London close: Wall Street thwarts attempted rise
London looked set for a day of moderate gains until Merrill Lynch's worse than expected third quarter results sent Wall Street into a tail-spin and dragged London down with it.
Nevertheless, some bright spots were still to be found. Defence giant BAE Systems led the gainers after Lonrho said it is adding three BAE 146 aircraft to its African fleet.
Household goods retailer Home Retail was also ahead after performing "very strongly" in the first half, with benchmark pre-tax profit up 40% thanks to higher sales at Argos.
The group, which demerged from GUS in October last year, reported a profit for the 26 weeks to 1 September of £149.8m, up from a pro forma £107.2m a year ago.
Carphone Warehouse was in demand on news it has signed a wholesale deal with Vodafone to launch a new contract called Talkmobile.
Insurer Friends Provident was in favour after it said life and pensions new business increased 35% in the third quarter. It also announced new target returns of capital to shareholders after the merger between Friends and Resolution.
On the downside, miner Kazakhmys tumbled after it said total copper cathode output declined 5% in the third quarter, adding that overall production for the year could be lower than 2006.
Broker Seymour Pierce responded by downgrading the stock from "hold" to "underperform". Other mining stocks fell in sympathy, even Rio Tinto, which initially improved after it said its offer for Canadian aluminium business Alcan has been successful, having received 79.41% acceptances for the $38.1bn cash deal.
Household products group Reckitt Benckiser fell despite raising its full year target for net revenue and income growth after reporting good third-quarter figures at midday. Investors were unimpressed with adjusted operating margin flat at 21.8%.
GlaxoSmithKline was under the weather after the drug major said third quarter profit before tax fell by 7% due to generic competition in the US and a 38% drop in sales of diabetes drug Avandia. Its peer, AstraZeneca, had its own problems after being downgraded to "sell" from "neutral" by Merrill Lynch.
Relations between Scottish & Newcastle and Carlsberg continue to deteriorate. Yesterday, the British brewer accused Carlsberg of breaching the terms of the Baltic Beverages joint-venture agreement, but the Danish brewer today refuted the claims.
Oil major BP was little changed after announcing plans to cut around 350 jobs as part of a restructuring of it North Sea organisation headquartered in Aberdeen.
Meanwhile, Intercontinental Hotels announced it will take an exceptional charge of £30m to finance the worldwide relaunch of the Holiday Inn brand.
Among the mid-caps, Davis Service said it saw double digit growth in both revenue and operating profits in the third quarter plus higher interest costs, reflecting acquisitions made in the first half.
Engineering firm Bodycote saw sales for the nine months to the end of September grow 18.7% at constant exchange rates and expects all its markets to remain buoyant except automotive.
Stockbroker Daniel Stewart found plenty of friends today after it swung into the black at the half way stage and said it has seen a "solid" start to the second half of the year.
Shareholders in oil and gas company Anzon Energy hit paydirt as the company agreed to an offer from Australian company ARC Energy.
BP Marsh & Partners, a niche venture capital provider to early stage financial services businesses, has seen its net asset value excluding deferred tax rise 12.8% on last year.
Document management specialist IDOX was sharply higher after a group of its top ranking directors lifted their stake in the company.
FTSE 100 - Risers
BAE Systems (BA.) 507.00p +3.36%
Rolls-Royce Group (RR.) 546.00p +2.44%
Tullow Oil (TLW) 610.00p +2.09%
Carphone Warehouse Group (CPW) 336.25p +1.82%
Home Retail Group (HOME) 393.00p +1.55%
British Airways (BAY) 423.50p +1.44%
Royal Dutch Shell 'B' (RDSB) 2,046.00p +1.39%
Friends Provident (FP.) 175.50p +1.39%
Associated British Foods (ABF) 863.00p +1.23%
Royal Dutch Shell 'A' (RDSA) 2,056.00p +1.18%
FTSE 100 - Fallers
Kazakhmys (KAZ) 1,377.00p -7.27%
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Reckitt Benckiser (RB.) 2,728.00p -4.88%
Lonmin (LMI) 3,250.00p -4.66%
Vedanta Resources (VED) 2,063.00p -4.05%
Northern Rock (NRK) 182.90p -3.64%
BHP Billiton (BLT) 1,741.00p -3.55%
Daily Mail and General Trust (DMGT) 600.00p -3.54%
DSG International (DSGI) 117.00p -2.82%
Antofagasta (ANTO) 797.00p -2.57%
Punch Taverns (PUB) 981.50p -2.44%
FTSE 250 - Risers
Cairn Energy (CNE) 2,413.00p +6.35%
Henderson Group (HGI) 182.50p +3.40%
IG Group Holdings (IGG) 412.00p +2.81%
Premier Foods (PFD) 217.00p +2.48%
Xchanging (XCH) 268.75p +2.38%
Helphire Group (HHR) 390.50p +2.36%
Premier Oil (PMO) 1,181.00p +2.34%
PV Crystalox Solar (PVCS) 132.75p +2.12%
Mapeley (MAY) 1,873.00p +2.07%
eaga (EAGA) 187.25p +1.77%
FTSE 250 - Fallers
Aquarius Platinum (AQP) 1,733.00p -4.57%
Cookson Group (CKSN) 832.00p -4.26%
Daejan Holdings (DJAN) 3,380.00p -4.22%
Big Yellow Group (BYG) 465.00p -4.22%
Ashtead Group (AHT) 110.25p -4.13%
Unite Group (UTG) 384.00p -4.06%
Grainger (GRI) 418.00p -4.02%
SThree (STHR) 251.50p -3.82%
Mondi (MNDI) 416.25p -3.59%
Michael Page International (MPI) 424.25p -3.58%
