Britain's leading share index ended flat on Monday with strength in energy issues countered a sell-off in miners, weak financial issues and uncertain progress on Wall Street. At the close, the FTSE 100 index was up 3.83 points, or 0.1 percent, at 5,538.07, having touched a 16 month intraday peak of 5,600.48 early in the session.
"After good morning gains, investors turned a touch nervous in the afternoon as Wall Street stagnated with the US earnings season getting underway this week, but strong oils kept the market steady" said Mic Mills, senior trader at ETX Capital. Energy issues were higher, despite a slip back by the crude price, supported by bullish comments from Citigroup.
The broker significantly upped its crude price forecasts, raised targets across the sector and hiked its rating for BP to "buy" from hold. BP took on 2.2 percent, BG Group gained 2.4 percent, and Royal Dutch Shell added 0.9 percent. Oil explorer Cairn Energy gained 2.3 percent as Citigroup also upped its rating to "buy" from "hold" in a similar review of the UK E&P sector. Tullow Oil was up 0.8 percent, with Citigroup hiking its target price.
Real estate issues were good gainers helped by a positive note from Goldman Sachs, which hiked sector targets. Land Securities was the top FTSE 100 riser, up 2.9 percent after being added to Goldman's "Conviction Buy" list. Peer Segro added 2.0 percent after being upped to "neutral" by Goldman. Segro also said on Monday that trading was in line with expectations.
High street issues saw good demand after recent trading updates, with more due later this week. Britain's biggest retailer Tesco added 0.5 percent ahead of its release of Christmas trading figures, due on Tuesday. Peer Wm Morrison Supermarkets added 1.9 percent helped by a Nomura upgrade to "buy", with the broker also upping its European sector stance to "bullish" from "bearish.
However, J Sainsbury, which last week beat forecasts with a 4.2 percent rise in like-for-like sales, fell 0.5 percent. Miners retreated after having posted earlier gains as Wall Street's cautious progress unsettled investors, although metals prices held firm on the back of solid Chinese trade numbers. China's exports and imports last month beat expectations, with exports leaping 17.7 percent from a year earlier, dwarfing the 4 percent rise forecast by economists and breaking a 13-month streak of year-on-year declines.
Eurasian Natural Resources, a strong recent gainer on the back of broker comments was the biggest FTSE 100 faller, down 2.3 percent, while Vedanta Resources, Anglo American, Xstrata, Rio Tinto, and BHP Biliton shed 0.4 to 1.8 percent. Aluminium firm Alcoa will kick off the US fourth-quarter results season after Wall Street closes on Tuesday, and ahead of the earnings deluge over the next few weeks, US blue chips were fairly flat by London's close, up 0.1 percent.
Banking issues were weaker, awaiting earnings news from their US peers, starting with J.P. Morgan on Friday. Standard Chartered, HSBC, Barclays, and Lloyds Banking Group were down between 1.1 and 2.1 percent. Royal Bank of Scotland slipped 0.4 percent. Weekend reports suggested the part-nationalised lender had started the sale of more than 300 of its branches.
Other financials suffered. Life insurers were lower, with Legal & General, Standard Life, Aviva, RSA Insurance, and Prudential losing 1.3 to 2.1 percent. ICAP shed 1.3 percent as HSBC placed 10.3 million shares in the interdealer broker at 440 pence each. Among individual fallers, SABMiller fell 2.0 percent after it dropped out of an auction to buy the beer business of Mexico's Femsa, leaving Dutch peer Heineken to snap it up.
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