LONDON shares ended slightly higher yesterday as takeover talk boosted miners, while financials eased as the Bank of England left interest rates unchanged.
The benchmark FTSE 100 Index climbed 9.8 points, or 0.2 per cent, to 6,270.8 during a chopp
y session. It is still down by almost 3 per cent for the year.
CMC Markets dealer Jimmy Yates said: "The FTSE is certainly looking resilient, holding well clear of the 6,100 level, but the scope for some quick profit- taking shouldn't be overlooked either."
Banks weighed on the index after the decision to freeze rates at 5 per cent, as many economists had been expecting. Royal Bank of Scotland fell 6.75p, or 1.9 per cent, to 357.25p, HBOS dipped 6p to 512.5p and Barclays was down 2.5 per cent at 463p.
Also weighing on the sector was news that the US Securities & Exchange Commission planned to ramp up transparency in top Wall Street firms.
Commenting on the Bank of England verdict, Axa Investment Managers strategist Chris Iggo said: "I thought there was a chance that they might actually move. To be sensible you need to go with form and the form is that they don't often cut rates two meetings in a row.
"The data is shocking," he added. "It's like the economy has completely stalled in March and April. Retail sales down, CPI surveys were horrible, mortgage approvals taking another leg down – if it was that simple that they were just responding to data then they should have gone, and I think they will in June. The complicating factor is inflation."
The European Central Bank also decided to keep rates on hold, at 4 per cent.
Earlier in the day, the National Institute of Economic and Social Research said Britain's economy continued to grow below its trend rate.
Yates added: "Looking towards the weekend break there's not much fundamental data due for release but the continued run of high oil prices may be a cause for some concern."
Shares in high street darling Next jumped 6 per cent or 74p to 1,302p, after the group said the warm weather offset a tough first quarter, keeping it on course to meet forecasts for full-year profits. Rival retailer Marks & Spencer also rose on the news, ahead 15.5p at 411p, a jump of 3 per cent, while Argos owner Home Retail Group cheered 12.75p to 280.75p.
As well as the boost from Next, investors cheered better-than-expected performances from accountancy firm Sage and consumer products giant Unilever.
Unilever lifted 90p to 1,752p as it successfully passed on rising costs and said underlying sales were likely to rise by more than 5 per cent this year, ahead of its previous estimate for growth of between 3 and 5 per cent.
At the top of the list of share risers, accountancy software group Sage leapt 15.5p to 226.5p after half-year profits came in ahead of expectations and it said recurring subscription contracts would protect it in tougher economic times.
The full article contains 533 words and appears in The Scotsman newspaper.
