* FTSE down 0.2 pct after BoE holds rates steady
* Friends Provident down after H1 earnings
* Smith & Nephew earnings please
* Oils track higher energy costs
By Michael Taylor
LONDON, Aug 7 (Reuters) - Britain's leading share index
ended lower during a choppy session on Thursday as corporate
updates offered a mixed picture, while higher crude prices
helped buoy oil companies but raised inflation concerns.
The benchmark index was little affected by the Bank of
England's holding interest rates at 5 percent for the fourth
straight month. []
The FTSE 100 <> lost 8.6 points or 0.2 percent at
5,477.5 after gaining 0.6 percent in the previous session. The
UK's bluechip index is now down 15.2 percent for the year to
date.
"No change was by far the market consensus, despite the
minutes from the previous meeting showing a three-way split,"
said Martin Slaney, head of derivatives at GFT Global Markets,
referring to the BoE decision.
"The reality is that despite a clearly slowing economy, the
twin evil of rising inflation simply rules out any possibility
of a majority decision in favour of a cut or a hike in rates for
now."
Oil and gas producers were the top gainer by sector, helped
by crude prices that rose toward $120 a barrel as supply
concerns returned to centre stage.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas producer BG Group
<BG.L>, Cairn Energy <CNE.L> and Tullow Oil <TLW.L> added
between 0.5 and 3.4 percent.
British Airways <BAY.L> dipped 4.9 percent however, as
traders pointed to the rising energy costs.
Among companies reporting, Smith & Nephew <SN.L> climbed 5.2
percent after Europe's biggest medical device maker posted
better-than-expected second-quarter earnings as revenues hit $1
billion for the first time. []
Banks gained as Barclays' <BARC.L> first-half profits beat
forecasts and investors were cheered by stronger-than-expected
revenue growth and capital position, and good cost control.
Barclays tacked on 1.6 percent, HBOS <HBOS.L> was up 0.5
percent, and Lloyds TSB <LLOY.L> gained 1.4 percent.
Royal Bank of Scotland <RBS.L> shed 0.5 percent ahead of its
first half results on Friday.
"Barclays' results seem to have been relatively well taken,"
said Roger Cursley, UK strategist at Investec. "People are
taking money out of the resources sector generally and closing
short positions particularly in the financials and credit market
sensitive areas."
"But I am not sure that underlying sentiment has improved
greatly. There is still deteriorating economic news. Rather than
people actively chasing the stocks for good news, I think they
are just unwinding the risk positions."
Investors remained cautious due to poor global economic
growth, financial market troubles and falling house prices.
British house prices fell at a record annual rate in July to
their lowest level in two years, data from Britain's biggest
mortgage lender HBOS showed. []
FRIENDS PROVIDENT FALLS
British insurer Friends Provident <FP.L> slipped 4.9 percent
after a 20 percent drop in first-half profit, at the low end of
expectations, as pensions, protection and investment sales fell.
In mixed miners, Xstrata <XTA.L> lost 0.7 percent. The miner
unveiled a $10 billion takeover bid on Wednesday for the world's
third-biggest platinum producer, Lonmin <LMI.L>, which gained
0.4 percent.
With base metal prices up, Antofagasta <ANTO.L> and Eurasian
Natural Resources <ENRC.L> rose 4.4 and 9.8 percent
respectively.
British mall owner Liberty <LII.L> dropped 5.4 percent to
851.49 pence, after JP Morgan downgraded the stock to
"underweight" from "neutral" and slashed its price target to 660
pence from 1,000 pence.
"There is not much to talk about," said Chris Hossain,
director of trading Blue Index. "People were waiting for the
rates decision and it came with no surprises. We have Royal Bank
of Scotland out tomorrow but not other big numbers."
(Additional reporting by Dominic Lau, Atul Prakash and Patrizia
Kokot)
