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FTSE gains 0.2 pct at end of positive week

Published 09/18/2009, 11:55 AM
Updated 09/18/2009, 12:00 PM
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* FTSE 100 logs 6th straight session of gains

* Defensive issues back in favour

* Oils, miners hit by profit-taking

By Jon Hopkins

LONDON, Sept 18 (Reuters) - Britain's leading share index logged a sixth straight session of gains on Friday, up 0.2 percent supported by early gains on Wall Street, with a switch into defensives and some profit-taking in commodity issues.

At the close, the FTSE 100 was 8.94 points firmer at 5,172.89, another 12-month closing high, having earlier reached a new 2009 peak intraday of 5,183.88.

"The day is very quiet, with volumes low and options expiries offering the only real direction and, investors just unwinding a few positions ahead of the weekend," said Arifa Sheikh-Usmani, an equity trader at Spreadex.

Defensive issues found the most support as investors turned back to equities that have lagged the broader market rally and are generally seen as "safe havens".

Pharmaceuticals, beverages, and tobacco issues were among the top performers. GlaxoSmithKline, AstraZeneca, and Shire added 0.1 to 2.0 percent.

GlaxoSmithKline is in talks to buy a 5 percent stake in Indian drug maker Dr Reddy's in a deal likely to be valued at $150 million, the Economic Times reported on Friday, citing sources privy to the development.

Drinks maker Diageo and brewer SABMiller rose 1.4 and 0.6 percent, respectively, with SABMiller supported by a UBS upgrade to "buy".

Real estate firms moved higher, with Hammerson and British Land standing out, up 2.6 and 3.3 percent respectively. The pair were underpinned by upgrades from Societe Generale, which raised Hammerson to "hold" from "sell" and British Land to "buy" from "hold".

British Land is poised to conclude the long-awaited sale of half of its Broadgate office complex to private equity firm Blackstone, the Financial Times reported on Friday.

Kingfisher was the top blue chip riser, up 4.3 percent after the DIY retailer's strong first-half results on Thursday prompted a round of price target hikes by brokers.

BANKS MIXED

Banks were mixed, with heavyweight HSBC gaining 1.8 percent and Lloyds Banking Group adding 0.9 percent, recovering from early falls.

Lloyds Banking Group said on Friday it was in talks over scaling back or cancelling its participation in a state-backed scheme to insure it against credit losses.

But Standard Chartered, Royal Bank of Scotland and Barclays were weaker, losing 0.2 to 1.2 percent.

Miners moved lower, retracing some recent gains as metal prices eased back following a good run on global recovery hopes, with Anglo American, BHP Billiton, Xstrata, and Kazakhmys losing 0.9 to 2.5 percent.

Energy stocks were also weak as crude prices slipped back towards $72 a barrel on Friday. BG Group fell 0.6 percent, while BP shed 0.2 percent and Cairn Energy shed 3.1 percent.

A broker downgrade weighed on Tullow Oil, off 5.3 percent, with Citigroup cutting its recommendation on the oil explorer to "hold" from "buy" after strong gains over the past week and oil find news on Thursday.

Figures from Britain's Office for National Statistics, which showed the public sector posted a net cash requirement of 10.379 billion pounds in August, failed to deter investors.

The figure was lower than the 12 billion pounds expected by analysts but still twice the level of the same month a year ago. Overall, the UK blue-chip index gained over 3 percent during the week fuelled by hopes that the global recession could be over after comments from U.S. central bank boss Ben Bernanke.

The FTSE 100 has gained around 21.5 percent this quarter and is on track to post its best percentage quarterly gains since the index was launched in 1984, but it is still down 4.5 percent from a year ago, just before the collapse of Lehman Brothers.

(Editing by Simon Jessop)

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