London close: Footsie crashes over 200 points

26.07.2007

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London's blue chips were routed near the close as more heavy falls for US markets spread across the Atlantic. FTSE 100 closed down 203 at 6,251.

Only three FTSE 100 members were in blue numbers by the end of the day with the severest punishment reserved for those disappointing with trading updates today.

Legal & General fitted neatly into this category and took a pounding. Plans to buy back £1bn of shares alongside a 5% hike in first half operating profit were ignored as investors focused on first half new life and pensions business, down at £178m on an annual premium equivalent (APE) basis from £192m, and stampeded for the exit.

Other big fallers included Intercontinental Hotels, Friends Provident, Standard Life and Anglo American as spooked hedge funds unwound speculative takeover positions.

Even companies announcing good figures could not escape the red tide. Royal Dutch Shell's second quarter profits rose by 20% to $7.556bn with bumper refining and marketing margins overshadowing lower production. Stripping out one-offs, profits rose 5% to $6.896bn, slightly ahead of most forecasts.

Better than expected sales of its core hyperactivity drug Adderall XR has prompted drug group Shire to up its sales guidance for the full year. Shire now predicts revenues will grow by at least 25% this year, up from its previous estimate of a percentage increase in the low twenties.

AstraZeneca ramped up its cost saving plans, with around 7,600 employees now likely to lose their jobs as the drug major looks to deliver annual benefits of more than $900m by 2010.

BT are down their trading statements, although the telecoms giant hit market forecasts in the first quarter with underlying earnings rising by 3% and its broadband arm adding 175,000 new customers.

BAT is down despite a strong first half. The group cautioned, though, that tax increases in a number of countries and heavy investment in its key brands would mean the rate of profit growth slowing in the second half.

Mortgage lender Bradford & Bingley's underlying profit in the six months to the end of June was £180.4m, up from £164.2m, but slightly below market estimates. " Our pipeline of new business is at all-time high levels providing us with a good start to the second half. The drivers of the specialist markets and credit quality remain robust. We continue to be comfortable with the market's expectations of underlying profit for the full year, " it said. a share or above is a more realistic price.

DIY retailer Kingfisher warned sales growth slowed in the second quarter as wet weather hit sales at B&Q. Like-for-like sales grew by 2.6% in the 10 weeks to 14 July, compared with a rise of 6.7% in the first quarter. B&Q's underlying sales fell by 2.3%. Analysts say the figures could have been worse.

On the FTSE 250, Kesa published a bullish statement, while Carphone Warehouse dipped on its trading update.

Fund and wealth management services provider Rathbone Brothers cheered a 27% improvement in underlying pre-tax profit during the first half.

FTSE 100 - Risers

Resolution (RSL) 631.50p +2.52%

British Energy Group (BGY) 485.00p +0.52%

National Grid (NG.) 687.00p +0.07%

FTSE 100 - Fallers

Legal & General Group (LGEN) 138.10p -8.24%