* Oils, pharmas gain ahead of Q3 results this week
* Shire leads drugmakers higher on Vyvanse news
* British Airways falls on antitrust threat, downgrade
By Harpreet Bhal
LONDON, Oct 26 (Reuters) - Britain's top shares edged up 0.2
percent by midday on Monday as energy firms and drugmakers
gained ahead of third-quarter earnings this week, outpacing a
decline in banks and life insurers.
At 1150 GMT, the FTSE 100 <> was up 10.90 points at
5,253.47 points. Gains were exaggerated by thin volumes, with
the index trading at just 24 percent of its average 90-day
trading volume.
Energy firms added the most points to the index as crude
prices hovered <CLc1> around $80. BP <BP.L> and BG Group <BG.L>,
which report third-quarter earnings on Tuesday and Wednesday
respectively, were up 0.7 and 0.1 percent while Royal Dutch
Shell <RDSa.L> and Tullow Oil <TLW.L> put on around 0.7 percent
each.
Drugmakers also saw good demand ahead of third-quarter
numbers from the sector. Shire <SHP.L>, AstraZeneca <AZN.L> and
GlaxoSmithKline <GSK.L> were up 0.2 to 2.5 percent.
Shire got a boost from news that the U.S. Food & Drug
Administration has determined that the firm's key attention
deficit disorder treatment, Vyvanse, was properly granted
five-year market exclusivity. []
With the U.S. reporting season in full swing, analysts said
investors are now focused on third-quarter results from UK firms
this week which would dictate the direction for equities.
"This (is) ... the first week when the UK corporate
reporting season really gets into full swing," said Richard
Hunter, head of UK equities at Hargreaves Lansdown.
"Most investors are going to be keeping their powder dry
until they digest the many corporate results we have got coming
on stream as the week progresses."
Defensive issues also lent some support to the index, with
heavyweight Vodafone <VOD.L> up 0.5 percent and household
cleaning products firm Reckitt Benckiser <RB.L> up 1.5 percent.
Cable & Wireless <CW.L> rose 2.3 percent, benefiting from a
report in the Sunday Times that the company has revived plans
for a 3.6 billion pound demerger, a year after putting a
proposed split on hold.
BANKS UNDER PRESSURE
Banking stocks were on the back foot, led by falls in
part-nationalised lenders Lloyds Banking Group <LLOY.L> and
Royal Bank of Scotland <RBS.L>, which were down 4.3 and 3.1
percent, as cash call concerns continued to worry investors.
HSBC <HSBA.L> shed 0.6 percent, impacted by a downgrade to
"hold" from "buy" by Citigroup, while Barclays <BARC.L> was off
1.5 percent.
British banks must give breakdowns of bonuses by the end of
the week or they will need to use the cash to beef up reserves,
the Sunday Times reported quoting Adair Turner, head of
Britain's banking regulator. []
Meanwhile, retail banks should be stopped from paying big
cash bonuses and use the money instead to support new lending,
according to the text of a speech to be given by the opposition
Conservatives' finance spokesman on Monday. []
British Airways <BAY.L> lost 3.8 percent after a Financial
Times' report said the airline, along with Iberia <IBLA.MC> and
American Airlines <AMR.N>, may have to give up take-off and
landing slots to satisfy EU conditions for a proposed tie-up.
Deutsche Bank downgraded its stance on BA to "sell" from
"hold", citing tie-up risks.
Life insurer Prudential <PRU.L> lost 1 percent, weighed on
by a rating downgrade to "hold" from "buy" by SG Securities on
valuation grounds.
Legal & General <LGEN.L>, RSA Insurance <RSA.L>, and
Standard Life <SL.L> fell 0.2 to 0.8 percent.
Standard Life is not looking to sell off its underperforming
Canadian business, according to a source, despite a newspaper
report saying that it had asked its advisors to review the unit.
[]
(editing by Tiisetso Motsoeneng and John Stonestreet)
