The FTSE 100 Index is down 9 points at 5,866.9 points this morning as losses for mobile phone giant Vodafone and mining stocks outweigh a jump for Royal Bank of Scotland.
RBS has announced profits which beat expectations and said it would buy back shares worth up to £1bn this year. Its shares have risen 3.07% to 1,916p, topping the blue-chip leaderboard.
British American Tobacco has also pleased investors as 2005 earnings from the cigarette maker came in near the top of analyst expectations. The shares have risen 2.56% to 1,362p.
Meanwhile, Vodafone has accounted for much of the pressure on the index, falling 2.20% to 111.25p as several analysts responded to the company's forecast of slowing revenue growth and lower margins by cutting estimates and target prices.
Miners including Rio Tinto and BHP Billiton are also weighing on the market as they track losses in Australia. Rio Tinto is down 1.88% at 2,711p and BHP Billiton has fallen 1.38% to 964p.
News and information group Reuters has slipped 3.14% to 385.50o as investment bank Credit Suisse cut the stock to "neutral".
In Japan, the Nikkei 225 Stock Average added 12.48 points, or 0.1%, to 16,205.43 points after a report showed factory production climbed to a record, adding to evidence growth in the world's second-biggest economy is gathering pace.
Mitsubishi UFJ, Japan's largest lender by assets, advanced 50,000 yen, or 2.9%, to 1.75m. The stock gained after NHK Television said the bank will pay back 300bn yen ($2.6bn) in public money.
Millea Holdings, Japan's largest non-life insurer, gained 40,000 yen, or 1.7%, to 2.39m and Sompo Japan Insurance, Japan's third-biggest non-life insurer, added 34 yen, or 2%, to 1,699.
Japan Tobacco jumped 12,000 yen, or 6.4%, to 2m. The company said it will conduct a 5-for-1 stock split, making the stock more affordable.
Paper companies also advanced after Mitsubishi UFJ Securities raised its earnings estimate for the companies on rising linerboard and cardboard product prices.
Oji Paper advanced 29 yen, or 3.7%, to 806 and Nippon Paper Group rose 12,000 yen, or 2.3%, to 538,000.
But Sony declined 110 yen, or 2%, to 5,530. Goldman Sachs identified Sony as among the companies to benefit the most from a strong dollar. A 1-yen change against the dollar affects Sony's annual operating profit by 6.5bn yen, according to Goldman.
Honda fell 100 yen, or 1.4%, to 6,900. Annual operating profit at Japan's third-largest automaker drops about 12bn yen for every 1 yen Japan's currency strengthens against the dollar, according to an estimate by Merrill Lynch.
The yen yesterday strengthened to 116.10 against the dollar after Prime Minister Junichiro Koizumi said the central bank should decide when to cut the amount of cash pumped into the economy, a precursor to raising interest rates.
In the US, the Dow Jones industrial average was up 35.70 points, or 0.32%, at 11,097.55 points as a steep fall in oil prices and stronger-than-expected earnings boosted optimism for corporate profits.
US crude for April delivery fell $1.91, or 3%, to settle at $61 a barrel on the New York Mercantile Exchange. Supplies from Saudi Arabia, the world's leading oil exporter, escaped disruption following Friday's unsuccessful suicide attack at the world's largest oil processing plant.
Shares of Lowe's rose 5.8%, or $3.78, to $69.30 after it reported fourth-quarter earnings that beat Wall Street's estimates.
The stock of Lowe's rival, Home Depot, climbed 2%, or 82 cents, to $42.45 and ranked second among the Dow's biggest advancers.
Verizon's shares added 0.7%, or 25 cents, to $34.06 after it forecast 2006 operating earnings would be similar to 2005's, excluding costs related to its acquisition of MCI.
Shares of Merrill Lynch gained 1.5%, or $1.12, to $77.88 after the investment bank said it will buy back as much as $6bn of its outstanding stock.
But shares of home builders fell after a government report showed sales of new US homes fell 5% in January to their slowest pace in a year.
Shares of luxury home builder Toll Brothers dropped 2.1%, or 69 cents, to $32.65.IFAonline
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