Britain's top share index flat

Britain's top share index ended flat on Monday as plans by Royal Bank of Scotland for a rights issue and poor results from Bank of America led banks lower, offsetting gains in commodity shares. The FTSE 100 closed down 3.5 points, or 0.06 percent, at 6,053.0, outperforming Germany's DAX and France's because of gains in heavyweight commodity stocks.
The UK's blue chip index has added more than 6 percent this month but is still down 6 percent for the year. Banks were the standout losers despite the Bank of England announcing an offer to swap government bonds worth 50 billion pounds for banks' riskier mortgage debt in an effort to ease the effects of a credit crunch on Britain's banking system.
The UK central bank said it would allow banks to swap mortgage-backed bonds, which have become hard to trade, for specially-issued Treasury bills. Barclays, HBOS, Lloyds TSB, HSBC, Standard Chartered and Alliance & Leicester were down between 0.9 and 3.5 percent.
"Much of the news of the Bank of England move was pretty much priced in. The next stage is to see just how successful the action is going to be. Clearly it is going to take a few weeks to work its way through," said Richard Hunter, head of UK equities at Hargreaves Lansdown. "We are having some profit-taking on Wall Street at the moment ... we have less than satisfactory figures from the Bank of America."
Royal Bank of Scotland shed 3 percent as it was set to announce Europe's biggest rights issue and some $10 billion of losses on investments this week. J.P. Morgan estimated RBS, Barclays, HBOS and Lloyds together had a capital shortfall of nearly 37 billion pounds.
A poor results from Bank of America, the largest US retail bank, also weighed on the UK banking sector. ITV topped the gainers' list on the FTSE 100, up 6.1 percent after the Sunday Telegraph said pay-TV firm BSkyB had received expressions of interest in its stake in ITV from European broadcaster RTL and US billionaire Haim Saban.
BSkyB, whose shares were down 1 percent, could not be reached for comment, while ITV declined to comment. Morgan Stanley said in a report that the bear market rally was over, adding that it moved equities to a neutral position from a 5 percent overweight, while it upgraded cash to "overweight" from "neutral" and kept bonds on an "underweight" rating.
Oil shares offered support as crude prices surged above $117 a barrel. BP advanced 1 percent, Royal Dutch Shell added 2 percent and BG Group put on 1.2 percent. Miners were also in demand, with Kazakhmys, Anglo American, BHP Billiton, Rio Tinto, Xstrata, Vedanta Resources and Antofagasta gaining between 1.4 and 3 percent.
GlaxoSmithKline rose 1.1 percent after Credit Suisse raised its price target on the drugmaker, while a price target hike from Citigroup sent AstraZeneca up 0.8 percent. British Energy put on 2.4 percent. The Sunday Times said French utility Suez could bid for the British nuclear power operator.
Hammerson, British Land, Land Securities and Liberty International were down 1.9 to 5 percent after HSBC cut its price target on the property sector. Friends Provident dropped 2.6 percent after news that US buyout group J.C. Flowers had formally withdrawn from its 3.5 billion pounds pursuit of the UK insurer.