Shaky morning for FTSE
Sentiment in London remained fragile today with HBOS shares taking a beating because it failed to top expectations for annual profits like many of its rivals.
The owner of Halifax and Bank of Scotland faded 6% after its house broker also downgraded the stock, restraining the recovery by the FTSE 100 Index following its fall of 84 points last night.
But some much-needed life in Vodafone shares and hopes that a potential bidder would make a fresh approach for gases firm BOC meant the Footsie was able to claw back 29.9 points by mid-morning to stand at 5821.4.
The recent fall by Vodafone showed signs of bottoming out following a rise of 2.5p to 111.5p, while Royal Dutch Shell added 25p to 1820p and BP cheered 9.5p to 639.5p in the oil sector after a bad run recently.
Shares in BOC advanced 3% or 43p to 1553p on talk that German industrial giant Linde was preparing to make a new approach for the firm, possibly as soon as tomorrow.
The fallers board was dominated by HBOS after its shares fell 58.5p to 1003.5p as investors gave a lukewarm reception to a 13% increase in underlying profits to £4.84bn (€7.1bn).
It pulled down Barclays by 14.5p to 654p, but investors were more positive about Royal Bank of Scotland after the owner of NatWest hiked its annual dividend by 25% yesterday and promised to buy back up to £1bn (€1.5bn) of its own stock this year.
With analysts trumpeting the view that RBS was rated too cheaply compared to others in the sector, shares in the UK’s second-largest bank lifted 26p to 1935p.
Elsewhere, Silk Cut maker Gallaher recovered early losses to stand 4p higher at 888p even though it warned of difficult market conditions in Europe during 2006.
And second-tier retailer Matalan offered a much-needed boost to investors as it showed signs of an improving trend for sales. Shares rose 4% or 7p to 190.25p.
