BT gains fail to boost FTSE

A clutch of heavyweight companies were sharply higher today after posting annual results.

The gains by the likes of Smith & Nephew, GlaxoSmithKline and BT Group were still not enough to prevent the FTSE 100 Index from falling back after its recent strong run, easing 16.7 points to 6352.8 at lunchtime.

There was also some downside from a busy day for corporate activity, as Unilever and HSBC were among those to find negative territory.

Medical devices group Smith & Nephew topped the risers board after reporting a strong jump in fourth quarter profits and announcing plans for a share buy-back. The stock leapt 6%, or 34p to 612p.

S&N overtook household products giant Reckitt Benckiser, which was 4% higher after it posted full year profits ahead of expectations and announced plans to return £300 million to shareholders. Its shares were 111p higher at 2595p.

Gas exploration group BG followed with a rise of 20.5p to 716.5p after its fourth quarter results came in 7% ahead of market expectations with net earnings of £140 million.

BT was another strong riser - up 4p at 320.5p - reflecting a 13% jump in third quarter profits as the number of customers on its home phone services grew for the first time in four years.

GlaxoSmithKline added to the positive mix with a gain of 26p to 1426p, reflecting upbeat guidance for the year ahead and a 16% rise in profits.

HSBC shares were under pressure after the banking giant increased the amount of money set aside to cover US borrowers defaulting on their mortgages. It said its bad debt provisions for 2006 would be 20% ahead of City expectations, leading Panmure Gordon analysts to cut their profits forecasts for the firm by 7%. Its shares were off 19p to 912p.

One of the biggest falls of the session came from Unilever as its fourth quarter performance disappointed investors, despite a 7% rise in annual profits. Shares were down 38p at 1385p.

Imperial Tobacco slid 71p to 2160p on the news it had agreed to buy Kentucky-based Commonwealth Brands from Houchen Industries for almost £1 billion. The move marks the group's first re-entry into the US market after it kept away due to legislative concerns.

Elsewhere, housebuilder Galliford Try soared almost 9% after it confirmed it had agreed a takeover of Linden Homes. Its shares were 14.25p higher at 170.75p.