London close: Late selling narrows lead
London ended the day with reasonable gains as mortgage lenders bounced back, but closed around 60 points off its best levels following a round of selling during the last hour and a half.
Troubled mortgage lender Northern Rock led the risers on bid hopes, while a good start on Wall Street also ensured the leading index stayed ahead.
Northern admitted last night that it is in preliminary discussions with selected parties, but emphasised that there can be no certainty as to the outcome of such discussions.
Though sharply higher, its shares are still below the 200p level that some observers claimed last week would be the upper limit to any take-over bid. Alliance & Leicester, HBOS and Bradford & Bingley were all up in sympathy.
Mining heavyweights Xstrata, Rio Tinto and BHP Billiton all finished the session in the red having toasted gains earlier on, while Anglo American and Vedanta were off their highs.
Housebuilder Barratt lifted full year profits by 9% to £428m, adding it now expects synergy benefits from its Wilson Bowden deal of £60m, but a cautious outlook had the shares flat at the finish.
It said that the credit squeeze has affected customer sentiment. "It is not yet clear how quickly the market will recover but we have to assume that there will be downward pressure on volumes and price inflation in the short-term." Peers were mixed, with Bellway up and Bovis down.
Rival Kesa Electricals warned that the outlook for trading in the second half was uncertain, particularly in the UK. The Comet and Darty owner posted pre-profits of £32.4m in the half -year to July down from £39.3m. Interim revenues rose by 3.9% on a like-for-like basis.
The gloomy assessment for the UK took its toll on rival DSG and prompted Credit Suisse to slash its price target to 95p from 155p, with profits seen down as much as 75% if the worst happens.
Elsewhere, BP was still reeling from comments made yesterday by boss Tony Hayward that third quarter revenue will be "dreadful".
Credit checking specialist Experian also headed south after failing to disclose the price it has achieved for the sale of its Loyalty Solutions unit to German company Easycash.
Engineer Smiths' operating profit came in flat at £348m, in line with its guidance in August. Revenues for the year to July 31 fell slightly to £2.16bn. It also confirmed Philip Bowman as its new chief executive.
Platinum refiner Johnson Matthey was wanted after declaring it is on course to meet first half targets. "The encouraging start made in the first quarter has continued in the second," said the group.
Shares in United Utilities rose as the utility giant confirmed it is on track to deliver first half results in line with expectations with the sale of its electricity distribution business progressing well.
Dairy products maker Dairy Crest struck a sour note, despite the company revealing this morning that it is trading in line with expectations. The company has had to overcome problems in the form of a recall of its Clover brand and soaring cream prices, and is now wrestling with the issues raised by the OFT's recent report on collusion in the dairy market between producers and the supermarkets.
Business publisher Euromoney pushed ahead as it said trading in the second half has been encouraging and it now expects adjusted pre-tax profit will be ahead of market expectations.
FTSE 100 - Risers
Northern Rock (NRK) 182.00p +11.59%
Invesco (IVZ) 666.00p +5.55%
HBOS (HBOS) 873.00p +5.12%
ICAP (IAP) 518.50p +4.38%
British Land (BLND) 1,185.00p +3.49%
Tullow Oil (TLW) 596.50p +3.47%
Alliance & Leicester (AL.) 733.00p +3.39%
WPP Group (WPP) 654.00p +3.24%
Old Mutual (OML) 157.40p +3.15%
Smiths Group (SMIN) 1,095.00p +3.01%
FTSE 100 - Fallers
DSG International (DSGI) 129.90p -3.71%
Carphone Warehouse Group (CPW) 350.25p -2.10%
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Experian Group (EXPN) 515.00p -2.09%
Xstrata (XTA) 3,149.00p -1.44%
Wolseley (WOS) 804.50p -1.41%
InterContinental Hotels Group (IHG) 919.00p -1.34%
Antofagasta (ANTO) 780.50p -1.14%
BP (BP.) 567.00p -0.96%
BHP Billiton (BLT) 1,698.00p -0.76%
BT Group (BT.A) 305.00p -0.73%
FTSE 250 - Risers
Moneysupermarket.com (MONY) 173.00p +5.49%
Talvivaara Mining (TALV) 290.00p +5.45%
Aquarius Platinum (AQP) 1,863.00p +5.37%
FirstGroup (FGP) 668.00p +5.36%
CSR (CSR) 612.50p +5.24%
Euromoney Institutional Investor (ERM) 520.00p +4.89%
Bradford & Bingley (BB.) 291.25p +4.39%
Electrocomponents (ECM) 249.50p +4.39%
Hiscox (HSX) 256.50p +3.43%
Premier Farnell (PFL) 161.25p +3.37%
FTSE 250 - Fallers
JKX Oil & Gas (JKX) 344.50p -7.02%
Game Group (GMG) 188.00p -6.93%
Kesa Electricals (KESA) 261.00p -5.52%
Northgate (NTG) 911.50p -5.05%
Dairy Crest Group (DCG) 654.50p -4.87%
Luminar (LMR) 605.50p -4.50%
WH Smith (SMWH) 367.25p -4.36%
Jardine Lloyd Thompson Group (JLT) 372.25p -4.18%
Axon Group (AXO) 837.00p -4.07%
DS Smith (SMDS) 194.25p -3.96%
