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Pin to quick picksBarclays Share News (BARC)

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Britain's FTSE boosted by Barclays, though mid-caps fall

Thu, 27th Oct 2016 16:35

* FTSE 100 up 0.4 pct

* Barclays top gainer after results

* Though Amec Foster Wheeler, Berendsen weigh on midcaps (ADVISORY- Follow European and UK stock markets in real time onthe Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

By Alistair Smout and Kit Rees

LONDON, Oct 27 (Reuters) - Britain's top share index rose onThursday in a choppy session, buoyed by well-received resultsfrom Barclays, though mid-cap stocks fell as earnings updatesled to double-digit slides for AMEC Foster Wheeler andBerendsen.

The blue-chip FTSE 100 index was up 0.4 percent at6,986.57 points by the close, while the moredomestically-focused FTSE 250 slipped 0.5 percent.

Barclays was the top riser on FTSE 100, up 4.8percent after its third quarter results beat forecasts.

The lender posted a rise in third quarter profits to 1.7billion pounds ($2.08 billion), helped by an improvement in itsinvestment bank division.

The bank has been outperforming the European sector sincethe beginning of last week, when the major U.S. banks reported abumper set of results and strong fixed income trading.

"Barclays earnings in the third quarter were boosted by itsinvestment banking business, mirroring a trend seen amongst thebig American banks," said Jasper Lawler, analyst at CMC Markets.

However, the bank continued to be dogged by UK-specificissues, such as a provision for mis-selling insurance and apension deficit due to lower interest rates in Britain.

Lloyds continued to rebound after droppingfollowing its own results on Wednesday. It initially fell as thegovernment restarted its scheme to sell its stake in the bank,but it closed 2.9 percent higher, extending a rebound fromWednesday's lows to 7.5 percent.

UBS reiterated a "buy" rating on the stock, raising itstarget price on the stock to 67 pence and saying that earningshad beaten is forecast by 2 percent.

The bank said that Lloyds commitment to maintain this year'starget of a 2.70 percent net interest margin as a target for2017 helped support shares from lows in the previous session.

Banks have struggled in the current low interest rateenvironment, with the Bank of England cutting rates for thefirst time since 2009 in August.

Like the banks, the pension deficit was a concern fortelecom BT, which dropped 2.2 percent after its ownupdate.

Barratt Developments fell more than 6 percent aftertrading ex-dividend.

The British midcaps underperformed their blue-chip peersafter disappointing results weighed on shares in Amec FosterWheeler and Berendsen.

Oil services firm Amec Foster Wheeler slumped morethan 20 percent, posting its worst day in almost a year aftercancelling its capital markets day and posting weak salesfigures.

Commercial laundry company Berendsen tumbled nearly16 percent on a profit warning.

This follows profit warnings from fellow midcaps Cobham, Keller and Senior over the past week.

"This earnings season isn't shaping up to be particularlygreat for medium-cap companies. They are the ones that arefeeling the pinch of Brexit that's been demonstrated in recentsets of earnings," Jonathan Roy, advisory investment manager atCharles Hanover Investments, said. (Editing by Andrew Heavens)

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