London close: Shares shake off US blues

LONDON (ShareCast) - The Footsie finished a see-saw day in positive territory, shrugging off concerns about the worse than expected US jobless figures, which revealed the US unemployment rate has risen above the 10% level.

Banks enjoyed a day in the sun, helped by a positive response to results from Royal Bank of Scotland (RBS) and some positive broker comment.

More huge write-offs sent RBS deep into loss over the past three months. Nine-month losses now total £2.06bn against a profit £1.8bn this time last year.

Fellow recipient of tax-payer largesse, Lloyds Banking Group received a boost from Citigroup, which changed its position on the stock from 'hold' to 'buy' in the wake of Lloyds' decision to buy its way out of the government's asset protection scheme. Citi has bounced its price target for Lloyds all the way up to 104p from 37p previously.

JPMorgan, meanwhile, has raised its target price for Barclays from 220p to 280p, though it continues to advice clients to be underweight in the stock.

British Airways gained altitude, despite reporting a record loss of £292m. The loss before tax of £244m before restructuring costs, compares with a profit of £52m last year. Revenue was down 13.7% to £4.1bn. Net losses came to £208m. The company has urged the Unite union to withdraw its plans for a strike ballot and resume talks with the carrier.

The price of oil is back below $80 a barrel, which is good news for British Airways but bad for oil producers such as BP and BG Group.

While British Airways and RBS saw their share prices react positively to the announcement of heavy losses, pest controller Rentokil Initial shares took a hammering, despite more than doubled profit at actual exchange rates during the third quarter. The company saw losses at its parcels arm City Link narrow substantially.

Property group Segro has sold Great Western Industrial Park in Southall, West London to Universities Superannuation Scheme, the second largest private pension scheme in the UK, for £110.4m.

Elsewhere in a generally buoyant property sector Great Portland Estates was wanted after JPMorgan Chase upgraded the stock from 'neutral' to 'overweight'. Also on the upturn were sector heavyweights Hammerson and Land Securities.

Interim profits slumped at Tate & Lyle, with the sugar and sweeteners group cautioning that US markets remain under pressure. Sales in the half year to September increased by 7% to £1.82bn. Adjusted operating profit reduced by 1% (16% in constant currency) to £148m, with underlying profit before tax down by 13% (25% in constant currency) to £112m.

Smith & Nephew's pre-tax profit jumped 45% in the third quarter and the knee and hip joint supplier expects a good outcome for the full year. Pre-tax profit for the three months to 26 September grew to $173m from $119m a year ago, lifting it to $495m for the nine months from $402m in 2008.

Mobile phone network giant Vodafone and supermarket group Sainsbury were both nervously lower ahead of results next week.

A pick up in corporate businesses in the UK helped stockbroker Collins Stewart swing back into profit over the last four months. Total revenues in the period to end October rose by 4% to £57m with overall revenues for businesses based outside the US significantly ahead of the same period in 2008.

United Business Media reports trading is mixed across its range of businesses, but overall the aggregate adds to a stable performance across the group.

Dechra Pharmaceuticals, which focuses on the veterinary sector, has started the financial year in line with expectations with revenue in the first quarter 5.1% ahead of last year.

FTSE 100 - Risers British Airways (BAY) 198.80p +6.71% Royal Bank of Scotland Group (RBS) 37.06p +5.25% Burberry Group (BRBY) 581.50p +2.56% Home Retail Group (HOME) 309.20p +2.49% Standard Chartered (STAN) 1,607.00p +2.49%

FTSE 100 - Fallers Rentokil Initial (RTO) 105.00p -6.25% Old Mutual (OML) 106.40p -2.30% Admiral Group (ADM) 1,035.00p -2.27% BG Group (BG.) 1,078.50p -1.55% Centrica (CNA) 241.30p -1.51%