By By Sarah Turner
LONDON (Dow Jones)--Shares of fixed-line-telecom operator BT
Group gained in London on Tuesday, with gains in the mining sector
also helping the top index to advance.
Shares of BT Group (BT) rose 4.4% after it was upgraded to
outperform at Credit Suisse.
The broker said that cost-cutting potential at the group remains
underestimated by investors.
"A headcount that looks almost two times too high relative to
European peers suggests much can still be done," the broker
said.
It added that a return to mid-term revenue growth also looks
achievable and that recent fears about pension funding look
overdone, with bond yields having gone up since the start of the
year.
"With bond markets likely to remain open to BT even on a rating
downgrade, we believe the risk of a rights issue is remote," the
broker added.
Overall, the FTSE 100 index closed up 0.5% to 5,042.13 on the
one-year anniversary of the collapse of U.S. investment bank Lehman
Brothers.
Shares trading elsewhere in Europe were also higher. U.S. stocks
hovered around the flat line.
The gains in Europe followed the release of some
better-than-expected U.S. retail sales data.
Miners were firm after the data, with Rio Tinto (RTP) shares up
1.7% and Eurasian Natural Resources up 2.1%.
BG Group shares rose 1.4%. The natural-gas firm and partners
have made a new discovery in the Santos Basin, offshore Brazil.
Banking giant HSBC Holdings climbed 1.4% and U.K. rival Royal
Bank of Scotland rose 1.4%.
Retailers were under some pressure, with department-store
operator Marks & Spencer down 1.6% and home-improvement
retailer Kingfisher down 2.8%.
Outside the top index, shares of department-store retailer
Debenhams fell 4.1%.
"Looking to the new financial year, it will be difficult to
predict consumer behavior," said CEO Rob Templeman.
In the twelve months to Aug. 29, fiscal-year gross transaction
value rose 0.2% compared to the same point a year ago.
The sales increase, a strong gross margin performance, and tight
management of stocks and costs means that pretax profit and
earnings before interest, tax, amortization and depreciation are
expected to be ahead of last year, in line with management's
expectations.
Shares of commercial-television broadcaster ITV declined 5.7%,
also outside the top index.
Britain's antitrust regulator, the Competition Commission, said
Tuesday that it has provisionally decided that
contract-rights-renewal undertakings made by the firm should
stand.
The Commission found that ITV's main channel, ITV1, continues to
have the ability to reach large numbers of viewers and this gives
it a strong bargaining position with media buyers.
Services Desk; Dow Jones Newswires; +44-20-7842-9319/9274