* FTSE 100 up 0.1 percent
* StanChart top riser; Morgan Stanley upgrades
* Vodafone weakens on Bernstein downgrade
* InterContinental falls from highs post results
By Tricia Wright
LONDON, Feb 19 Britain's top shares gained
slightly on Tuesday, led by Standard Chartered which was
upgraded by Morgan Stanley, with traders citing some caution in
the run-up to German sentiment data due later in the day.
The FTSE 100 was up 6.71 points, or 0.1 percent, at
6,324.90 by 0908 GMT, in what is expected to be a relatively
quiet early session following Monday's closure of U.S. markets
for the President's Day holiday.
Germany's ZEW survey, a gauge of investor and analyst
sentiment in Europe's largest economy, due at 1000 GMT, will
fall under the spotlight.
Economists forecast the index to have risen to 35 points
this month from 31.5 in January.
"We... expect a quiet open till we see the ZEW from Germany
that will dictate the trend for today," said Atif Latif,
director of trading at Guardian Stockbrokers.
Latif reckoned the index could dip to recent support, at
6,273, on a number below expectations and, on the flipside, to
climb to 6,367, around recent resistance.
Standard Chartered was the top blue-chip riser,
ahead 2.5 percent. Traders cited a note from Morgan Stanley, in
which it described StanChart as its preferred name among the
UK's Asia-focused banks versus HSBC.
"HSBC looks fairly valued on lower revenue growth
expectations, while an improving Asian macro should reduce asset
quality concerns for STAN, driving a performance reversal," it
said, lifting its rating on the StanChart to "overweight".
HSBC, which Morgan Stanley cut to "equal-weight", shed 0.6
Heavyweight mobile telecoms firm Vodafone fell 2.7
percent, exerting downward pressure on the FTSE 100 to the tune
of nearly 9 points, as Bernstein cut its rating on the stock to
"underperform" highlighting concerns over European operations.
"Vodafone's European operations are in structural decline -
in the over-supplied and commoditised business of European
wireless Vodafone is neither the lowest cost provider nor a
differentiated operator," Bernstein said in a note.
Without structural change but assuming a significant new
cost-cutting programme, the broker expected Vodafone's European
EBITDA excluding Turkey to shrink by 23 percent in the next
InterContinental Hotels (IHG) dropped 2.3 percent
following the publication of its full-year results as investors
bank profit on the company's shares, which were at an all-time
high in the previous session.
IHG, the world's biggest hotelier, posted an 11 percent rise
in 2012 profit, underpinned by a strong U.S. business and
expansion in developing markets, but Investec Securities cut its
rating on the firm to "hold" from "buy" following a 30 percent
rally in its shares over the last three-months.
The rally has propelled IHG's 12-month forward
price-to-earnings rating to around 19.5 times, compared with
U.S. peer Marriott on 20.3 times, and the FTSE 100 on
11.6 times, and 40 percent above its historical average
according to Thomson Reuters data.
(Reporting by Tricia Wright, additional reporting by David
Brett. Editing by Jeremy Gaunt.)