UK stocks flat as earnings counter UK growth

* FTSE 100 gains fade late on

* Banks higher, helped by strong UK Q3 GDP

* WPP, Unilever provide divergent earnings picture

LONDON, Oct 25 (Reuters) - Britain's top share index was

fractionally higher on Thursday as gains by banks on strong UK

GDP figures were countered by some mixed corporate earnings.

Banks added 0.8 percent on news that Britain

pulled out of recession in the third quarter, with its strongest

quarterly economic growth in five years, boosting expectations

that lending conditions will improve.

Many commentators, however, still remained cautious about

the outlook for the British economy, with the third-quarter

figure for gross domestic product probably flattered by the

Olympics in London in August.

"Despite the fact the GDP figure released today was better

than expected and does suggest a glimpse of hope for the UK

economy, it must be put into perspective. This is only a single

figure, and does not signal the start of sustained recovery,"

Jeremy Whitley, Manager of Dunedin Income Growth Investment

Trust said.

At the close, the FTSE 100 index was up 0.27 points,

or 0.01 percent at 5,805.05 points, having added 0.1 percent on

Tuesday to snap a three-session losing streak.

While the economy returned to growth, the third-quarter

corporate earnings season maintained a mixed picture.

WPP shed 2.3 percent after the world's largest

advertising group cut its full-year outlook for the second time

in two months in a third-quarter trading update.

Trading volume in WPP was more than double its 90-day daily

average, at 254 percent, while volume for the FTSE 100 index was

90 percent of its average.

Consumer products giant Unilever, however, added

2.9 percent after beating market expectations with a 5.9 percent

rise in underlying sales in the third quarter.

And cruises operator Carnival was the top blue chip

gainer, up 3.0 percent, as its peer Royal Caribbean Cruises

posted lower quarterly earnings but raised its full-year

forecast, saying bookings have been stronger than expected and

it has been able to charge more per cruise.

Royal Caribbean was up over 3 percent on Wall Street.

Other well-received results helped lift New York stocks

early on, but by London's close the gains had faded with U.S.

blue chips down 0.1 percent. Tech giants Apple

and Amazon both report after the New York close.

"The UK stock market's fortunes depend more on the health of

the world economy than the domestic scene. Here, there are some

hopeful signs from U.S. housing, the Chinese cycle bottoming,

lower oil prices and reduced fears of a European financial

collapse," Andrew Bell, Chief Executive of Witan Investment

Trust said.

(Reporting by Jon Hopkins; Editing by Ruth Pitchford)

Source: http://news.yahoo.com/uk-stocks-flat-earnings-counter-uk-growth-162152840--business.html

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