FTSE flat as poor corporate results overshadow positive news on GDP

BRITAIN’S top share index was fractionally higher yesterday as gains by banks on strong UK GDP figures were countered by some mixed corporate earnings.

Banks added 0.8 per cent on news that Britain pulled out of recession in the third quarter, with its strongest quarterly economic growth in five years, boosting expectations that lending conditions will improve. “This is only a single figure, and does not signal the start of sustained recovery,” cautioned Jeremy Whitley, manager of Dunedin Income Growth Investment Trust.

At the close, the FTSE 100 index was up 0.27 points, or 0.01 per cent at 5,805.05 points, having added 0.1 per cent on Tuesday to snap a three-session losing streak.

While the economy returned to growth, the third-quarter corporate earnings season maintained a mixed picture.

WPP shed 2.3 per cent after the world’s largest advertising group cut its full-year outlook for the second time in two months in a third-quarter trading update.

Trading volume in WPP was more than double its 90-day daily average, at 254 per cent, while volume for the FTSE 100 index was 90 per cent of its average.

Consumer products giant Unilever, however, added 2.9 per cent after beating market expectations with a 5.9 per cent rise in underlying sales in the third quarter.

And cruises operator Carnival was the top blue chip gainer, up 3.0 per cent, as its peer Royal Caribbean Cruises posted lower quarterly earnings but raised its full-year forecast, saying bookings have been stronger than expected and it has been able to charge more per cruise.