FTSE down as oils and banks weigh, Vodafone buoys

LONDON, Feb 12 (Reuters) The FTSE 100 of Britain's leading shares ended down 0.5 percent on Monday as weaker crude prices and inflationary concerns weighed on oil and banking stocks, while Vodafone supported.

Vodafone climbed 1.3 percent and touched a 15-month high after the company beat rival suitors with an .1 billion bid for a controlling stake in Hutchison Essar, the number four mobile operator in India.

The Hutchison deal will give Vodafone a powerful stake in the world's fastest-growing mobile phone market, helping offset slowing growth in its core European operations.

''It is good news for Vodafone going forward,'' said Jawaid Afsar, a trader at Securequity. ''It's a very large market that they've gone into... the price paid was a lot lower than expected.'' But oil stocks weighed on the market after U.S. crude oil dropped nearly LONDON, Feb 12 (Reuters) The FTSE 100 of Britain's leading shares ended down 0.5 percent on Monday as weaker crude prices and inflationary concerns weighed on oil and banking stocks, while Vodafone supported.

Vodafone climbed 1.3 percent and touched a 15-month high after the company beat rival suitors with an $11.1 billion bid for a controlling stake in Hutchison Essar, the number four mobile operator in India.

The Hutchison deal will give Vodafone a powerful stake in the world's fastest-growing mobile phone market, helping offset slowing growth in its core European operations.

''It is good news for Vodafone going forward,'' said Jawaid Afsar, a trader at Securequity. ''It's a very large market that they've gone into... the price paid was a lot lower than expected.'' But oil stocks weighed on the market after U.S. crude oil dropped nearly $2 to below $59 after leading exporter Saudi Arabia, fellow OPEC member Qatar and OPEC's head of research said the organisation may steer away from further supply cuts at its March 15 meeting.

BP dipped 1.1 percent, Royal Dutch Shell shed 1 percent and Cairn Energy fell 3.3 percent to lead the FTSE 100 losers.

The FTSE 100 ended 29.3 points lower at 6,353.5 and was little affected by UK producer prices data in early session.

The banking sector was hit by interest rate and inflationary concerns after the Bank of England held rates at 5.25 percent last week, and ahead of the release of January's consumer price index data on Tuesday and the BoE's quarterly inflation and growth projections on Wednesday.

HSBC and HBOS both slipped 0.5 percent, Barclays dipped 0.9 percent and Lloyds TSB lost 0.6 percent.

Financials also suffered as investment manager Amvescap shed 1.2 percent and the world's largest listed hedge fund company Man Group dipped 2.6 percent, after market talk on a possible tie-up between the two firms subsided, traders said.

Investors also cited profit-taking ahead of Amvescap's and lender Bradford&Bingley's numbers due on Tuesday, which will kick start the sector's reporting season.

''We've seen the oil majors take a bit of a dive which is hitting the markets quite heavily and the financials have also been hit,'' said Securequity's Afsar.

''The (banks) earning season is right upon us, so a lot of people are waiting to go for the results and see how things pan out.'' ''But with U.S. crude prices down nearly $2 now, that's going to have an impact on the oils and that's the major theme of the market... they are such a huge weighting on the index.'' ROLLS-ROYCE POWERS AHEAD Among individual stocks, Rolls-Royce tacked on 2.8 percent to hit an all-time high after Merrill Lynch and Credit Suisse raised their price target for the aero-engine maker, which was already riding high on upbeat results in the previous week. Traders added that the stock was undervalued.

J. Sainsbury climbed 0.6 percent on continued bid speculation and after former government minister David Sainsbury removed 133.1 million shares in Britain's third biggest supermarket operator from a Sainsbury family trust.

Further on the upside, GlaxoSmithKline climbed 0.7 percent after an earnings forecast upgrade from Merrill Lynch.

On the downside, news and information group Reuters fell 2.6 percent after Citigroup placed 50 million shares in the company at between 428 and 434 pence per share, traders said, raising as much as 217 million pounds ($422.2 million). Citigroup and Reuters declined to comment.

Among mid-caps, shares in package holiday company MyTravel soared 28.6 percent after saying it was to merge with KarstadtQuelle's Thomas Cook.

But First Choice nosedived 13.5 percent as analysts expected the MyTravel-Thomas Cook merger deal to affect its package holiday business.

''It's been a difficult day for the FTSE with the index seemingly stuck in negative territory,'' said Jimmy Yates, a trader at CMC Markets. ''There's been little else on the economic calendar and the corporate agenda has also started the week off in a relatively tame manner.'' REUTERS KR DB2307 to below after leading exporter Saudi Arabia, fellow OPEC member Qatar and OPEC's head of research said the organisation may steer away from further supply cuts at its March 15 meeting.

BP dipped 1.1 percent, Royal Dutch Shell shed 1 percent and Cairn Energy fell 3.3 percent to lead the FTSE 100 losers.

The FTSE 100 ended 29.3 points lower at 6,353.5 and was little affected by UK producer prices data in early session.

The banking sector was hit by interest rate and inflationary concerns after the Bank of England held rates at 5.25 percent last week, and ahead of the release of January's consumer price index data on Tuesday and the BoE's quarterly inflation and growth projections on Wednesday.

HSBC and HBOS both slipped 0.5 percent, Barclays dipped 0.9 percent and Lloyds TSB lost 0.6 percent.

Financials also suffered as investment manager Amvescap shed 1.2 percent and the world's largest listed hedge fund company Man Group dipped 2.6 percent, after market talk on a possible tie-up between the two firms subsided, traders said.

