By Sarah Turner
LONDON (Dow Jones)--London shares lost ground Friday, with most
banks on the defensive after disappointing earnings reports on Wall
Street.
The U.K. FTSE 100 index declined 0.6%, or 32.71 points, to close
at 5,190.24. Other European shares and U.S. stocks were also weak
as investors weighed mixed results from General Electric and a loss
from Bank of America.
Banks were mostly lower in London, with HSBC Holdings (HBC) and
Barclays (BCS) each falling 2%.
Lloyds Banking Group (LYG), however, managed to gain ground,
rising 1.9%.
Deutsche Bank upgraded the firm to buy from hold, saying it
believes there is potential upside for the stock irrespective of
whether the bank enters the government's asset protection scheme or
goes down the route of raising cash from shareholders.
Also, the bank said that it has agreed in principle to sell its
Halifax Estate Agencies business to LSL Property Services for a
pound. In total 1,050 jobs will transfer to LSL and 460 bank staff
will be affected by the counter closures, with 360 full time roles
likely to be lost.
"The decision to sell the estate agency business, which has been
loss making for some time, follows a strategic review undertaken by
the group which concluded that an estate agency operation is no
longer integral to its business model," Lloyds said.
LSL , which had earlier announced it was in talks to strike such
a deal, rose 5.7%.
Meanwhile, most top-index oil and gas sector companies gained
ground on Friday with Royal Dutch Shell (RDSA), up 1.1%, BP (BP),
up 0.6%, Tullow Oil , up 1.8% and Cairn Energy up 1.3%.
The gains came as crude-oil futures traded over $77 a barrel on
Friday as traders bet on rising demand and worried about falling
U.S. gasoline inventories. Oil futures slipped later in the
session.
Outside the top index, shares of National Express dropped 23.1%
after a consortium led by CVC Capital Partners scrapped a 765
million pound ($1.25 billion) bid for the bus and rail
operator.
National Express rival, Stagecoach Group , declined 4.5% after
it said that it is no longer in talks with CVC and the Cosmen
family over acquiring National Express's U.K. bus and rail
operations.
Shares of card retailer Clinton Cards jumped 20.7%. Pretax
profit from continuing operations rose to 24.1 million pounds, from
22 million pounds last year, the firm said.
Services Desk; Dow Jones Newswires; +44-20-7842-9319/9274