FTSE ends flat as oils, miners, US data weigh

04 Dec, 2004

The FTSE 100 index of top UK shares closed flat on Friday as falling oil and commodity prices counterbalanced weaker-than-expected US jobs data and drops in oil and mining shares. Oil majors BP and Shell lost 0.5 percent each as crude oil prices slid yet again to just above $42 a barrel, their lowest levels since the end of August, recoiling further from record highs above $55 in late October as worries over supplies eased.
Technology stocks rose, with Dimension Data jumping 6.9 percent and ARM Holdings adding 1.5 percent, after a bullish sales outlook from US chipmaker Intel.
The Intel update to some extent offset the US jobs news, causing Wall Street to rebound from an early drop and leading to choppy late trading for the FTSE 100 index, which closed 3.3 points lower at 4,747.9.
"The market's not taking the jobs number too well ... but the oil price is down; that's positive," said Graham Secker, UK equity strategist at Morgan Stanley.
"By and large we're pretty happy with the market, and we're getting some support from money coming out of the oil sector and going into other areas and holding the market up," he added.
"With the oil price easing, corporate earnings can potentially go better, especially on the manufacturing side of things. Intel had a good forecast afterhours, so that's driven the US market," said Martin Dobson, Senior Dealer at brokers Hoodless Brennan.
The index finished 6 points up on last Friday's close.
Shares in British brewers and pub operators rose on consolidation hopes after Wolverhampton and Dudley made an agreed bid for smaller rival Burtonwood. Wolverhampton stock gained 6.7 percent, while Burtonwood rose 9.3 percent.
Shares in smaller pub firm Hardys & Hansons climbed 4.3 percent on speculation it could be the next target, dealers said.
Blue-chip company Enterprise Inns led FTSE gainers with a rise of 4.3 percent as it unwound a slide in the market's late closing auction on Thursday, dealers said.
Dominant fixed-lined telecoms operator BT Group gained 1.9 percent after it agreed a deal to take over Italy's Albacom, seeking out growth in the corporate telecoms sector outside its own fiercely competitive home market.
Falls in base metals prices dragged the miners shares lower, with copper miner Antofagasta the hardest hit with a fall of 2.7 percent as copper met fresh technical selling. Mid-caps were not immune, with Vedanta down 3.5 percent.
Rio Tinto fell 1.6 percent and Anglo American lost 1.5 percent after investment bank UBS cut its price targets on the stocks in line with lower earnings forecasts.
Building materials firm Hanson fell 1.1 percent as news that a US appeals court unexpectedly rejected ABB's bid for a $1.2 billion asbestos settlement reignited fears over asbestos-related claims. Hanson, the world's biggest aggregates producer, said in July it had 132,400 outstanding claimants in legal cases related to asbestos.
Among mid-caps, shares in car parts and bicycle retailer Halfords fell 3 percent after it said private equity house CVC had sold 46 million shares in the company at 295p.

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