FTSE finishes flat despite late rally

Investors concerned over the long-term impact of Libyan violence shied away from risky stocks and left the FTSE flat today.

Aside from a brief rally mid-morning when Kuwait's oil minister said OPEC was considering boosting production, the FTSE 100 spent much of the day declining. However, a brief rally at the end of the day gave it strength to close up 0.02 per cent at 5,974.76.

Defensive stocks gave the index most support, with BT Group closing up 3.97 per cent at 191.1p, Vodafone up 1.76 per cent to close at 181.85p, and British American Tobacco up 1.56 per cent to 2,507p.

“The telecoms sector is looking good on the back of broker upgrades from Morgan Stanley for BT Group and Vodafone with the ratings moved to ‘overweight’,” said Michael Hewson, market analyst at CMC Markets

HSBC added 1.99 per cent to close at 670.6p, as traders said reports that it may be mulling a move to Hong Kong were positive as it would lead to lower costs.

And insurer Old Mutual gained 3.3 per cent after it beat expectations with a 14 per cent profit rise and said could deliver more as it progresses with its three-year strategy to simplify its structure.

Prudential also gained 1.93 per cent to end at 714p, ahead of its results tomorrow morning.

Miners were a downward pressure, though, with Randgold Resources finishing down 8.2 per cent at 4,480p and African Barrick Gold ending 3.61 per cent lower at 547.5p.

Hewson said Randgold’s fall was “more than likely due to the unrest in the Ivory Coast, which looks set to exacerbate problems in its operations there.”

“Sliding copper prices have seen the miners fall back with Chilean copper miner Antofagasta leading the miners lower despite reporting record profits,” he added.

Scottish engineering firm Weir Group fell 4.72 per cent to close at 1,695p as investors took profits despite it announcing a 58 per cent increase in its full-year pre-tax profit, on fears that industrial stocks may be past their peak.

On the FTSE 250, betting group Betfair closed up 7.61 per cent at 955p after reporting third-quarter revenue growth and saying it was confident of delivering results in line with estimates.

Plant hire company Ashtead also said it expects to beat market expectations and closed up 8.95 per cent at 203.2p.

But television set-top box maker Pace lost 20 per cent of its value to close at 176.4p after reducing its sales forecasts after a key US customer delayed its order.

“The news weighed on sentiment despite an upbeat outlook for the company and shares quickly traded to its lowest level since the end of January,” said Joshua Raymond, market strategist at City Index.