Britain's blue chips closed higher on Friday, ending a four-day losing streak, with hotel and leisure group Whitbread the biggest gainer on the day. Shares in Whitbread scaled six-year highs and closed up 7.7 percent after it said it might sell all its luxury Marriott hotels. Analysts reckon a sale could be worth over 1 billion pounds ($1.9 billion), and the market is anticipating that much of that money will be returned to shareholders. The FTSE 100 blue-chip index closed 0.4 percent higher at 4,982.0, recovering from its lowest finish since February 4 but still registering a 1 percent fall on the week.
Dave Bradbury, head of equities at Canada Life, said the FTSE could well be held in a narrow range for a while, while the UK budget looms next week and a general election is widely expected in May.
"We've finished the results period, corporate activity hasn't been in the really big stocks and we're not seeing upgrades or downgrades. There's an election coming up and the budget next week. There are lots of question marks hanging around," he said.
"Really we need to see either the economy growing a bit more quickly so that we get earnings upgrades or some renewed corporate (merger) activity, and at the moment probably both of those things are unlikely," Bradbury added.
Traders said any further relief in oil prices, which have retreated from near record highs above $55 a barrel, could aid the FTSE 100 by reducing costs to industry and damping down inflationary pressures.
"The oil price has been the main reason the market's been falling for most of this week, so if the oil price does roll back then we'll push up again," said one.
InterContinental Hotels, Thursday's star FTSE performer, fell 2.4 percent, overshadowed by the Whitbread leap. InterContinental shares gained on Thursday on its announcement that it had raised a further 1 billion pounds from hotel sales and would hand the proceeds back to shareholders, on top of a previous 1 billion pound cash return.
Royal & Sun Alliance was another loser, down 1.8 percent after UBS downgraded the insurer. Other analysts also delivered a downbeat verdict following the company's results on Thursday.
"We fear that there are still outstanding issues to be addressed, many of which are likely to crystallise on any sale of the US business, which is under consideration. By the time the company has found an exit solution for its US business, the core profitability of the ongoing non-life insurance business is likely to be declining," Bear Stearns wrote in a research note.
In the technology sector, software maker Sage rose 1.5 percent, buoyed by news from industry bellwether Intel. The chipmaker raised its sales and profit margin forecasts and said it was scrambling to meet consumer demand.
Airline British Airways pushed up 2.2 percent, helped by the lower oil price and by a Goldman Sachs note naming the airline as a top pick.
Housebuilders crowded into the midcap leader board, with Bovis rising 5.1 percent ahead of annual results due on Monday. Among other gainers Redrow and Laing were up 3.5 percent after Britain on Thursday left interest rates on hold.
"There have been general fears about how rising interest rates will affect the housebuilders and they've been weak," said a market maker.
A bullish outlook boosted midcap insurer Catlin. Its shares climbed 4.8 percent after the company reported record profits in 2004 and predicted a "very good" 2005.
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