* BT gains; cost cuts help it raise guidance
* Pharma stocks in demand; UBS lifts GSK's target
* Energy stocks weaker as crude slips
By Tricia Wright
LONDON, Nov 12 Britain's top share index was
flat early on Thursday, as investors cheered BT Group's (BT.L)
second-quarter results, offsetting weakness in energy stocks and
At 0913 GMT, the FTSE 100 .FTSE was up 0.47 points at
5267.22. The index ended 0.7 percent higher on Wednesday, having
touched an intraday high at a level not seen since September
2008, after a jump in Chinese factory growth and reassuring
signals on the UK economy.
"Investors are still digesting comments from the Bank of
England in its inflation report yesterday, and maybe the figures
we had out of China are still blowing through the market, said
Keith Bowman, analyst at Hargreaves Lansdown.
"BT's figures have been well received, certainly at the top
end of expectations, and I think that's aiding sentiment as
well," he said.
Telecoms notched up good gains in the wake of BT Group's
second-quarter results. BT added 3.8 percent, while Cable &
Wireless CW.L rose 1.6 percent.
BT increased its revenue and dividend forecast for the full
year after stringent cost cuts helped the former telecoms
monopoly to beat second quarter core earnings expectations.
Drug stocks found favour, as investors' appetite for risk
ebbed and flowed. GlaxoSmithKline (GSK.L) rose 1.2 percent,
helped by a target price hike from UBS, and with Barclays
Capital initiating coverage on the firm with an "equal-weight"
AstraZeneca (AZN.L), which Barclays also started as
"equal-weight", put on 0.6 percent. The same broker started the
European pharma sector with a "neutral" rating.
British Airways BAY.L rose 2 percent after Britain's Sky
News reported that BA and Spanish airline Iberia IBLA.MC could
announce a merger agreement as early as this week, citing
unidentified sources. [ID:nLC394135]
Strength was seen among banks, in the wake of the previous
session's gains which were aided by the upbeat UK economic news.
Lloyds Banking Group (LLOY.L) rose 1.1 percent and Standard
Chartered (STAN.L) was 0.2 percent firmer.
Barclays (BARC.L), up 1 percent, rebounded from falls seen
since its third-quarter trading update on Tuesday, as Morgan
Stanley and ING both lifted their price targets for the firm.
Energy stocks were under pressure as the crude price CLc1
dipped 0.1 percent, with BG Group BG.L, BP (BP.L) and Royal
Dutch Shell (RDSa.L) falling 0.3 to 0.5 percent.
Miners were out of favour, reversing Wednesday's advance
which was underpinned by the Chinese economic data, with
Fresnillo (FRES.L), BHP Billiton (BLT.L), Rio Tinto (RIO.L) and
Xstrata XTA.L dropping 0.1 to 0.9 percent.
Eurasian Natural Resources ENRC.L fell 0.3 percent after
releasing third-quarter output numbers. [ID:nLC367843]
Among individual movers, 3i Group (III.L) shed 3.7 percent
in the wake of its first-half results. The British private
equity firm said asset values increased just 2 percent in the
first half of its financial year as the real economy failed to
keep up with rebounding stock markets. [ID:nLB267369]
Investors' attention will be drawn across the Atlantic later
in the day, to U.S. weekly jobless claims, due at 1330 GMT.
(Editing by Hans Peters)