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Financial Week: THE WEEK'S REVIEW.

Monday A lacklustre session ended on the back foot as the FTSE 100 Index failed to break past the 4200 mark.

Blue-chip shares initially pushed ahead but started to ease as the session wore on.

Heavyweight financial stocks were weighing on the market and with little corporate news to inspire trading, the FTSE 100 closed 53.0 points lower at 4122.2.

A lacklustre start in the US added to the subdued mood - by London's end, the Dow Jones Industrial Average and tech-laden Nasdaq were up only a few points.

Most were expecting a quiet week on Wall Street ahead of the Thanksgiving break on Thursday, with Friday traditionally the lightest volume day of the year.

In the City, insurer Royal & Sun Alliance and financial service group Old Mutual were two of the heaviest fallers.

R&SA topped the FTSE 100 fallers' board with a 6% drop after Schroder Salomon Smith Barney cut its price target to 100p. Shares fell 8.75p to 132.25p.

Close behind it was Old Mutual, however, which shed 4.75p at 90p.

It said second-half earnings were so far satisfactory but weak equity markets meant they were down on the first six months.

Among the banks, Lloyds TSB lost 22p at 544p, Barclays shed 12.75p at 455p and Abbey National drifted 21p to 647p.

Reports over the weekend had reiterated growing speculation in the market that Abbey is gearing up to cut dividend payments.

Tuesday A gloomy start on Wall Street depressed trading in London, pulling the FTSE 100 Index further towards the 4000 barrier.

By London's close, the Dow Jones Industrial Average was off more than 100 points after consumer confidence data missed forecasts.

The tech-laden Nasdaq also fell, damaging already weak trading in the City and the FTSE 100 finished 51.2 points adrift at 4071.0.

One of the UK's biggest fallers was mobile phone giant Vodafone as its recent strong run came to a grinding halt.

Shares fell 5p to 118p as investment bank Deutsche cut its rating on the stock to hold and investors took profits.

Rival mmO2 was also down heavily, off 5.5p at 48p, BT lost 4p at 203.75p and Cable & Wireless - which announced that its chairman designate was quitting after pressure from shareholders - lost 3.75p at 77.75p.

The telecoms group recently stunned the City with costly plans to overhaul its troubled Global division. Among the banks, HBOS shed 29p at 688.5p, Lloyds TSB fell 8.5p at 535.5p and Abbey National, which was due to update the City on trading the next day, lost 8p at 639p.

Speculation mounted that Abbey was gearing up to cut dividend payments, and investors were hoping for an update on Wednesday.

Wednesday London shares finally kicked into life as better-than-expected economic data in the United States rubbed off on investors.

The City had been in subdued mood until the afternoon's data provided traders with the inspiration they had lacked earlier in the week.

Buoyed by improved purchasing managers' figures, the Dow Jones Industrial Average added 200 points by the time of London's close and in turn helped the Footsie finish 73.2 points ahead at 4144.2.

Analysts said the developments across the Atlantic had provided more of an impetus than Chancellor Gordon Brown's pre-Budget report, which was viewed as being in line with expectations.

However, oil stocks built on earlier gains after Mr Brown announced the abolition of royalty taxes on compa-nies operating in the North Sea. The news helped BP close 4%, or 17p, ahead at 417p, while Shell ended 12.5p stronger at 413.5p.

Elsewhere in the Footsie, troubled mortgage bank Abbey National managed to achieve a rise of 4% despite warning investors to expect the company's first loss as a public company and a lower full-year dividend.

Shares initially dipped but fears of a bigger sell-off proved unfounded as the City digested new boss Luqman Arnold's plans to refocus the group entirely on personal financial services.

That ensured Abbey found positive territory, up 28.5p at 667.5p, on a good day for banking stocks as other risers included Barclays, up 6.25p at 455p and HSBC, 13.5p stronger at 746p.

Thursday The FTSE 100 Index closed in positive territory - but failed to break through the key 4200 level.

As the session got under way, the top flight nudged past 4200 as a hefty surge on Wall Street the night before fuelled trading.

But with US markets closed for Thanksgiving, the FTSE 100 came off its highs to close up 41.2 points at 4185.4.

The FTSE 100 has been stuck between the 4000-4200 trading range since the start of November, with any gains frittered away by profit taking.

Financial stocks were among the risers with Barclays up 9.25p to 464.25p, HSBC rising 14.5p to 760.5p and HBOS climbing 17p to 696.5p.

Abbey National bucked the trend, however, losing 25p to 642.5p.

Elsewhere in the sector, insurer Royal & Sun Alliance rose after selling a stake in the world's biggest aviation insurer to up the focus on its core business.

It reduced its holding in Global Aerospace Underwriting Managers from 50% to 10.1% and shares gained 9.75p to 144.5p.

But the session's biggest winner was engineering group Invensys after it completed its programme of non-core asset disposals. Shares rose 5p to 63.75p, a near 9% climb.Friday Mining groups dug the FTSE 100 Index out of a hole yesterday as London's blue-chips ran out of steam in a largely subdued end to the week.

Investors snapped up the likes of Xstrata, BHP Billiton and Anglo American as speculative buys given recent signs of a recovering US economy.

The gains helped compensate for weaker telecoms stocks and picked the Footsie off the floor after it lost 55 points in morning trading.

But there was little else to encourage cash into the City with US markets shut for half-a-day after Thursday's Thanksgiving celebrations.

And with leisure stocks suffering a hangover caused by a profits warning from JD Wetherspoon, the Footsie still closed down 16 points at 4169.4.

The index briefly broke through the 4200 barrier in the first hour before falling back and yesterday's drop means it lost 5.8 points over the week.

Peter Cogliatti, trader at Williams de Broe, said investors had moved to the sidelines today due to a lack of 'fizz' in the market.

Of the risers, Xstrata surged 6%, or 36.5p to 628.5p, while BHP Billiton rose 14.75p to 341p and Anglo American climbed 30.5p to 905p.

But on the downside mobile phone giant Vodafone lost 2.75p to 122p as profit takers cashed in on its 30% jump over the last two months.

Elsewhere in the telecoms sector, rival mmO2 eased 0.25p to 51p, BT Group drifted 4p to 210p and Cable & Wireless fell 1.5p to 82p.

And drug stocks also continued to suffer with GlaxoSmithKline ending the day 16p lower at 1203p and Shire Pharmaceuticals off 16p at 442p.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Nov 30, 2002
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