LONDON MARKETS: FTSE 100 Seesaws, But BHP Billiton Outperforms

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- The U.K.'s benchmark edged higher Tuesday, with shares of BHP Billiton PLC outperforming following the mining heavyweight's financial results.

The FTSE 100 was up 0.2% at 6,923.82 after spending much of the session swaying between small losses and gains. The benchmark on Monday (http://www.marketwatch.com/story/hsbc-shares-hit-in-london-trade-pulling-ftse-100-lower-2015-02-23) lost three points after having pushed above its all-time closing high of 6,930.20, hit in December 1999.

Stocks made minor moves during testimony by Bank of England Governor Mark Carney at a Treasury Select Committee in London. Carney, in backing the bank's recent quarterly inflation report, said he expects the level of U.K. inflation to rise back to the government's mandated target of 2%. The pound (GBPUSD) traded at $1.5440 compared with $1.5457 late Monday.

Standing out among equity advancers was BHP Billiton (BHP) . Its stock climbed 4.7% after the miner, the biggest by market value, reported a lower-than-anticipated fall in first-half profit, which was $4.27 billion (http://www.marketwatch.com/story/bhp-profit-falls-as-commodity-prices-slide-2015-02-24). Analysts polled by The Wall Street Journal had expected profit, on average, to come in at $3.59 billion.

"Cost reduction ahead of full-year guidance, strong free cash flows and further rationalisation of capex were all positives," said Barclays analyst Ephrem Ravi in a note, adding that it's maintaining its overweight rating on BHP.

In a move by BHP to "keep shareholders happy the interim dividend was boosted by 5%," said David Madden, market analyst at IG, in a note. "The ability of the company to produce a strong set of numbers during a testing time for the commodities industry is why the market has so much confidence in BHP Billiton." The interim divided would be raised to 62 cents a share.

Also near the top of the benchmark, shares of Mondi PLC popped up 1.7%. The packaging and paper company said it's recommending a 17% increase in its dividend (http://www.marketwatch.com/story/mondi-profit-rises-recommends-dividend-increase-2015-02-24)after a rise in 2014 profit to 471 million euros ($534.6 million), from EUR386 million a year earlier.

Meanwhile, Diageo PLC shares gained 0.7% as Berenberg reinitiated coverage on the beverage maker with a buy rating.

But holding at the lower end of the FTSE was Vodafone PLC , with shares of the mobile-services provider falling 2.6% after a ratings downgrade to underperform from neutral at Bank of America Merilll Lynch.

Shares of Meggitt PLC fell 5.1% as the aerospace, defense and energy group posted a 22% decline in pretax profit to GBP208.9 million (http://www.marketwatch.com/story/meggitt-yearly-profit-falls-2015-02-24), and a 5% revenue decrease to GBP1.55 billion.

GKN PLC shares dropped 3.1% after the engineering firm reported a fall in full- year sales and pretax profit (http://www.marketwatch.com/story/gkn-profit-falls-amid-currency-hit-2015-02-24) due to the impact of currency movements. GKN did say taking out the impact of currency movements, organic sales rose 4%.

Home builder Persimmon PLC posted a 45% rise in 2014 pretax profit to GBP467 million, and a 23% rise in sales to GBP2.57 billion. But shares fell in Tuesday's trade, losing 3.7%. The shares climbed 34% in 2014, and are up 4.6% so far this year.

Persimmon's 2014 results were "solid", wrote Davy equity analyst Colin Sheridan in a note. "However, with current trading likely to be uncertain ahead of the U.K. general election, and few incremental positives from the long-term capital returns program, we see little reason to become more positive on the stock at this time," said Sheridan, reiterating its underperform rating on Persimmon. (http://www.marketwatch.com/story/what-time-does-draghi-speak-on-tuesday-2015-02-24) (http://www.marketwatch.com/story/what-time-does-draghi-speak-on-tuesday-2015-02-24)

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