By Dominic Lau
LONDON, May 8 (Reuters) - Britain's leading share index fell
in late morning on Thursday ahead of the Bank of England's (BoE)
interest rate verdict, as gloom in oil shares and banks offset
gains in miners and forecast-beating results from Unilever.
Unilever <ULVR.L> advanced 4.5 percent after the food and
consumer goods group beat forecasts with a 7.2 percent rise in
first-quarter underlying sales and said it expected sales in the
year to beat its target range. []
By 0954 GMT, the FTSE 100 <> was down 22.6 points, or
0.4 percent at 6,238.4, after gaining 0.7 percent on Wednesday.
Banks fell ahead of the UK rate decision. Barclays <BARC.L>,
Royal Bank of Scotland <RBS.L>, Lloyds TSB <LLOY.L>, Standard
Chartered <STAN.L> and HBOS <HBOS.L> lost 0.7 to 2.3 percent.
Also weighing on the sector was news that the U.S.
Securities & Exchange Commission planned to ramp up transparency
in top Wall Street firms. []
The BoE is set to announce its rate decision at 1100 GMT and
analysts expect the central bank to keep rates at 5 percent.
"The market may take that as a little bit of a relief that
the Bank doesn't feel under pressure to cut for what would have
been seen as an emergency cut if it came," said Roger Cursley,
UK strategist at Investec.
"Today's moves are very much result-driven...The market is
trying to look at some of those heavily sold stocks and if there
are signs that things aren't getting worse than we thought, then
they will re-rate quite strongly." Cursley said.
The European Central Bank is also expected to leave rates
unchanged at 4 percent when it announces its decision at 1145
GMT.
The National Institute of Economic and Social Research said
Britain's economy continued to grow below its trend rate,
bolstering the case for an interest rate cut from the BoE.
U.S. stocks tumbled overnight on concerns about inflation
and higher interest rates as oil jumped to a record high. In
Asia, Japan's Nikkei average <> fell 1.1 percent.
Oil majors BP <BP.L> and Royal Dutch Shell <RDSa.L> fell as
crude prices <CLc1> eased from record highs. The two companies
were also among a dozen oil firms which agreed to pay $423
million and clean-up costs to settle litigation over decades of
groundwater contamination from the gasoline additive and
possible carcinogen MTBE. []
MINERS AND NEXT UP
Miners offered some support after Antofagasta <ANTO.L> said
it had reached a binding settlement with the Chilean Water
Authority over the construction of the Mauro dam and other
related cases over water rights. The sector also buoyed by
Lonmin's first-half profit.
Antofagasta strengthened 2.3 percent, Lonmin put on 2.5
percent, BHP Billiton <BLT.L> added 0.9 percent and Xstrata
<XTA.L> gained 1 percent.
Next <NXT.L> climbed 5.6 percent on short covering after the
clothing retailer said it continued to believe that sales in the
second quarter would "improve significantly" despite falls in
first quarter sales. []
Also featured on the upside, Sage Group <SGE.L>, Britain's
biggest software company, added 6.4 percent after it said
underlying first-half pretax profit rose 9 percent and said it
was confident for the full year. []
Carphone Warehouse <CPW.L> lost 2.1 percent after Europe's
biggest independent mobile phone retailer said it was to sell a
50 percent stake in its retail unit for 1.1 billion pounds to
U.S. consumer electronic retailer Best Buy <BBY.N> and the two
groups would launch a new company. []
The stock added 6.8 percent on Wednesday ahead of the
announcement.
Enterprise Inns <ETI.L> sank 7.4 percent after skyrocketing
nearly 30 percent in the previous session after Britain's
second-largest pub firm got the go ahead from the government to
convert to tax-efficient property status.
Insurer Old Mutual <OML.L> shed 2.7 percent after it
reported a 2-percent rise in first quarter life insurance sales,
missing analysts' expectations. []
