FTSE-100 ends off highs, British Airways strong

06 Nov, 2004

Britain's blue-chip shares closed firm but off fresh 28-month highs after a rally following way better-than-expected US jobs data ran out of steam, although oil at sub-$50 a barrel fired up a 4.2 percent gain for jet fuel-dependent British Airways.
Building materials firm Hanson was not far behind BA with a 2.8 percent gain on speculation that George W. Bush's re-election this week as US President will smooth the way for a legal settlement on asbestos claims.
The FTSE-100 index closed 11.5 points higher at 4,739.8, biting deep into gains which earlier took it up to 4,761.9 but still scoring a fifth straight gain. The index finished 2.5 percent up on the week after its best winning streak since early September.
Traders said news that twice the number of jobs than expected was added to US payrolls in October boosted shares at first, but a sudden fall in the dollar late in the session choked off gains.
"People had very good profits this week. I think they've looked at the way the dollar's fallen and decided to book profits because they didn't want to go home for the weekend leaving the dollar in this state," said a trader at a major European bank.
Jim McCafferty Head of Research at stockbrokers Seymour Pierce, said up until the FTSE retreat, which came mainly in the last 45 minutes of business, investors were feeling positive about the state of the market in the wake of Bush's re-election.
"There's a more stable macro environment now that we've got that political uncertainty removed, therefore people can make investment decisions with more comfort, that's what the market's been telling us," he said.
McCafferty said a big week of results next week from companies such as British Airways and telecoms groups BT Group and Cable & Wireless, would give the market fresh evidence to determine whether the FTSE can hold onto its gains.
"If companies come through with decent results that would justify these kinds of levels, if we see decent trading conditions ... it will hinge very much on company earnings," said McCafferty.
BT, Britain's dominant fixed-line operator, closed 2.3 percent higher, boosted by dealer reports that Smith Barney raised its rating to "buy" from "hold" and signalled that it could double its dividend levels over the coming 5 years. Smith Barney had no comment.
C&W rose 2.1 percent, after a report that it will make changes at the top of its UK operations as part of a cost-cutting drive to boost performance in Britain, which provides over half the group's sales.
Among the midcaps, furniture maker MFI rose for a second session, gaining another 5.8 percent as talk that predators want its highly regarded joinery business Howden refused to die down.
Oil exploration and production company Premier slid 5.7 percent after it said initial research failed to find hydrocarbons at one of its Mauritian wells.

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