London shares lose early gains
London’s leading shares lost hold of early gains today as traders awaited the Bank of England’s latest interest rates announcement.
The FTSE 100 Index climbed 21 points in early trading after an overnight surge on Wall Street took the Dow Jones Industrial Average above the psychologically important 9000 barrier to 9038.98.
But as traders in London awaited Edward George’s last interest rate announcement before he retires as the Bank’s governor, the benchmark index drifted back towards its opening mark – up just 2.1 points at 4128.7 by mid-morning.
Aerospace group BAE Systems soared to the top of the Footsie risers board after a positive research note from a City analyst.
And Cable & Wireless continued its sharp turnaround after seeing a 13% fall in early trading yesterday turn into a 7% rise by the close of play.
News today of the disposal of its £235m (€329.5m) stake in the Hong Kong fixed-line phone firm PCCW lifted shares another 2p to 105.5p.
But high street chain Boots was under pressure, falling 10.5p to 612p after unveiling a 17% drop in pre-tax profits. The company also announced that it was cutting 500 jobs at its Nottingham head office.
Telecoms operators were in the doldrums with mmO2 leading the FTSE 100 fallers, losing 2.5p to 62p while BT fell 2.75p to 189.5p and Vodafone edged 0.75p lower at 131.25p.
Leading the risers in the FTSE 250 index was workplace services group PHS after posting a sharp rise in full-year profits. Shares climbed 10% or 7p to 76p.
Meanwhile supermarket group Somerfield climbed 2% or 2p to 101.5p after throwing out a 120p-per-share takeover bid from retail entrepreneurs John Lovering and Bob Mackenzie saying it undervalued the company.
The proposal would have seen rival Sainsbury’s snap up a number of Somerfield stores, knocking the larger operator’s shares 5.5p lower to 261p.
