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Banks pull FTSE lower after RBS, HSBC results

Published 11/05/2010, 05:38 AM
Updated 11/05/2010, 05:40 AM

* FTSE down 0.1 percent

* Banks wane after RBS and HSBC results

* Miner, energy extend gains as weak dollar powers commods

By David Brett

LONDON, Nov 5 (Reuters) - Britain's top share index was lower on Friday after closing at a near 29-month high in the previous session, with banks down after results from HSBC and Royal Bank of Scotland, outpacing rising commodities.

By 0921 GMT, the FTSE 100 was down 6.17 points or 0.1 percent at 5,856.62, having shot up 2 percent on Thursday.

That was its highest closing level in nearly 29 months, coming after the Fed committed to buy $600 billion in government bonds to support a struggling U.S. economy on Wednesday.

Banks fell as part-nationalised Royal Bank of Scotland, down 1.7 percent, said after reporting third-quarter results it expects challenging market conditions in the fourth quarter and a UK bank tax would add up to 250 million pounds to its costs next year.

Europe's biggest bank HSBC fell 1.8 percent with traders citing profit taking after it said profits in the third quarter and for the year to date were "well ahead" of a year ago.

"(HSBC's) results are good ... but then the last couple of days it has had a very good run, so I think there's money being taken off the table here, and that's pushing some of these banks back down again," a trader said.

COMMODITIES GAIN

Mining and energy shares were higher as investors bought commodities as the dollar index fell to an 11-month low after the Fed's announcement.

Indian focused mining group Vedanta climbed 1.4 percent, while oil major BP was up 0.4 percent.

Elsewhere, Smith & Nephew added 4.4 percent to top the FTSE 100 leader board after the orthopaedic products firm reports third-quarter results.

Retailers continued to toil, with Wm Morrison Supermarket down 1.8 percent and Next off 0. percent after both firms issued cautious outlook statements earlier this week.

Next was also pressured by a downgrade from JP Morgan, which cut its rating on Britain's number 2 fashion retailer to "underweight" from "overweight".

Marks & Spencer, which reports next week, fell 1.3 percent.

Rolls-Royce shed 1.8 percent after planemaker Airbus said it is asking airlines that fly its A380 superjumbos to have any Rolls-Royce engines inspected following the engine failure this week of an A380 operated by Qantas Airways.

The market's main focus will be on U.S. nonfarm payrolls, due at 1230 GMT, which are expected to have risen by 60,000 in October, after a 95,000 decline in the previous month, with the unemployment rate seen static at 9.6 percent month-on-month. (Editing by Hans Peters)

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