By Michael Taylor
LONDON, Jan 10 (Reuters) - Britain's top share index trimmed
earlier gains on Thursday ahead of interest rate decisions from
the Bank of England and the European Central Bank, while J
Sainsbury <SBRY.L> boosted retailers.
At 1049 GMT the FTSE 100 <> was up 12.4 points at
6,285.1.
Despite lingering concerns over the health of the U.S.
economy -- which helped lower UK stocks by 1.3 percent in the
previous session -- investors looked to expected decisions on
borrowing costs from both the Bank of England (BoE) and the
European Central Bank (ECB) due at 1200 GMT and 1245 GMT,
respectively.
The balance of expectations has swung marginally in favour
of a 25 basis point cut from the BoE to 5.25 percent.
The European Central Bank is widely expected to keep rates
on hold at 4 percent.
"A positive trading session in the U.S. yesterday has so far
failed to buoy the UK market this morning as investors await the
result of today's base rate decisions from the BoE and also the
ECB," said Nathan Miller, a trader at CMC Markets.
Among leading shares, Sainsbury topped the FTSE 100
leaderboard and added 7.1 percent after it met analyst
expectations and reported like-for-like sales excluding fuel
rose 3.7 percent in the third quarter.
The results were in contrast to Marks & Spencer <MKS.L>,
which suffered its biggest-ever fall on Wednesday after
reporting its worst quarter in two years, hitting retail stocks
and heightening fears over an economic slowdown. M&S was up 1.1
percent on Thursday.
Among other retailers aided by positive Sainsbury sentiment,
Kingfisher <KGF.L> gained 4.1 percent, Tesco <TSCO.L> was 0.8
percent higher and Wm Morrison Supermarkets <MRW.L> tacked on
1.9 percent.
The latter strengthened its position in the UK grocery
market during the Christmas trading period, according to the
latest figures from research group TNS. []
"While the economy is crying out for a cut, inflation is
above target and heading higher, and sterling continues to
weaken," said David Scott, a senior stockbroker at
Redmayne-Bentley.
"After having lost so much credibility in the eyes of
international investors with Northern Rock, they have to steady
the ship a bit," he said, referring to the BoE.
TAKEOVER BREWING
Scottish & Newcastle <SCTN.L> gained 1 percent after
Carlsberg <CARLb.CO> said it and Heineken <HEIN.AS> will not
make an offer for the British brewer without a recommendation
from British brewer's board.
Scottish & Newcastle said it had rejected a revised bid from
Carlsberg and Heineken at 780 pence a share, or 7.6 billion
pounds, but added it would be willing to talk at 800p.
Previously, Carlsberg and Heineken had offered 750p in cash,
or 7.3 billion pounds.
Also on the upside, housebuilder Persimmon <PSN.L> climbed 4
percent despite UBS cutting its price target to 700 pence from
779 pence, as traders said the stock had been oversold in recent
sessions and following its results on Wednesday.
Positive expectations ahead of the central banks' rate
decisions was also pushing the stock, traders added.
Insurer Legal & General <LGEN.L> was 1.6 percent higher as
it said its UK life and pensions sales rose 8 percent in 2007
while protection and annuities rose 4 percent, helped by a
record fourth-quarter for bulk-purchase annuities. []
Aviva <AV.L> gained 2.5 percent.
On the downside, Man Group <EMG.L> slid 3 percent after it
said that funds under management were $71.7 billion, up from
$68.6 billion.
In commodities, oil held steady, as a rise in U.S. fuel
stocks countered a fall in crude, while fears over supply
disruptions in the Middle East and Nigeria were balanced by the
dim outlook for the U.S. economy, the world's largest. BP <BP.L>
slipped 1.4 percent and rival Shell <RDSa.L> lost 1.7 percent.
(Additional reporting by Dominic Lau)
(Reporting by Michael Taylor; Editing by Jason Neely)
