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FTSE gains but RBS slides on branch disposal setback
by Gavin Lumsden on Oct 15, 2012 at 09:04
The FTSE 100 rose 21 points or 0.3% to 5,813 in early trading after better-than-expected Chinese export figures overnight.
However, more important data on how China is doing will arrive on Thursday, when the country will say how much its economy grew in the third quarter.
Royal Bank of Scotland (RBS.L) was the biggest blue chip faller, down 1.3% to 267.4p, as investors reacted to Banco Santander’s decision to pull out of the £1.65 billion deal to buy 316 of its branches.
The decision, announced late on Friday, is a blow for the state-owned bank,which may now struggle to meet a European deadline for selling assets in return for the 2008 taxpayer bailout.
However, analysts at Liberum Capital suggested the impact of a lower sale price would be ‘broadly offset by retained earnings (£300 million per annum) from the highly profitable branches during the extended sale period’.
BT (BT.L) fell nearly 3p or 1.2% to 215p after Barclays downgraded the telecoms operator to 'equal-weight' from 'over-weight' over concerns about the worsening economy will have on its corporate business. It also sees BT's move into sports broadcasting putting pressure on costs.
Miners lost ground after Goldman Sachs cooled on the sector, cutting Antofagasta (ANT.L) to 'sell' from 'neutral' and lowering its price target to £11 from £11.50 (the shares dipped to £12.66); Rio Tinto (RIO.L) to 'neutral' from 'buy' and slashing the price target to £34 from £37.50 (its shares fell 0.5% to £30.05); and BHP Billiton (BHP.L) (down 0.2% to £19.31) as Goldmans retained its ‘buy’ rating but reduced the target price to £24 from £25.
Fresnillo (FRES.L), the Mexican silver miner, also dipped 9p to £19.31 after production rose 2.6% in the third quarter and the company said it was on track to meet its 2012 targets.
Hargreaves Lansdown (HRGV.L) surged 3% to 733p to top the leader board as the investment supermarket continued to enjoy momentum from its first quarter trading statement on Friday.
Elsewhere Trinity Mirror (TNI.L) sagged a penny or 1.5% to 65p after the newspaper publisher’s new boss, Simon Fox, merged its national and regional divisions to cut costs.
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- Royal Bank of Scotland Group PLC (RBS.L)
- Antofagasta PLC (ANTO.L)
- Rio Tinto PLC (RIO.L)
- Bhp Billiton PLC (BLT.L)
- Fresnillo PLC (FRES.L)
- Hargreaves Lansdown PLC (HRGV.L)
- Trinity Mirror PLC (TNI.L)
- Kingfisher PLC (KGF.L)
- BAE Systems PLC (BAES.L)
- BT Group PLC (BT.L)
- Wolfson Microelectronics PLC (WLF.L)
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