FTSE falls back late in day

The London market surrendered its early gains today as losses at United Utilities took the shine off an impressive display at BT.

The London market surrendered its early gains today as losses at United Utilities took the shine off an impressive display at BT.

The FTSE 100 Index closed in on a fresh six-year high in early trading before falling back to close the day down 5.3 points at 6198.6.

The fall came as a lack of news in London left traders with little to go on, despite gains in New York overnight and again this afternoon.

BT shares were the talk of the City after it traded at its highest level for more than five years.

Shares in the telecoms company were up nearly 4% or 11.25p to 316.5p as investors found renewed confidence in its prospects after a wobble over the scale of the company’s pension-scheme deficit earlier this week.

Barclays was also up, ahead 3.5p to 721p, after broker Bear Stearns increased its price target for the stock and the company strengthened its position in Africa with the acquisition of Nile Bank in Uganda.

The group was one of a clutch of banking stocks higher, including Halifax Bank of Scotland with a gain of 8p to 1119p. Lloyds TSB was 2.5p higher at 560p.

Vodafone joined the risers board, up 1.25p to 146p, as the recent recovery in its share price continued.

It was a bad day for United Utilities, which faced a possible fine from Ofwat after its water company gave preferential trading terms to other arms of the business. Shares were down 17.5p to 778.5p.

Retailers experienced a mixed session, even though the CBI reported the strongest sales growth for two years in the first two weeks of December.

With music and bookshop owner HMV confusing the picture with a poor trading update, shares in most retailers were still in negative territory.

Next was down 26p at 1789p, while Marks & Spencer gave back recent strength to fall 9.5p to 702p.

Primark owner Associated British Foods dipped 8.5p to 826.5p but Argos firm Home Retail Group bucked the downward trend with a rise of 1.25p to 408.75p.

In the FTSE 250 Index, HMV slipped almost 5% or 7.25p to 146.5p after reporting a 1.3% dip in like-for-like sales in the run up to Christmas. It also warned that profits were likely to be towards the lower end of expectations.

Meanwhile, housebuilder George Wimpey admitted concern over poor trading conditions in the United States, despite a strong performance in the UK. Shares were down 14p at 556.5p.

British Energy shares fell 6%, or 35.5p, to 538.25p, after it said repairs at Hunterston and Hinkley Point would take longer to complete.

The day’s biggest blue-chip risers were BT up 11.25p to 316.5p, Shire 24p higher at 1080p, Rolls-Royce up 8.75p to 446p and SABMiller 19p better off at 1153p.

The heaviest fallers were Antofagasta down 11.5p to 508p, United Utilities off 17.5p to 778.5p, Centrica 6.75p lower at 345.5p and Lonmin down 49p to 2988p.

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