MIDDAY REPORT: Headline shares ended the day slightly lower as late weakness in the mining sector took its toll, offsetting strong gains in banking issues and a stellar performance from defence contractor BAE Systems.
At midday, the FTSE100 was down 10.11 points at 5,782.08 with the FTSE250 ahead 30.63 points at 11,811.05 and the FTSE Smallcaps 3 points higher at 3,177.82.
US stocks were modestly higher in late morning trade as investors welcomed news the German court gave the green light to backing the Eurozone rescue fund.
Approaching the close in London, the Dow Jones Industrial Average was up 34 points at 13,357, the S&P500 gained 3 points at 1,437 and the Nasdaq Composite rose 3 points at 3,108.
Investors reacted positively to the German Constitutional Court giving the green light to support of the ESM. A reversal in the fortunes of miners dragged the main index lower in the afternoon.
Banking shares were prominent amongst the gainers, with Royal Bank of Scotland ahead 10p at 274.7p on continued chatter involving the flotation of Direct Line. Lloyds was up 1.44p at 38.51p and Barclays 3.5p better at 217p.
Commercial software specialist Sage Group rose 9.5p at 315.3p, on renewed M&A chatter, with SAP in the frame.
Defence contractor BAE Systems jumped to the top of the leaderboard, ahead 34.9p at 363.6p, after strong support at UBS which reiterated its buy advice on the basis of Middle East prospects.
Telecoms giant BT Group advanced 8.7p at 235.2p on announcing a £152m deal with Premiership Rugby giving it exclusive rights for four years.
DIY retail specialist Kingfisher rose 2.7p at 275p, despite reporting sales for the half-year to 28th July down 3.3% at £5.478bn, with adjusted pretax profits down 15.5% to £371m. However, interim dividend was raised 25.1% to 3.09p.
Frock shop chain Next ticked up 19p at 3,579p ahead of tomorrow's interim results.
On the downside with blue chips, mining stocks turned lower in the afternoon session on demand concerns, with Anglo American the weakest link, down 53.5p at 1,901.5p. Xstrata slipped 17.9p at 993.6p and BHP Billiton lost 8p at 1,911p.
Randgold Resources and Fresnillo reversed early gains as precious metals prices eased, down 120p at 6,830p and 23p at 1,684p, respectively.
Oil producers lost group as an unexpected jump in US inventories threatened crude prices. Shell fell 7.5p at 2,292p and BP dropped 2p at 441p.
Builders' merchant Wolseley slipped 21p at 2,664p after a downgrade from buy to neutral at UBS. Rival CRH improved 26p at 1,236p in response.
Mobile phone giant Vodafone edged down 2.65p at 174p on concerns over dividends from Verizon Wireless and as Nomura downgraded the stock from buy to neutral and trimmed its target price from 225p to 195p.
Luxury fashion retailer Burberry continued to suffer, down a further 16p at 1,072p following on from yesterday's heavy falls after a profits warning.
However, asset manager Hargreaves Lansdown took the wooden spoon, dropping 24p at 630p, while car insurance specialist Admiral reversed 28p at 1,091p.
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