By Simon Kennedy, MarketWatch
LONDON (MarketWatch) -- Chip maker ARM Holdings PLC led the FTSE
100 index higher Thursday, with oil giant BP PLC also posting solid
gains, while retail stocks had a mixed day after more warnings over
poor Christmas trading.
The biggest riser in the main index was ARM Holdings , which
jumped 5% after Microsoft Corp. (MSFT) said the next version of its
Windows operating system will support ARM's chips.
The move will help Microsoft compete in the growing market for
tablet PCs, in which ARM has a 95% market share.
Royal Bank of Scotland analyst Didier Scemama said he expects
Microsoft's support for ARM chips will also allow the U.K. company
to build a 15% share in the market for notebook processors by 2014,
from its current level of 0%.
The gains came after the stock rallied nearly 8% on Wednesday on
the back of media reports that Intel Corp. (INTC) could launch a
takeover bid for the group.
Shares in BP (BP) gained 0.6% after the release of an
investigation report by a U.S. presidential commission on the Gulf
of Mexico oil spill.
The report said management failures and flawed risk management
were behind the disaster, but also attributed some of the failures
to contractors Halliburton Co. (HAL) and Transocean Ltd. (RIG).
The gain for the heavyweight stock helped lift the FTSE 100
index 0.1% to 6,047.94.
The index pulled back from stronger gains, however, following a
relatively weak start to U.S. trading and as mining stocks turned
lower.
The weakest performer in the mining sector was Antofagasta PLC ,
which dropped 1.9% after it was downgraded to reduce from buy at
Nomura. The broker said it struggles to see where further gains
could come from as the stock has more than doubled in price since
July.
Retailers had a mixed session. Among smaller stores, shares in
Clinton Cards PLC dropped 11.6% after bad weather over the
Christmas period resulted in a drop in comparable sales. Similarly,
Mothercare said the bad weather would result in its results falling
short of previous expectations, sending the stock down 6.2%.
CD and DVD retailer HMV Group dropped sharply for the second
straight session, falling 6.7% following Wednesday's warning over
weak sales.
On the positive side, clothing retailer Marks & Spencer
Group rose 3.7%, extending its rally since the start of the year as
trading updates from rival clothing retailers have generally been
more positive than those from the rest of the retail sector.
Other movers on the main index included Rolls-Royce Group PLC ,
which rose 1.3% after the aerospace firm said it completed
contracts with British Airways PLC for engines to power 61 new
aircraft. The order, originally announced in September 2007, is
worth over $5 billion at list prices.
Bank stocks were mixed, with Lloyds Banking Group (LYG) dropping
1% and Royal Bank of Scotland Group PLC (RBS) down 0.2%, as they
both underperformed compared to the FTSE index.
Belgium's KBC Group said it will take further provisions on its
Irish loan portfolio due to a deterioration in market conditions
over the last couple of months. Both Lloyds and RBS have
significant Irish loan portfolios.
KBC also said it has identified internal "irregularities" at a
U.K. unit.