By Simon Kennedy
LONDON (MarketWatch) -- British stocks held steady Wednesday as
investors nervously watched the situation in Ireland and as the
Bank of England revealed that its rate-setting committee remained
split over the direction of monetary policy.
The FTSE 100 index rose less than 0.1% to 5,683.01, while other
European markets moved modestly higher after euro-zone finance
ministers said officials from the European Central Bank and
International Monetary Fund would consult with Ireland about the
country's debt crisis.
Worries over Ireland, along with fears of a possible rate hike
in China, knocked about 2.4% off the U.K.'s benchmark index in the
previous session.
U.K. Chancellor of the Exchequer George Osborne said Wednesday
that the country "stands ready" to participate in a bailout of
Ireland. Osborne said contributing to a bailout would help ensure
the stability of the banking system. .
Shares of Royal Bank of Scotland (RBS), the U.K. bank seen as
having the most exposure to Ireland, rose 1.8%, while other banking
stocks were mixed.
In other economic news, the Bank of England said its
rate-setting committee was split three ways at the most recent
meeting in November.
One member called for an increase in the size of the central
bank's asset-repurchase program, while another wanted policy to be
tightened with a quarter-point rate hike. The other seven members
voted to leave rates and the quantitative-easing program
unchanged.
Among shares on the move, Experian (EXPGY) was the biggest
gainer on the main index, climbing 6.2% after the company reported
a 5.6% rise in fiscal first-half profit and lifted its dividend by
29%.
Deutsche Bank analyst Andy Chu said organic growth in the second
quarter was significantly ahead of market expectations and that the
U.S. credit-services business grew for the first time since the
September quarter of 2008.
Drug company GlaxoSmithKline PLC (GSK) was another strong
performer. The firm's stock rose 1.5% after an advisory panel
recommended that the U.S. Food and Drug Administration approve
Benlysta, a lupus drug developed by Glaxo and Human Genome Sciences
Inc. (HGSI).
Collins Stewart analyst Emmanuel Papadakis said the
recommendation "should herald the start of a new phase for the
company, with a solid and sustainable midterm outlook" and noted
that several other trials and potential drug approvals in the
coming year could further boost the company's outlook.
On the downside, shares of Centrica PLC dropped 1% after a
trading update. The gas utility said operating profit for the year
should be slightly ahead of the consensus forecast, but added that
this would be offset by higher-than-expected interest and tax
charges.
Mining stocks were mostly lower. Vedanta Resources dropped 1.8%,
and African Barrick Gold fell 2.5% as gold prices edged lower.
Also weighing on the main index, several large-cap stocks
declined as they went ex-dividend, meaning they passed the date at
which new shareholders would be eligible to receive a dividend
payout.
Marks & Spencer fell 1.6%, and Vodafone Group (VOD) dropped
0.7%.
Outside the main index, shares in Northern Foods PLC and
Ireland's Greencore Group jumped 24% and 29%, respectively, after
the pair agreed to merge.
Shareholders in each of the two convenience-food companies will
hold about 50% of the combined business, which will be rebranded as
Essenta Foods. Within three years, the merger will also cut costs
by around 40 million pounds ($64 million) a year, the companies
said.
Hedge-fund manager Man Group PLC also showed weakness, dropping
1.5% after reporting that the net asset value of its flagship AHL
fund had fallen 4.1% over the course of a week.