London: Britain’s top share index was little changed in mid-session trade on Monday, with stronger miners offsetting weak energy issues as investors awaited US data for more clues on the outlook for the global economy.
At 1109 GMT, the FTSE 100 was up 3.02 points, or 0.1% higher, at 4991.72 after ending on Friday at a near three-week closing low below the 5,000 level, down 59.11 points at 4,988.70.
“The key for today’s session will be this afternoon’s ISM non manufacturing data and this will help dictate whether investors start to build on positions or if equities will sell off further,” said Nicola Poskitt, a market analyst at City Index.
The September Institute for Supply Management non-manufacturing index, which measures activity within the service sector, is expected to show a reading of 49.9 from 48.4 in August when it is released at 1400 GMT.
The FTSE 100 lost 1.8% last week, with investor nerves setting in as weaker data, including worse-than-expected non-farm payrolls data, increased concerns that a 44% rise since a trough in March may be overdone.
Miners were the top gainers, supported by slightly firmer copper prices thanks to an easier dollar and by some positive broker comment.
Antofagasta, Eurasian Natural Resources, Rio Tinto and Vedanta Resources rose 2.6 to 3.9% after RBS upgraded its outlook for metals prices and its ratings for the four firms to “buy”. It added that it expected sovereign wealth funds to be the next “predators” in the sector.
The broker said that as the recovery process gets underway, mining assets could fall under China’s radar as the country looks to broaden its overseas direct investment in mining by between $8 billion and $25 billion over the next five years.
Data provided tentative evidence that economic recovery in the United Kindgom is gaining pace.
Britain’s service sector expanded at its fastest pace for two years in September and firms were more optimistic about the next 12 months than at any time since April 2007, purchasing managers’ data showed.
Although the news failed to impact the FTSE significantly, the announcement saw sterling pare losses against the euro.
Banks were mixed by, with Royal Bank of Scotland (RBS) rallying 3.7% following Friday’s sell-off, traders said.
RBS was set to meet investors this week to tie up the details of a £4 billion share placement as its negotiations with the Treasury about joining the toxic loans insurance programme intensify, The Daily Telegraph newspaper said.
Britain’s financial watchdog on Monday published its final set of rules that will force banks to hold minimum levels of liquidity to ride out market storms, but they will not take full effect until economic recovery is assured.
Lloyds Banking Group and Standard Chartered added 1.1 to 0.2% each, while Barclays and HSBC fell 0.9% and 0.4%, respectively.
Barclays is set to enter exclusive talks with insurer Standard Life to negotiate a £250 million deal to purchase its banking division, the Mail on Sunday paper said.
RSA Insurance gained 4%. The Sunday Telegraph said that after unsuccessfully searching the markets for takeover targets, RSA has abandoned plans to raise $1 billion in a rights issue.
The shares were also helped higher by a note from analysts at Cazenove, which reiterated their “outperform” rating on the stock, arguing RSA’s valuation was undemanding.
Life insurer Aviva shed 1.9% after confirming its intention hold an initial public offering for its Dutch insurance business Delta Lloyd in November.
The UK firm is looking to raise up to €1.6 billion from the flotation, according to two people close to the matter.
Oil majors were the major drag on blue-chip sentiment as crude prices fell back below $70, with BP, Royal Dutch Shell and Tullow Oil shedding 0.5 to 1.1%.
Among individual stocks, Tesco dipped 1%, ahead of its first-half results, which will be released on Tuesday, with Evolution Securities initiating its coverage with a “reduce” rating.
Sainsbury’s is due to give a trading update on Wednesday.