LONDON, July 20 (Reuters) - Britain's top share index moved
on Friday after banks were hit by a fresh bout of euro
zone-fuelled weakness, but it remained on course to chalk up its
longest run of successive weekly gains since mid-2005.
Banks were the biggest drag on the blue chips,
taking 7 points off the index and tracking euro zone peers lower after hawkish comments from a German politician about a
potential Greek exit from the bloc.
That pushed peripheral bond yields higher and fed through
into financial stocks, at the front line of the crisis due to
their holdings of government debt.
'Euro zone worries have resurfaced causing widening Spanish
and Italian bond spreads which in turn affected banks, as global
growth and poor economic data is also worrying,' said NewEdge
strategist Neil Marsh.
Barclays, also hit recently by its connection to
the allegations of Libor fixing that are dogging the sector, was
the top faller, down 2.9 percent.
'Banks are an unloved sector at the moment; the risk is
outweighing the rewards with the obvious issues covering
Barclays and HSBC - even the short sellers are concerned,' said
Galvan head of trading Ed Woolfit.
HSBC has been criticised by the U.S. Senate and acknowledged
shortcomings in its anti-money laundering operations.
'We position ourselves short HSBC and looking long in the
likes of Anglo American. You will see a shift of trading to
resource stocks like miners, who have been posting decent
results,' he added.
Global miner Anglo American, up 1 percent, posted a
rise in second quarter output for its key commodities, with iron
ore and copper helped higher by production ramp ups at the
flagship Kolomela and Los Bronces mines, while platinum and
diamonds were weaker.
These positive results and a stronger overall performance by
the heavyweight mining sector earlier in the week have boosted
sentiment that the FTSE 100's gains can continue, while some
chartists are also optimistic.
An index move over the 5,700 mark is supported technically,
said Phil Roberts, chief European technical strategist at
'The sideways drift that we have been in the last few days
suggests that we are moving higher. Today we are looking to see
if it (the FTSE) will keep moving over the trading range of the
last week -- if it does, then it suggests upside for the next
week. (A) test of 5,735 looks very likely.'
At 1055 GMT, the blue-chip FTSE 100 index was at
5,682.40, down 31.79 points, or 0.6 percent, but still on course
to rack up its seventh straight week of gains, which would be
the longest such run for seven years.
Leading fallers across both the large and mid-caps, and in
chunky volume more than twice its 90-day daily average, was
British insurer Resolution, down 9 percent after it
cancelled a planned share buyback.
The biggest drag on blue chip sentiment, however, was once
again heavyweight Vodafone, down 2.4 percent and
shaving nearly 9 points off the FTSE, as the world's largest
mobile operator by revenue reported a sharp drop off in organic
growth in the first quarter.
The British firm posted its first quarter group service
revenue of 9.98 billion pounds, reflecting organic growth
year-on-year of 0.6 percent, which was below the
Reuters-compiled consensus of 0.9 percent.
(Editing by Simon Jessop/Ruth Pitchford)
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