London market falls flat on weak banks

 

Leading UK shares were flat today, with weak banks outweighing steady telecoms, while computer services company Logica bounced five per cent on talk it may spin off its messaging business.

One analyst said Logica's 12-1/2 pence climb to 234-1/4 pence was largely on speculation it might want to unload the mobile messaging unit, where trading has deteriorated prompting a recent profit warning. Others said the shares have been volatile since a May 10th profit warning and were due a bounce.

By midday the FTSE was down 6.5 points to 5,211.5, bedding back down into the middle of its long term 5,000-5,400 range and waiting for renewed impetus after last week's gains which put about 50 points onto the index.

Market watchers said the most likely stimulus for another leg higher in UK markets would be corporate earnings responding to the slowly improving economic environment, while a few recent signs were giving grounds for hope.

Weaker US stock index futures proved a drag on blue chips which saw 55 FTSE shares rise and 39 fall. Overall market volume was a light 700 million shares.