London close: Footsie closes in the red
London's benchmark index ended the day in the red as concerns about mortgage lending weighed on the banking sector, while a poor start on Wall Street compounded matters.
US stocks fell on concerns that higher bond yields could point to a possible rise in interest rates later this year.
HBOS led the blue chip index lower. The bank said it will meet the market's recently upgraded consensus for full year underlying earnings per share of 110.8p, some 10% ahead of 2006 but revealed net new mortgage lending market share will fall to below 10% in the first half, though it expects this to return to 15-20% in the second half.
HBOS also said that refunds on bank charges had not been material but it would report them outside of underlying earnings as they related to prior years. Northern Rock, Bradford & Bingley, Alliance and Leicester and RBS all fell in sympathy.
Falling metal prices hurt mining heavyweights such as Rio Tinto, BHP Billiton and Xstrata.
Johnson Matthey took off as Merrill Lynch started the platinum specialist as a 'buy', predicting further growth of catalyst products in the automotive industry. The broker has slapped a target price of 1,850p. Chemical stocks did well generally today with ICI also up.
Rolls-Royce finished well. The aero engine maker is up on reports that it could win an engine supply contact worth up to $1.5bn. Press talk that Airbus and GE may not supply a competitor to the Rolls Trent engine also buoyed the shares.
Away from top stocks, Debenhams was up on talk of stake building by Baugur. The Icelandic retail investor is said to have built up a near 5% stake in the department store chain.
Meanwhile, waste firm Biffa fell on cautious comments about the current year. Following strong growth last year, it expects growth at more modest levels from its Resource Recovery and Landfill division in the current year, it said.
Fashion chain Ted Baker lifted group revenue for the 19 weeks to 9 June by 6.4% despite a tough period for its wholesale arm. Retail sales jumped 12.8% but wholesale sales for the period were 6.7% down as conditions remained difficult for some customers.
Public sector focused software group Civica has received an unsolicited preliminary approach from a private equity fund. Discussions are at an early stage and this approach may or may not lead to an offer being made, it added.
Cake maker Inter Link has been suspended pending clarification of its finances after bid talks broke down.
Diversified marketing services firm Creston said it has seen an encouraging start to the new financial year and trading is line with expectations.
Shares in NHS staff supplier Pinnacle plunged after the Aim-listed group said operating profit before amortisation for the current year will fall 'very substantially' short of current market expectations.
FTSE 100 - Risers
Rolls-Royce Group (RR.) 526.50p +3.44%
Persimmon (PSN) 1,254.00p +2.03%
Johnson Matthey (JMAT) 1,695.00p +1.80%
DSG International (DSGI) 168.90p +1.38%
Rexam (REX) 500.50p +1.21%
Imperial Chemical Industries (ICI) 523.75p +1.06%
Unilever (ULVR) 1,539.00p +0.72%
Reckitt Benckiser (RB.) 2,733.00p +0.70%
Carnival Corporation (CCL) 2,549.00p +0.63%
Scottish & Newcastle (SCTN) 624.00p +0.56%
FTSE 100 - Fallers
HBOS (HBOS) 1,031.00p -3.64%
Northern Rock (NRK) 997.00p -2.83%
Royal Bank of Scotland (RBS) 642.00p -2.65%
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Lonmin (LMI) 3,752.00p -2.29%
Bradford & Bingley (BB.) 397.00p -2.28%
Alliance and Leicester (AL.) 1,104.00p -2.04%
Reed Elsevier (REL) 647.00p -1.90%
Vedanta Resources (VED) 1,476.00p -1.80%
Royal Dutch Shell 'A' (RDSA) 1,902.00p -1.76%
Royal Dutch Shell 'B' (RDSB) 1,944.00p -1.67%
FTSE 250 - Risers
Bellway (BWY) 1,335.00p +3.73%
Bovis Homes (BVS) 977.00p +3.17%
British Energy Group (BGY) 543.50p +2.74%
Redrow (RDW) 547.00p +2.72%
Ladbrokes (LAD) 426.25p +2.59%
Jardine Lloyd (JLT) 433.50p +2.30%
Galliford Try (GFRD) 161.25p +2.22%
easyJet (EZJ) 532.00p +2.11%
Wimpey (George) (WMPY) 573.50p +2.05%
Bodycote (BOY) 284.75p +1.97%
FTSE 250 - Fallers
Biffa (BIFF) 293.00p -9.01%
BlueBay (BBAY) 525.50p -4.97%
FKI (FKI) 123.50p -4.08%
Ashmore Group (ASHM) 283.00p -4.07%
PartyGaming (PRTY) 38.75p -3.73%
Topps Tiles (TPT) 231.00p -3.65%
Renishaw (RSW) 660.00p -3.65%
Hochschild Mining PLC Ord 50p (WI) (HOC) 303.00p -3.58%
Randgold Resources (RRS) 1,121.00p -3.28%
JPMorgan Fleming Mercantile Inv Tst (JFM) 1,272.00p -2.90%
