FTSE down 0.6 pct; StanChart falls on fundraising
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FTSE down 0.6 pct; StanChart falls on fundraising UPDATED 04 Aug 2009 | 09:12  
FTSE down 0.6 pct; StanChart falls on fundraising

By Harpreet Bhal

LONDON (Reuters) - Britain's bluechip shares edged lower in early trade on Tuesday, a day after hitting a high for 2009, as oil majors retreated on falling crude prices while Standard Chartered dropped after announcing a fundraising.

By 0823 GMT, the FTSE 100 was 0.6 percent, or 27.84 points lower at 4,654.62, after ending at 4,682.46 on Monday its highest closing level since the collapse of Lehman Brothers in early October 2008.

The index also rose to an intraday high for 2009 of 4,710.23 on Monday, and has gained over 30 percent since hitting a trough in March 9.

Energy stocks were lower as crude prices fell back below $71 a barrel after pushing above that level on Monday.

Oil majors BG Group, BP and Royal Dutch Shell fell between 0.3 and 0.5 percent.

Explorer Tullow Oil, however, was up 0.5 percent after striking oil in Uganda's Ngara-1 well.

Banks were mixed, with Standard Chartered falling 3.8 percent after the lender announced a surprise 1 billion pounds equity fundraising while it posted a better-than-expected 10 percent increase in its first-half profit.

"Standard Chartered reported an impressive set of numbers this morning... but the decision to sell shares to build a war chest, despite the CEO claiming otherwise, will raise a few eyebrows," said Manoj Ladwa, senior trader at ETX Capital.

HSBC fell 0.3 percent on profit-taking after strong gains following results on Monday, but Barclays rose 2.2 percent as Deutsche Bank upped its target to 4.00 pounds from 3.69 following its results on Monday. Royal Bank of Scotland and Lloyds Banking Group added 3.2 and 1.7 percent respectively ahead of numbers later this week.

Miners were lower with the exception of Xstrata which rose 1 percent, despite posting a drop in profits. The miner said it still sought a merger of equals with rival Anglo American, which fell 2 percent.

Randgold Resources, BHP Billiton, Lonmin Kazakhmys and Rio Tinto were down 0.5 to 1.2 percent as metal prices retreated after gains on Monday.

Insurers were lower, led by a 3.5 percent drop in Legal & General after it halved its interim dividend to conserve cash while it posted a 12 percent rise in first-half profits.

Aviva, Friends Provident, Old Mutual, Prudential and Standard Life lost between 0.8 and 1.8 percent.

Among the mid cap fallers, William Hill fell 8.1 percent, after Britain's biggest bookmaker said full-year profits from its retail business were likely to be lower than previously expected after trading weakened during July.

Betting peer Ladbrokes shed 5.7 percent with the warning.

UTILITIES RISE

Among the blue chips risers, utilities Centrica, Penon Group and Severn Trent rose between 0.6 and 1.3 percent as risk appetite continued to ebb and flow.

Blue chip publisher Reed Elsevier was 2.1 percent higher as Citigroup raised its stance to "buy" from "hold".

Mid cap engineers found support after results.

Automotive and aerospace parts maker GKN added 6 percent after the company posted a smaller-than-expected first half pretax loss of 8 million pounds.

Ceramic materials group Cookson advanced 5.7 percent after the firm said it had reduced net debt to 438 million pounds as it swung to a loss in the first half but said its end-markets were seeing signs of improvement.

On the economic front, July UK PMI construction data will be scrutinised on Tuesday for possible further clues to the outcome of this week's two-day Bank of England Monetary Policy meeting, which is due to start on Wednesday.

Investors will also eye June U.S. personal income and consumption data, a preferred inflationary measure for the Federal Reserve, to be released at 1230 GMT, as well as June U.S. pending home sales, due at 1400 GMT.

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