Footsie loses early gains

The London market ended the week close to its opening mark after updates from two blue-chips disappointed investors.

After climbing as much as 30 points in early trading, the Footsie backpedalled to stand just 5.6 points ahead at 4694 by the close.

Energy group Centrica ended the day at the top of the Footsie fallers after investors baulked at concerns about the impact of rising electricity and wholesale gas prices on margins at British Gas.

An update from banking giant HSBC also failed to impress after it reported weaker consumer borrowing and an uncertain outlook for 2005.

The Footsie’s dour performance surprised analysts who had expected it to rebound above the 4700 barrier on the back of a positive performance on Wall Street overnight.

The Dow Jones Industrial Average was hovering about nine points below its opening mark shortly after London’s close.

Better than expected US consumer sentiment figures fuelled fears that the Federal Reserve will hike interest rates next week.

Centrica was the heaviest Footsie faller with a loss of 20.75p to 229.25p, even though it assured investors that it expected to meet market forecasts for both this year and 2005.

Shares in banking giant HSBC eased 0.5p to 872.5p as its comments on borrowing and prospects overshadowed a “satisfactory” third-quarter performance.

Oil giants BP and Shell were 4p and 1.25p higher at 512.5p and 434.75p respectively ahead of a key meeting of Opec in Cairo today, which is expected to confirm a cut in production.

Investors in BT pushed the stock up 1.25p to 200p after the telecoms group said its finance director Ian Livingston would replace Pierre Danon as the chief executive of its retail arm.

Oil group Cairn Energy raced to the top of the Footsie risers in late trading, up 41p to 1441p, after the company promised an update next Friday on its drilling activities in Rajasthan, India, where it has recently made major oil finds.

Meanwhile, FTSE 250 stock HHG provided the interest in the insurance sector with news that it was selling its UK life insurance business for £1.03 billion.

HHG topped the second rank index with an 11%, or 5.5p gain to 54.75p in the wake of the deal, which included a pledge to return £875 million to shareholders.

Investors in other insurers gave a mixed reaction to the news, with larger rival Aviva 2p ahead at 607.5p, Royal & Sun Alliance down 0.25p at 75.25p and Friends Provident 1.5p adrift at 153.75p. Prudential was 1.25p down at 434.5p while Legal & General lost 0.75p to 106.5p.

Elsewhere, foam maker British Vita fell 2% or 5.5p to 261p after it warned that rising raw material prices would push profits slightly below the £50.7 million reported for 2003.

Biggest risers included Cairn Energy, up 41p to 1441p, Schroders NV ahead 16p at 651.5p, BAT rising 21p to 892p and Imperial Tobacco gaining 27p to 1382p.

Largest fallers were Centrica, down 20.75p at 229.25p, Next losing 33p to 1597p, Amvescap weakening 6p to 305p and BG Group slipping 5.5p to 344p.