By Bate Felix
LONDON, May 30 (Reuters) - Britain's blue chip index was
flat at midday on Friday, as falling crude prices dragged down
oil and mining stocks but lifted British Airways <BAY.L>, while
banks and telecoms provided support.
By 1101 GMT, the FTSE 100 <> was up 4.2 points or 0.07
percent at 6072.3 points. The UK benchmark index is down about
0.2 percent for the month, and is down 6 percent for the year.
Crude <CLc1> fell more than $1 to around $125 a barrel,
extending a steep fall from the previous session.
"I think the key there is the fact that oil prices have come
off. We had a big one day move in oil prices, the WTI was down
3.4 percent, the biggest downward move we have had in some
time," said Rob Griffins strategist at Cazenove.
Griffins said worries over a possible oil market correction
was driving the market, weighing on oil and mining stocks, but
providing relief to airlines.
"There is a sense that the oil situation is reaching almost
bubble-like proportions, and I think people are quite worried
that it could correct," he said.
British Airways <BAY.L> was the top gainer on the FTSE 100,
up 6.98 percent. The carrier announced on Thursday it would hike
the fuel surcharge on its tickets. Budget airline easyJet
<EZJ.L> gained nearly 5 percent.
Financials led by Alliance & Leicester <ALLL.> were also
among the top gainers. The mortgage lender was up 5.4 percent.
Europe's biggest bank HSBC <HSBA.L> was up 1.3 percent. The
bank said it was difficult to determine the outlook for 2008
given the worst turmoil in a generation, but added its key Asian
markets were likely to continue to show "reasonable growth".
Friends Provident <FP.L> added 4.2 percent, Standard Life
<SL.L> edged up 3.6 percent, Barclays <BARC.L> and Lloyds TSB
<LLOY.L> were up above 3 percent.
"Since the Royal Bank of Scotland's rights issue
announcement the financial sector has been underperforming even
though the market knows their intentions, that has to come to a
end sometime," said a London-based trader.
Investors will also be keeping a keen eye on a slew of U.S.
economic data, including personal consumption expenditure for
April, Chicago PMI for May and the University of Michigan
sentiment report, due later in the day for further clues on the
state of the U.S. economy.
Defensive stocks were also in demand, with Vodafone <VOD.L>
and GlaxoSmithKline <GSK.L> both up above 1 percent.
BG Group <BG.L> was among FTSE 100 top losers, giving up 3.4
percent after Australia's Origin Energy <ORG.AX> rejected a $13
billion bid from the UK gas producer.
Oil majors BP <BP.L> and Royal Dutch Shell <RDSa.L> both
gave up 1.6 percent.
Heavyweight miners BHP Billiton <BLT.L> was down 2.3
percent, Anglo American <AAL.L> slid 1.7 percent and Rio <RIO.L>
slipped 0.8 percent as gold followed oil's lead south.
(Editing by Sue Thomas)
