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Pound Seesaws as Data Firm

By Boris Schlossberg
25 August 2006 09:10 GMT

 

London stocks made progress in opening trade on Friday, aided by a recovery in the mining sector and fresh bid speculation in the banking sector. The FTSE 100 started the session 0.4 percent firmer at 5,891.3, a rise of 18 points. The FTSE 250 ticked 0.1 percent, or 7 points, higher to 9,467.2. Investors were in cautious mood ahead of a speech from US Federal Reserve chairman Ben Bernanke, due at 3pm London time. The address will be scrutinized for indications of the central bank’s latest thinking on interest rates. The banking sector moved higher on renewed rumor of potential trans-Atlantic takeover activity. After the CNBC television network named Lloyds TSB and Barclays as potential targets for Bank of America, shares in the companies rose 1.6 percent to 531½p and 1.4 percent to 653½p respectively. Hopes of a fresh bout of M and A activity fostered wider gains. Northern Rock, often seen as ripe for the taking, rose 0.8 percent to £11.09, Bradford & Bingley was 0.7 percent stronger at 443¾p and HBOS made gains of 0.6 percent to £10.06 . Corus Group, the steelmaker, was also lifted the the tide of returning bid rumor. The Anglo-Dutch group, which is due to report interim numbers next week, has been linked with several potential suitors in recent weeks, most lately Russian peer Evraz. Corus topped the blue-chip leaderboard on Friday with a 1.8 percent advance to 404½p. After a torrid week for mining companies sparked by fears of long term margin pressure and increasing wage demands within the industry, the sector moved back up over the flatline. Xstrata was 1.1 percent higher at £23.00, Rio Tinto recovered by 1.3 percent to £26.71 and BHP Billiton was 1.1 percent higher at £10.00. On the downside, Rexam fell 0.9 percent to 544.8p after investors took profits from the world’s biggest drinks can maker following a strong showing throughout the previous session after its interim results.

 

UK gilts remained essentially flat for the day with yield on the benchmark 10 year rising by 1 basis point to 4.55%.

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25 August 2006 09:10 GMT