By Michael Taylor
LONDON, Feb 26 (Reuters) - The FTSE 100 <> index of
Britain's leading shares clung on to earlier gains on Tuesday,
despite a surprise fall in retail sales, as results from
Standard Chartered <STAN.L> buoyed banks and financial stocks.
At 1138 GMT the blue-chip index was up 64.7 points, or 1.1
percent at 6,064.2 to extend a near 2 percent rise from the
previous session and puncture the psychologically key 6,000
level.
However, the index slipped slightly midway through the
session after British retail sales unexpectedly fell in February
for the first time in more than a year. []
Banks and financials featured prominently on the upside,
with Alliance & Leicester <ALLL.L> jumping 5.1 percent while
HSBC <HSBA.L> and Royal Bank of Scotland <RBS.L> rose over 3.5
percent.
Persistent consolidation hopes were also providing a fillip
for the sector, traders said.
Aviva <AV.L> and Old Mutual <OML.L> added between 4.2 and
3.9 percent, respectively.
On Monday, U.S. stocks gained more than 1 percent on hopes
that U.S. bond insurers will keep their credit ratings, offering
relief to investors still wary of further bank writedowns.
Standard & Poor's removed its threat to downgrade MBIA's
"AAA" rating, while rival Ambac Financial Group was reported to
be near a deal to shore up its financial position.
"This has been entirely a sentiment move based on perceived
support from banks and rating agencies for the mono-line
insurers," said David Buik of Cantor Index.
"Sentiment is much improved, but can it be sustained? This
credit crisis is a long way from being sorted out and may well
require some positive input from the world's central banks to
get the show back on the road," he added.
It should not be forgotten that volumes this morning are,
not for the first time, utter rubbish."
About 30 percent of the average daily trading volume of the
last 30 days had gone through by 1214 GMT.
British Finance Minister Alistair Darling said in a speech
to a financial audience that the world economy is facing
uncertain times because policymakers can still not be sure about
how deep the current slowdown in the United States will be.
STELLAR STANCHART
But Asia-focused bank Standard Chartered topped the FTSE 100
leaderboard, jumping 6.7 percent after it beat forecasts with a
27 percent rise in 2007 profit and said it was set for another
strong year as Asian markets were well placed to cope with a
U.S. economic downturn. See [].
"Standard Chartered has for some time now been the darling
of the UK banking sector and these sparkling figures will do the
cause no harm whatsoever," said Richard Hunter, head of UK
equities at Hargreaves Lansdown Stockbrokers.
Among other companies reporting, stock in British
housebuilder Persimmon <PSN.L> was up 1.8 percent to extend a
6.6 percent gain from the previous session. But the British
housebuilder said it remained cautious about the year ahead, as
prospective buyers were taking longer to purchase homes. Peer
Taylor Wimpey <TW.L> added 2.3 percent and building products
retailer Wolseley <WOS.L> rose 1.4 percent.
British telecoms group Cable & Wireless <CW.L> tacked on 2.7
percent after a newspaper report that the company is facing
investor pressure to pursue a demerger later this year.
On the downside, shares in Centrica <CNA.L> fell 1.6 percent
after Lehman Brothers downgraded the British energy firm to
"equal weight" from "overweight" and cuts its price target to
390 pence from 400 pence.
Utilities International Power <IPR.L>, United Utilities
<UU.L> and Scottish & Southern Energy <SSE.L> also fell.
ITV <ITV.L> fell 0.6 percent after a newspaper said the BBC
[] is ready to take on BSkyB <BSY.L> and ITV for the right
to broadcast Champions League soccer. Currently, both Sky and
ITV share the rights, the paper said.
U.S. producer price data is due at 1330 GMT.
(Additional reporting by Dominic Lau and Rebekah Curtis)
(Reporting by Michael Taylor; Editing by Erica Billingham)