Investors also cited profit-taking ahead of Amvescap's and lender Bradford&Bingley's numbers due on Tuesday, which will kick start the sector's reporting season.

''We've seen the oil majors take a bit of a dive which is hitting the markets quite heavily and the financials have also been hit,'' said Securequity's Afsar.

''The (banks) earning season is right upon us, so a lot of people are waiting to go for the results and see how things pan out.'' ''But with U.S. crude prices down nearly LONDON, Feb 12 (Reuters) The FTSE 100 of Britain's leading shares ended down 0.5 percent on Monday as weaker crude prices and inflationary concerns weighed on oil and banking stocks, while Vodafone supported.

Vodafone climbed 1.3 percent and touched a 15-month high after the company beat rival suitors with an $11.1 billion bid for a controlling stake in Hutchison Essar, the number four mobile operator in India.

The Hutchison deal will give Vodafone a powerful stake in the world's fastest-growing mobile phone market, helping offset slowing growth in its core European operations.

''It is good news for Vodafone going forward,'' said Jawaid Afsar, a trader at Securequity. ''It's a very large market that they've gone into... the price paid was a lot lower than expected.'' But oil stocks weighed on the market after U.S. crude oil dropped nearly $2 to below $59 after leading exporter Saudi Arabia, fellow OPEC member Qatar and OPEC's head of research said the organisation may steer away from further supply cuts at its March 15 meeting.

BP dipped 1.1 percent, Royal Dutch Shell shed 1 percent and Cairn Energy fell 3.3 percent to lead the FTSE 100 losers.

The FTSE 100 ended 29.3 points lower at 6,353.5 and was little affected by UK producer prices data in early session.

The banking sector was hit by interest rate and inflationary concerns after the Bank of England held rates at 5.25 percent last week, and ahead of the release of January's consumer price index data on Tuesday and the BoE's quarterly inflation and growth projections on Wednesday.

HSBC and HBOS both slipped 0.5 percent, Barclays dipped 0.9 percent and Lloyds TSB lost 0.6 percent.

Financials also suffered as investment manager Amvescap shed 1.2 percent and the world's largest listed hedge fund company Man Group dipped 2.6 percent, after market talk on a possible tie-up between the two firms subsided, traders said.

Investors also cited profit-taking ahead of Amvescap's and lender Bradford&Bingley's numbers due on Tuesday, which will kick start the sector's reporting season.

''We've seen the oil majors take a bit of a dive which is hitting the markets quite heavily and the financials have also been hit,'' said Securequity's Afsar.

''The (banks) earning season is right upon us, so a lot of people are waiting to go for the results and see how things pan out.'' ''But with U.S. crude prices down nearly $2 now, that's going to have an impact on the oils and that's the major theme of the market... they are such a huge weighting on the index.'' ROLLS-ROYCE POWERS AHEAD Among individual stocks, Rolls-Royce tacked on 2.8 percent to hit an all-time high after Merrill Lynch and Credit Suisse raised their price target for the aero-engine maker, which was already riding high on upbeat results in the previous week. Traders added that the stock was undervalued.

J. Sainsbury climbed 0.6 percent on continued bid speculation and after former government minister David Sainsbury removed 133.1 million shares in Britain's third biggest supermarket operator from a Sainsbury family trust.

Further on the upside, GlaxoSmithKline climbed 0.7 percent after an earnings forecast upgrade from Merrill Lynch.

On the downside, news and information group Reuters fell 2.6 percent after Citigroup placed 50 million shares in the company at between 428 and 434 pence per share, traders said, raising as much as 217 million pounds ($422.2 million). Citigroup and Reuters declined to comment.

Among mid-caps, shares in package holiday company MyTravel soared 28.6 percent after saying it was to merge with KarstadtQuelle's Thomas Cook.

But First Choice nosedived 13.5 percent as analysts expected the MyTravel-Thomas Cook merger deal to affect its package holiday business.

''It's been a difficult day for the FTSE with the index seemingly stuck in negative territory,'' said Jimmy Yates, a trader at CMC Markets. ''There's been little else on the economic calendar and the corporate agenda has also started the week off in a relatively tame manner.'' REUTERS KR DB2307 now, that's going to have an impact on the oils and that's the major theme of the market... they are such a huge weighting on the index.'' ROLLS-ROYCE POWERS AHEAD Among individual stocks, Rolls-Royce tacked on 2.8 percent to hit an all-time high after Merrill Lynch and Credit Suisse raised their price target for the aero-engine maker, which was already riding high on upbeat results in the previous week. Traders added that the stock was undervalued.

J. Sainsbury climbed 0.6 percent on continued bid speculation and after former government minister David Sainsbury removed 133.1 million shares in Britain's third biggest supermarket operator from a Sainsbury family trust.

Further on the upside, GlaxoSmithKline climbed 0.7 percent after an earnings forecast upgrade from Merrill Lynch.

On the downside, news and information group Reuters fell 2.6 percent after Citigroup placed 50 million shares in the company at between 428 and 434 pence per share, traders said, raising as much as 217 million pounds (2.2 million). Citigroup and Reuters declined to comment.

Among mid-caps, shares in package holiday company MyTravel soared 28.6 percent after saying it was to merge with KarstadtQuelle's Thomas Cook.

But First Choice nosedived 13.5 percent as analysts expected the MyTravel-Thomas Cook merger deal to affect its package holiday business.

''It's been a difficult day for the FTSE with the index seemingly stuck in negative territory,'' said Jimmy Yates, a trader at CMC Markets. ''There's been little else on the economic calendar and the corporate agenda has also started the week off in a relatively tame manner.'' REUTERS KR DB2307