By Simon Kennedy
LONDON (MarketWatch) -- Britain's benchmark stock index finished
lower Wednesday, while Lloyds Banking Group rose after appointing a
new chief executive.
The FTSE 100 index dropped 0.2% to 5,748.97 after rising 1.1% in
the previous session.
After the London market closes, the U.S. Federal Reserve is
expected to announce a new round of quantitative easing.
Shares of Lloyds Banking Group (LYG) rallied 2.7% after the bank
announced that Antonio Horta-Osorio will become its new chief
executive on March 1.
Horta-Osorio is currently head of Banco Santander's (STD) U.K.
operations. He will take the Lloyds helm from Eric Daniels, who had
previously announced plans to retire.
The gain followed a sharp drop for Lloyds in the previous
session, when a trading update that gave little in the way of hard
numbers disappointed some investors.
Also in the financial sector, shares of Standard Chartered PLC
advanced 2.1%.
Admiral Group PLC gained 2.6% after the insurance firm reported
that its third-quarter turnover surged more than 50% from the
year-earlier period to £446 million. The company added that
it's on track to meet full-year profit estimates.
On the negative side, shares of aerospace and defense firm
Cobham PLC tumbled 9.5%. Cobham said it is continuing to experience
delays and deferrals in the award of some U.S. defense and security
contracts.
"Given the uncertainty over growth in the fourth quarter, the
board recognizes that the group could make only limited underlying
progress in the full year," the firm said.
Jonathan Jackson, head of equities at Killik & Co., said,
however, that he remains positive on the stock.
"While we appreciate that the market is unlikely to give the
company the benefit of the doubt until there is further evidence of
a pickup in the rate of growth, we would use today's fall as an
opportunity to buy the shares," Jackson said.
He said the current valuation doesn't reflect the long-term
fundamentals of the industry, and, perhaps more importantly, Cobham
could become the subject of takeover speculation in a consolidating
industry.
Also in the sector, shares of BAE Systems PLC fell 2.9%.
Shares of the London Stock Exchange finished flat after falling
earlier in the session. Late Tuesday, the exchange operator said
that human error was to blame for a nearly two-hour trading
disruption on the Turquoise platform that took place yesterday
morning.
Preliminary investigations indicate that this human error may
have occurred in "suspicious circumstances," and a full internal
investigation has now begun, it added.
The exchange said that in light of the incident, it would delay
plans to migrate the electronic trading system used by its many
markets on to the technology used by Turquoise.
Other decliners in London included miner Antofagasta which
dropped 4.4% after reporting rising costs in its production
update.