London close: Footsie halves losses
London staged a partial recovery late in the session, despite early losses in the US, as Carnival rallied on strong third quarter figures, although mortgage lenders remained a major drag.
Cruise ship group Carnival reported net income up 12% during the period due mainly to stronger pricing on bookings and the introduction of new ships. Miners also helped trim the deficit.
But investors were left considering the implications of the government's Northern Rock rescue deal, which only applies to accounts opened or re-opened by last night.
Analysts suggest this will make it very difficult for the bank to rebuild its position and could effectively mean it is just left to run down its mortgage book. Meanwhile, rumours persist that any bid for the Tyneside firm will be at no more than 200p a share. Alliance & Leicester, HBOS and Bradford & Bingley fell in sympathy.
Housebuilders joined the slide as Citigroup issued a cautious note on the sector, predicting zero price inflation in 2008. Barratt Developments and Taylor Wimpey both go down to 'hold' from 'buy'. Persimmon was among the casualties.
Telecoms group BT also lost ground after Morgan Stanley downgraded the shares to 'underweight' from 'equal-weight' with price target dropped by 6% to 340p, but talk that Zurich Financial is mulling a bid had Friends Provident higher.
Wm Morrison saw operating profit before property gains and tax rise 57% to £247m with pre-tax profits up to £266.3m. Like for like sales growth in the 7 weeks since the half year was 3%, or 2.2% including fuel, better than the first half, although the shares lost an early advantage.
J Sainsbury picked up though as it indicated it might accept an offer from Delta Two. "We have held extensive discussions with Delta Two over a number of weeks and believe that their revised proposal is comprehensive and, if it results in an offer, that offer would be recommendable to shareholders," said Sainsbury chairman Philip Hampton.
The news overshadowed a claim from the OFT that all of the big supermarkets colluded with dairy groups to keep dairy prices high in 2002-03. DairyCrest and Robert Wiseman slipped on the news.
B&Q owner Kingfisher reported a better first half than expected with a 6.2% increase in underlying profits to £189.6m. It cautioned, though, that in the UK it expects the second half to be tough as recent interest rate rises and current uncertainty in financial markets affect customer behaviour. The outlook for our international markets remains generally positive, it added.
Resolution has held due diligence meetings with both Standard Life and Friends Provident, but has not received an offer from either group, the insurance firm said late Thursday.
Meanwhile, US stock market operator Nasdaq has sold a 28% stake in the London Stock Exchange to Borse Dubai at 1,414p per share as part of a tie up between the pair that includes a joint bid for Nordic exchange OMX.
Later in the session, Qatar Investment Authority (QIA) said it had bought a 20% stake in the UK exchange, but does not intend to launch an offer.
Elsewhere, nightclub group Luminar has seen a 4.1% rise in group like-for-like sales in the half year to August with its branded outlets recording a 13.4% gain. Heavy promotions had been needed to get clubbers in it added, which had hit margins.
Braemar Shipping's overall trading this financial year had been better than expected since June and as a result pre-tax profits for the first half are expected "to exceed last year's second half profits of £6m."
FTSE 100 - Risers
Carnival Corporation (CCL) 2,374.00p +7.08%
Friends Provident (FP.) 174.70p +4.24%
Sainsbury (J) (SBRY) 569.50p +2.80%
Kazakhmys (KAZ) 1,450.00p +1.90%
Anglo American (AAL) 3,182.00p +1.69%
Vodafone Group (VOD) 171.00p +1.54%
SABMiller (SAB) 1,414.00p +1.51%
British American Tobacco (BATS) 1,709.00p +1.42%
Antofagasta (ANTO) 798.00p +1.40%
Rio Tinto (RIO) 3,997.00p +1.27%
FTSE 100 - Fallers
Northern Rock (NRK) 185.20p -27.94%
Alliance & Leicester (AL.) 755.50p -7.36%
Kingfisher (KGF) 181.00p -5.88%
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Home Retail Group (HOME) 373.75p -5.38%
Persimmon (PSN) 939.00p -5.06%
HBOS (HBOS) 837.00p -4.23%
Drax Group (DRX) 608.00p -4.10%
Marks & Spencer Group (MKS) 564.00p -4.00%
British Airways (BAY) 368.75p -3.78%
SEGRO (SGRO) 484.00p -3.68%
FTSE 250 - Risers
London Stock Exchange Group (LSE) 1,687.00p +16.10%
Axon Group (AXO) 899.00p +4.53%
Tullow Oil (TLW) 573.50p +4.37%
Cairn Energy (CNE) 2,000.00p +3.79%
Assura Group (AGR) 189.75p +3.69%
Victrex (VCT) 658.50p +2.89%
Regus Group (RGU) 124.25p +2.47%
Avis Europe (AVE) 41.50p +2.47%
Soco International (SIA) 2,395.00p +2.22%
Spirent Communications (SPT) 61.00p +2.09%
FTSE 250 - Fallers
Luminar (LMR) 633.00p -9.51%
Bradford & Bingley (BB.) 299.75p -8.61%
SIG (SHI) 1,131.00p -6.45%
Stagecoach Group (SGC) 225.50p -5.85%
St. Modwen Properties (SMP) 482.50p -4.93%
Taylor Wimpey (TW.) 290.00p -4.92%
Redrow (RDW) 421.50p -4.91%
Dairy Crest Group (DCG) 685.00p -4.86%
FKI (FKI) 91.00p -4.71%
Debenhams (DEB) 98.50p -4.60%
