By Dominic Lau and Atul Prakash
LONDON, June 6 (Reuters) - Britain's blue chip index ticked
up 0.1 percent by midday on Friday as commodity stocks tracked
oil and metal prices higher but Royal Bank of Scotland <RBS.L>
led banks down as its huge rights issue closed.
By 1037 GMT, the FTSE 100 <> was up 7.1 points at
6,002.4, well off its day's high of 6,074.5 but still holding
its grip on the psychological 6,000 mark. The UK benchmark index
gained 0.4 percent on Thursday.
"A lot of mining stocks are higher this morning...that's
really the key fundamental behind higher equities generally. But
I don't think this position is sustainable," said Neil Parker,
market strategist at Royal Bank of Scotland.
"The equity markets are probably going to have a rough time
over the next few weeks as the speculation regarding a rate hike
intensifies," Parker said, referring to the European Central
Bank's comment on Thursday that it may raise interest rates as
early as July.
All eyes are on the U.S. non-farm payroll data for May, due
at 1230 GMT. A Reuters poll showed a median forecast of a
decline of 58,000 jobs last month, compared with a contraction
of 20,000 in April.
Among prominent losers, Royal Bank of Scotland shed 1.8
percent, giving up earlier gains, as the deadline for its rights
issue expired. Traders cited market talk of a 95 percent take-up
of the issue.
"Those who have speculated that the rights issue will be a
success are taking their money off the table -- you never go
broke on a profit," said David Buik of Cantor Index.
Elsewhere in the banking sector, Lloyds TSB <LLOY.L>,
Alliance & Leicester <ALLL.L>, HSBC <HSBA.L>, Barclays <BARC.L>
and Standard Chartered <STAN.L> slipped between 0.2 and 3.7
percent.
SLICK OILS, SHINING MINERS
Oil shares, however, tracked firmer crude prices <CLc1>,
which headed back up towards $130 a barrel as the dollar
weakened against the euro on signals the European Central Bank
may raise interest rates this year.
BP <BP.L> gained 1.6 percent, Royal Dutch Shell <RDSa.L>
advanced 2 percent, Cairn Energy <CNE.L> climbed 4 percent and
gas producer BG Group <BG.L> put on 2.9 percent.
Stronger metal prices also boosted miners, with BHP Billiton
<BLT.L>, Rio Tinto <RIO.L>, Anglo American <AAL.L>, Xstrata
<XTA.L>, Kazakhmys <KAZ.L>, Lonmin <LMI.L> and Antofagasta
<ANTO.L> all up between 0.7 and 2.9 percent.
"The interesting thing about this market is that the FTSE
100 has not really wanted to give up much ground below 6,000.
Also, it is not been much prepared to go above 6,000. 6,000
seems to a comfortable trading level for it," said Mike Lenhoff,
chief market strategist at Brewin Dolphin.
"If the non-farm payrolls are not worse than expected, if
they come in like a lot of the American data -- better than
expected -- then we obviously are going to go higher."
Scottish & Southern Energy <SSE.L> rose 3.7 percent, placing
it among the top gainers on the index, after Morgan Stanley
upgraded the stock to "overweight" from "equal weight".
Mobile phone retailer Carphone Warehouse <CPW.L> advanced
2.3 percent after Merrill Lynch added the stock to its "most
preferred telecoms list".
British Airways <BAY.L> topped the losers' list, down 5.3
percent on stronger oil prices and after rising 11 percent in
the previous three sessions. Cruise operator Carnival <CCL.L>
was also hurt by firmer crude prices, down 1.9 percent.
Also on the downside, Standard Life <SL.L> lost 4.2 percent
after Deutsche Bank downgraded the insurer to "sell" from
"hold".
(Additional reporting by Michael Taylor; Editing by David
Cowell)
