(Major continental European stock markets are closed on
Thursday for the Labour Day holiday. The FTSE report serves as
the European stock report.)
By Dominic Lau
LONDON, May 1 (Reuters) - Britain's top share index ticked
down early on Thursday as gloom in the banking sector offset
gains for miners, while major continental European stock markets
closed for the Labour Day holiday.
British Airways <BAY.L>, however, climbed 2.9 percent to top
the gainers' list on the FTSE 100 <>. The airline said late
on Wednesday it was in discussions with two of its largest U.S.
rivals American Airlines and Continental Airlines <CAL.N>, which
a source briefed on the matter said was about a potential
alliance.
By 0750 GMT, the FTSE 100 <> was down 8.5 points, or
0.1 percent, at 6,078.9, after ending April with its best
monthly performance in five years.
The FTSEurofirst 300 <> of top European shares was up
0.1 points at 1,339.05.
The Bank of England said the scale of losses and the
economic fallout from the credit crunch may not be as bad as
feared, and subprime write-offs could end up costing less than
half market forecasts. []
Banks, however, remained under pressure, with Barclays
<BARC.L>, Royal Bank of Scotland <RBS.L> HBOS <HBOS.L>, HSBC
<HSBA.L> and Lloyds TSB <LLOY.L> off between 0.4 and 1.1
percent.
"There is no way the banks, until they quantify their
losses, are in any position to open their floodgate again, and
the (Bank of England liquidity) facility that was opened up was
so expensive, and there is no way the banks will use it to
stimulate the mortgage market," said David Buik of Cantor Index.
"In the next few months, it's quite likely that mortgage
rates, depending on who the lender is, will go up 1 to 2
percent, and property prices are likely to continue falling."
U.S. stocks fell overnight after the Federal Reserve trimmed
interest rates by 25 basis points to 2 percent but left unclear
the outlook for further rate cuts, prompting profit-taking. In
Asia, Japan's Nikkei average <> fell 0.6 percent.
Investors will also keep an eye on UK manufacturing PMI data
due at 0830 GMT and U.S. personal consumption expenditure data
and weekly jobless claims due at 1230 GMT for further clues on
the strength of the UK and the U.S. economies.
MINERS SUPPORT
Miners were in demand, tracking firmer metal prices.
Kazakhmys <KAZ.L>, BHP Billiton <BLT.L>, Rio Tinto <RIO.L>,
Xstrata <XTA.L>, Vedanta Resources <VED.L> and Anglo American
<AAL.L> were up between 0.2 and 2.8 percent.
In the oil and gas sector, heavyweight BP <BP.L> added 0.3
percent, and gas producer BG Group <BG.L> rebounded 2.7 percent
after shedding nearly 6 percent in the previous session. Royal
Dutch Shell <RDSa.L>, on the other hand, fell 0.7 percent.
Tullow Oil <TLW.L> slipped 1.5 percent after Congo's oil
ministry said it had awarded one of two Lake Albert oil
prospecting permits claimed by Tullow Oil to a rival consortium
including South Africa's state oil company PetroSA.
Rexam <REX.L> advanced 2.6 percent after the world's biggest
drinks can maker said first-quarter results were in line with
its expectations at constant currencies, and that its outlook
for the rest of the year remained unchanged.
GlaxoSmithKline <GSK.L> strengthened 0.8 percent after the
drugmaker said U.S. health regulators had said its Advair drug
was safe and effective for wider treatment of patients with
chronic obstructive pulmonary disease.
Among mid-caps, CSR <CSR.L> dived nearly 24 percent after
the British bluetooth specialist's second-quarter revenue
guidance disappointed and it said caution was needed as economic
weakness affects demand for its products.
