*FTSE 100 ends down 2.2 pct, closes in bear market territory
*Oils and banks the heaviest drag on the index
*Experian surges after Q1 holds up
By Dominic Lau
LONDON, July 10 (Reuters) - Britain's FTSE 100 <> fell
2.2 percent on Thursday to close in bear-market territory --
down 20 percent from a multi-year peak a year ago -- as oil and
banks weighed on the index.
The FTSE 100 ended down 122.8 points at 5,406.8, reversing
the previous session's gains and shrugging off the Bank of
England's expected decision to hold rates unchanged, after
gaining 1.6 percent on Wednesday.
The UK benchmark index has fallen 20 percent from the level
of 6,754.1 on July 13, 2007 and has lost 16.3 percent so far
this year.
"The equity markets are basically tanking on the back of
declining earnings prospects, which in turn is a function of
slowing economy both at home and aboard," said Peter Dixon, UK
economist at Commerzbank.
"Irrespective of what the Bank of England does, it is not
going to lead to a major correction in the equity markets
anytime soon. You can argue theoretically that a rate cut will
give something of a lift ... but if the impact of falling
earnings-growth estimates is faster than the pace of rate cuts,
it's not going to help."
Heavyweight oil shares suffered as crude prices <CLc1>
remained below recent record highs despite trading up to above
$137 a barrel.
BP <BP.L> dropped 2.1 percent, Royal Dutch Shell <RDSa.L>
lost 2.5 percent and gas producer BG Group <BG.L> shed 3.7
percent.
Banks were another standout losing sector, with Barclays
<BARC.L>, HSBC <HSBA.L>, Royal Bank of Scotland <RBS.L> and
Lloyds TSB <LLOY.L> losing 1.4 to 4 percent.
Midcap Bradford & Bingley <BB.L>, however, extended its
recovery into a second day, up 4.6 percent on hopes a buyer
could sweep up the troubled British mortgage lender.
The Bank of England held interest rates at 5.0 percent as
policymakers tussle with slower economic growth on the one hand
and surging inflation on the other, but analysts said rates
would have to fall eventually. []
Thomas Cook <TCG.L> topped FTSE 100 losers, down 9.2 percent
as concern over the macroeconomic outlook continued to take its
toll on travel stocks. TUI Travel <TT.L> lost 4.9 percent.
Cadbury <CBRY.L> shed 7.5 percent after Merrill Lynch
downgraded the confectionery group to "underperform" from
"neutral", traders said.
Among other top decliners, commercial broadcaster ITV
<ITV.L> lost 6.7 percent after UBS analysts predicted a sharp
deterioration in the UK TV advertising market in September.
Retailer Kingfisher <KGF.L> fell 5.3 percent after Goldman
Sachs cut its price target and added the stock to its
"conviction sell" list.
EXPERIAN SHINES
Credit information firm Experian <EXPN.L>, on the other
hand, was the top percentage gainer on the main index, up 7.9
percent, after it posted a 1 percent rise in first-quarter
revenues as acquisitions helped it beat forecasts for a drop.
London Stock Exchange <LSE.L> slipped 3.6 percent, paring
some of its 10 percent gain on Wednesday, when it said
first-quarter revenue rose 8 percent to 178 million pounds.
Among midcaps, F&C Asset Management <FCAM.L> plummeted more
than 28 percent to 97.55 pence after Kaupthing said it had
placed 95 million shares in the fund manager at 100 pence each.
Barratt Developments <BDEV.L> surged 24 percent after the
housebuilder said it would cut 1,200 jobs to cope with the
downturn in the housing market and would not pay a final
dividend for 2007-08. []
Rival builder Taylor Wimpey <TW.L> climbed 15.7 percent.
"The 'split' in returns between those countries where
central banks have cut rates (the U.S. and the UK) and those
that are still raising rates or would like to (eurozone and
Japan) can be expected to become starker," Blue Sky Asset
Management said in a note.
"This should keep the focus on searching for value or
defensives themes in the UK and the U.S. for now, with our now
well worn critical pointer being that a recovery in financials
in these two markets should serve as a useful barometer of when
the tide is turning."
(Additional reporting by Michael Taylor and Atul Prakash;
Editing by Quentin Bryar)
