London shares up in midday deals; NY seen flat-to-higher; miners, oils gain

London shares up in midday deals; NY seen flat-to-higher; miners, oils gain

	Published : Fri, 26 Oct 2007 12:20 By : Agencies Print this Story

LONDON (Thomson Financial) - UK blue-chips pushed higher in midday deals, ahead of an expected flat-to-higher open on Wall Street, buoyed by the mining sector on continuing bid speculation and firm metals prices, and oil stocks on record oil prices.

At 12.20 pm, the FTSE 100 index was 32.1 points higher at 6608.4, just down from the session high of 6608.6, having recovered from a low of 6,567.1, while the FTSE 250 index dropped 14.9 points to 11,465.6.

Volume was firm, with 1.1 bln shares changing hands in 242,171 deals.

'It's really very quiet out there. The main drivers today are the commodity stocks, with oil hitting record prices overnight, gold up 8 usd, and copper, 3.50 usd,' said Mic Mills, a trader from Tradindex.com.

'What the markets are really doing is looking to the Fed's (interest rate) announcement next week,' he added.

In commodity news, oil briefly topped 91 usd in Asian trade Friday on rising tensions in the Middle East following Turkey's military threat against Kurdish rebels in Iraq and new US sanctions on Iran.

Earlier, New York's main futures contract, light sweet crude for delivery in December, was up 42 cents at 90.88 usd a barrel after closing at 90.46 usd in US trading overnight.

Looking ahead, Wall Street is looking at a flat-to-higher open as strong quarterly results from software giant Microsoft are tempered by concern over the impact on economic growth of a fresh spike in oil prices.

According to spread bettors IG Index, the Dow Jones Industrial Average is expected to open up 18 points at 13,690. Separately, S&P 500 futures were off 0.80 point at 1,524.30 while Nasdaq 100 futures gained 4.75 points to 2,198.

Yesterday, stocks ended slightly lower on mixed earnings reports, higher oil prices and data that did little to ease concerns about the current state of the economy.

The University of Michigan is expected to report later this morning that consumer sentiment weakened in October.

Turning to UK equities, Xstrata led the miners higher, up 85 pence at 3,426, with Antofagasta and Rio Tinto, up 15 pence at 833 and 81 pence at 4,316 respectively, also seeing good gains, with sector consolidation talk helping buoy the shares alongside the strong metal prices.

Bucking the trend was Lonmin, shedding 89 pence to 3,249, after Lehman Brothers cut its target to 3,400 pence from 3,600 after Lonmin's production update yesterday.

Elsewhere in the resource sector, Royal Dutch Shell added 41 pence to 2,108 and BP took on 7-1/2 pence to 620, with the latter bolstered not only by firm prices but news it is paying 373 mln usd to put an end to investigations in the US.

But leading the FTSE 100 gainers, was Standard Chartered, up 59 pence at 1,780, as speculation of further stake-building by Singapore's Temasek Holdings and vague talk as well that Bank of China could be eyeing the Asian-oriented bank did the rounds.

Meanwhile, Resolution shares took on 10-1/2 pence to 719, after agreeing to a 4.9 bln stg cash-and-shares takeover offer from rival Standard Life, which gained 1-3/4 pence to 227-1/2.

And Northern Rock featured yet again, up 0.7 pence at 188.2, as JC Flowers moved a step closer to bidding for the troubled mortgage bank. It announced the management team for its bid for the troubled UK mortgage lender, confirming earlier press reports.

In a statement to the stock exchange, the consortium said it was lining up former Marks & Spencer chairman Paul Myners as chairman.

In the statement, JC Flowers confirmed it is in continuing discussions with Northern Rock on a possible offer.

Continuing yesterday's rally were shares in Intercontinental Hotels Group, up 8 pence at 1,103, following news earlier in the week it intends to revamp its Holiday Inn brand.

Turning to the casualties, Sainsbury dropped 16 pence to 568, amid concern over potential bid prospects, as Delta Two, the Qatar-backed investment fund, says it is seeking extra equity but that there can be no certainty such funding will be forthcoming.

In a joint statement, Sainsbury and Delta said they have agreed it is in the 'best interests of shareholders and colleagues to bring this process to a conclusion as soon as practicable'.

On the second line, Debenhams was among the top risers in midday deals, up 4 pence at 116-1/4, with continued buying after trading news yesterday was better-than-expected and Merrill Lynch reiterated its 'buy' stance.

On the 250 downside, Charter shed 40 pence to 1,105, put under pressure by a downgrade from Panmure Gordon.

Earlier today, the broker downgraded its view to 'hold' from 'buy' and lowered its price target to 1,275 pence from 1,365, following a slow-down warning from US peer Lincoln Electric last night.

Negative broker comment also helped to push Halfords 11-1/2 pence lower to 342.

Earlier, UBS cut its price target to 390 pence from 430, although it has left its 'neutral' recommendation unchanged.

Finally, Northern Foods dropped 0-1/2 pence to 106-1/2 in midday deals, after Citigroup cut its price target for the company to 95 pence from 110, citing concerns on cost inflation.

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