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03.02.2009 Business & Finance

UK stocks swing up and down but Vodafone rises

By Bloomberg
UK stocks swing up and down but Vodafone rises

U.K. stocks swung between gains and losses as a rally in Vodafone Group Plc was offset by sell off in oil companies after BP Plc reported its first quarterly loss in seven years.

Vodafone rose more than 6 percent after the world's largest mobile-phone company posted third-quarter sales that topped analysts' estimates. BP declined 3 percent after reporting a loss of $3.3 billion as the global recession spurred a record plunge in crude prices. Vedanta Resources Plc climbed as Goldman Sachs Group Inc. upgraded the copper producer.

The benchmark FTSE 100 index rose 11.91, or 0.3 percent, to 4,089.69 at 9:06 a.m. in London. The measure earlier fell as much as 0.2 percent. The broader FTSE All-Share Index increased 0.3 percent, while Ireland's ISEQ Index added 1.2 percent.

Vodafone, which accounts for than 7 percent of the benchmark index by market weighting, added 7.75 pence to 135.9 pence. The company posted a 14 percent rise in third-quarter sales to 10.47 billion pounds ($14.9 billion) as the pound slid and revenue increased in India. The average of six analysts surveyed by Bloomberg News was 10.29 billion pounds.

BP, which accounts for more than 8 percent of the FTSE 100 by market weighting, fell 3.5 percent to 467.75. Europe's second- largest oil company reported a loss of 18 cents a share compared with a net income of 23 cents a year earlier. Excluding one-time items and gains or losses from inventories, earnings missed analyst estimates.

Tullow Oil Plc, the U.K. explorer seeking funds for projects in Ghana and Uganda, lost 1.7 percent to 652 pence. Cairn Energy Plc, the oil and gas explorer in India, fell 1.1 percent to 1,734 pence.

Vedanta Resources increased 2.3 percent to 555.5 pence. Goldman Sachs upgraded the largest copper producer in India to “neutral” from “sell” because the shares already reflect concern about the company's spending plans.

“The market is now discounting much of the risk we see attached to the company's investment program,” London-based analyst Peter Mallin-Jones wrote in a research note.

Royal Bank of Scotland Group Plc gained 3.4 percent to 21.1 pence. The lender facing the biggest loss in British history was raised to “overweight” from “neutral” at HSBC Holdings Plc, which said the risk of immediate nationalization has been removed.

Measures announced recently “confirm that the government does not want to fully nationalize U.K. banks,” HSBC said in a note to clients.

Source: Bloomberg