer, up 3.6p to 275.6p as Evolution Securities repeated its 'buy' rating citing moves in Australia to improve coal plant compensation.

In the second tier, Durex-to-Scholl footcare firm SSL International added 48p to 720p - more than 7% - after strong pre-tax profits in the six months to September as sales of branded goods weathered the recession.

Elsewhere the UK's largest flooring and tiling firm Topps Tiles shed 1.5p to 93p after a 45% fall in annual profits and continued caution over the consumer climate. The firm raised £15.4m to strengthen its balance sheet.