Britain's leading shares ended fractionally down during a choppy trading session on Tuesday as mining companies tracked weaker metal prices while ITV marched upwards as persistent bid chatter swirled. The FTSE 100 was down 7.3 points, or 0.1 percent at 5,534.5 points, after hitting a low of 5,491.3 and a high of 5,569.2. On the downside, metal prices eased as investors shifted some of their money back to the dollar, which weighed on mining stocks.
Rio Tinto, BHP Billiton, Eurasian Natural Resources, Xstrata, Ferrexpo and Vedanta Resources were between 1.2 and 6.8 percent lower. "New York has come in a bit weaker and we've tracked them down, to be fair," said Lawrence Peterman, investment director at Eden Financial. "It's very quiet, volumes are quite low - just because it's August. We've had a good run up the market from the lows and waiting to see the next move," he added.
"Unless we get a real big crack in the oil price, the market will probably stay around these sort of levels," he said. Topping the FTSE 100 gainers' list, British free-to-air broadcaster ITV tacked on 6.3 percent to reach its highest level in more than six weeks as traders cited lingering market talk of a possible bid from TV producer Endemol.
Some analysts doubted whether a take-over was on the cards. "In reality, Endemol is unlikely to be interested in ITV's broadcasting assets from which it would be very difficult to separate the content business," said UBS analysts in a note to clients. Volatile banks were down after Switzerland's UBS, which has been Europe's hardest-hit victim of the credit crunch so far, reported a second quarter net loss of 358 million Swiss francs ($332 million), slightly worse than expected.
Also, J.P. Morgan, the third-largest bank in the United States, said it had taken another $1.5 billion in writedowns in the current quarter as wider credit spreads, lower levels of liquidity and further disruption in the credit and mortgage markets took a toll. "It is a bit of a wake up call that we are not out of the woods yet," said Tim Hughes, head of sales trading at IG Index. Barclays, Royal Bank of Scotland, HBOS and Lloyds TSB were down 0.3 to 1.4 percent.
Standard Chartered shed 6.8 percent to 1,490 pence, after Citi downgraded the Asia-focused lender to "sell" from "hold" and cut its price target to 1,300 pence from 1,525 pence. Broker RBS also trimmed its target price on StanChart to 1,660 pence from 1,700 pence and kept a "hold" rating. The blue chip index was little affected by a report which showed UK consumer price inflation in July rose more than expected.
On the economic front, the Royal Institution of Chartered Surveyors said British house prices fell slightly less than expected in the three months to July, but the number of completed sales per surveyor fell to their lowest level in at least 30 years. Also, British like-for-like retail sales fell 0.9 percent on a year ago in July, another survey showed, as the economic slowdown hits consumer appetite for spending.
In other commodities, oil stocks rose with volatile US crude prices at $113 a barrel after Russia said it ordered a halt to military operations in Georgia following five days of fighting. BP, Shell and Cairn Energy added 1.1-1.9 percent. London Stock Exchange Group lost 7 percent as traders pointed to negative broker comment and fee and competition concerns.
Turquoise, the trading platform set up by investment banks to challenge existing stock exchanges, will launch on Friday. InterContinental Hotels gained 3 percent after the world's largest hotelier reported a 29 percent rise in first-half operating profits, but said growth had slowed in the second-quarter, particularly in the United States.
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