By Michael Taylor
LONDON, April 17 (Reuters) - The FTSE 100 <> of
Britain's leading shares reversed earlier gains by midday on
Thursday, down 0.3 percent as beaten-down banks led the upside
but weakness in oil stocks weighed.
At 1120 GMT the blue-chip index was down 18.4 points at
6,027.8 to track back from a two-day winning streak but remain
above the psychological 6,000 mark.
Oil shares were weaker as crude prices <CLc1> eased after
hitting a new high of $115 a barrel. Royal Dutch Shell <RDSb.L>
dipped 1 percent, BP <BP.L> shed 0.4 percent, and Cairn Energy
<CNE.L> dipped 2 percent.
Traders said there was a feeling among investors that the
price of oil was peaking.
Banks extended gains however, on hopes that an intervention
plan being considered by British authorities will help ease
tensions in the mortgage market, with lender Alliance &
Leicester <ALLL.L> up 3.9 percent and HBOS <HBOS.L> rising 3
percent.
A Treasury source said earlier that British authorities
could announce details of the plan, which is expected to allow
banks to temporarily swap mortgage-backed securities for
government bonds, as early as next week.
Barclays <BARC.L>, Royal Bank of Scotland and Lloyds TSB
<LLOY.L> advanced 2.1-2.8 percent.
"The business I'm seeing is on the short side...a lot of
uncertainty out there," said Matt Basi, a sales trader at IG
Index. "Slightly surprised we didn't see more of a boost today
(in banks) -- it sounds like good news for people looking for
liquidity."
"Perhaps giving banks a touch of a lift but there is general
uncertainty out there and a feeling that any short-term measure
might be delaying the inevitable. Light volumes on the long
side."
The FTSE 100 slipped out of positive territory after
first-quarter earnings from Merrill Lynch <MER.N>. The world's
largest brokerage reported a first quarter loss, after taking
several billion dollars of writedowns for subprime mortgages and
other risky assets.
Further on the downside, Vodafone <VOD.L> slipped 0.7
percent after the Financial Times said the mobile phone giant
was considering joining the bidding for Tiscali <TIS.MI> as the
Italian telecommunications group set a deadline of May 5 for
initial non-binding offers.
Also, Nokia Oyj <NOK1V.HE>, the world's biggest maker of
mobile phones, said it expected the cellphone market to fall in
euro terms in 2008.
Weighing on sentiment, British housebuilder Taylor Wimpey
Plc <TW.L> lost 4.7 percent after it said that based on current
market conditions in Britain and the United States its 2008
results will be at the lower end of its expectations.
British shopping catalogue and educational supplier Findel
<FDL.L> dived 38.2 percent after it issued a profit warning as
it made a higher-than-expected provision for bad debts due to
the credit crisis, sending its shares down over 30 percent.
SABMILLER RAISES SOME CHEER
Shares in SABMiller <SAB.L> tacked on 4.6 percent to 1,172
pence and a near three month high, after Lehman Brothers raised
its price target on the global brewer to 1,290 pence from 1,265
pence with an "equal weight" rating.
Miners headed south as metal prices dipped following large
gains on Wednesday, with BHP Billiton <BLT.L>, Anglo American
<AAL.L>, Kazakhmys <KAZ.L> and Vednata <VED.L> between 0.2 and
1.3 percent lower.
Rio Tinto <RIO.L>, which is fighting a takeover from BHP,
was down 1.1 percent after it said it was about a quarter of the
way through a plan to sell $10 billion in assets this year to
offset some of the $39 billion it paid for Canadian aluminium
maker Alcan.
Shares in Thomson Reuters, formed by Thomson Corp's more
than $16 billion cash and stock purchase of Reuters Group Plc,
debuted at 1,700 pence and traded down at 1,644 pence ahead of
dealings starting later in the day in Toronto.
ABN AMRO began coverage of Thomson Reuters with a "sell"
rating and a 1,500 pence price target.
(Additional reporting by Dominic Lau; editing by Elaine
Hardcastle)
