Flat Start for FTSE 100

The FTSE 100 index remained broadly flat during early trading on Wednesday, after it closed up 121.49 points or 2.3%, on Tuesday.

Dominic Turner
shareprices.com - Thursday, December 03, 2009

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By 9.00 a.m., the leading share index was down 10.08 points, or 0.2%, at 5,302.09, despite strength across the mining sector as gold hit a new record high.

Spot gold traded at nearly $1,208 an ounce in Tokyo overnight, as weakness in the dollar and continuing worries over Dubai's debt problems sent investors running for cover. Mining stocks were correspondingly strong across the board, but some miners also benefited from broker comments; platinum miner, Lonmin, for example, was up 2.8% after Investec upgraded the stock to "buy" from "neutral", while Vedanta Resources was up 2.8% after a similar upgrade from Goldman Sachs and Eurasian Natural Resources was up 2.3%, helped by a recent upgrade from Credit Suisse.

Share prices in the banking sector, which had rallied well to contribute to sharp gains in the previous session, retreated once again on worries over exposure to Dubai's debt and bonus payments. The Times reported that the Treasury had taken control of the bonus pool at Royal Bank of Scotland (RBS), in which, of course, it already owns a 70% stake; a clash with institutional investors seemed likely, but RBS was not alone in its woes, with Barclays, HSBC, the other part-nationalised lender, Lloyds Banking Group and Standard Chartered all down by between 1.2% and 2.9%. A number of heavyweight stocks, including National Grid, London Stock Exchange (LSE) and AB Foods, also went ex-dividend, creating a further drag on the blue chip index.

 

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