London close: Fed caution ends Footsie rally
Cautious comments from US Federal Reserve chief Ben Bernanke pulled the rug from Footsie near the close.
In his twice yearly appearance before Congress, Bernanke said more write-downs following the credit crunch were likely from banks though he added these would not mean a rash of insolvencies.
Banks had been friendless before his remarks and were even more isolated afterwards. HBOS, Alliance & Leicester and Barclays were already suffering after yesterday's poorly received results announcement from Bradford & Bingley.
Diageo was the best performer after the drinks giant said it is on course to hit full year targets after a first half in which its Johnnie Walker, Smirnoff and Captain Morgan brands delivered double-digit sales growth.
British Energy is wanted on reports that it is mulling a £5.5bn break-up and also on broker upgrades. The Times reported this morning that the UK's biggest electricity generator is considering a break-up plan that would involve creating a new company focused on building the next generation of nuclear power plants. British Energy has denied the reports.
Meanwhile Lehman Brother has raised its price target for the stock to 500p from 475p, while Credit Suisse expects the shares to "outperform".
Miners posted good gains led by Lonmin, which is following soaring platinum prices higher. Kazakhmys and Vedanta Resources are also among the top blue chip performers.
Reckitt Benckiser also did well on further consideration of yesterday's results. Dutch brokers ING and ABN Amro are high on the stock, with the former rating it a "buy" while the latter has raised its price target to 3,150p from 3,125p.
Rolls-Royce cruises higher after JP Morgan upgraded the stock to "outperform" from "in line".
Supermarket J Sainsbury is doing well in contrast to Marks & Spencer, which is down again after dropping sharply yesterday. Investors have reacted badly to reports that M&S is resorting to heavy use of discount vouchers to boost trade so soon after the end of its January sale. Next gives ground in sympathy.
Tour operator Thomas Cook said unaudited operating loss in the two month to December was reduced 27% to €106.8m.
Life insurer Standard Life has reinsured £6.7bn of UK immediate annuity liabilities to Great-West's Canada Life International Re.
Goldman Sachs dealt the property sector a blow, downgrading British Land to "neutral" from "buy" and Land Securities to "sell" from "neutral". Shaftesbury, however, edges higher after saying its retail properties in London's West End are performing better than most other areas of the country.
Southern Cross Healthcare is up after reporting a 29.6% rise in first quarter revenue to £262.6m, adding that trading remains strong and in line with expectations.
South Africa-based bank Investec will miss its earnings target this year, but still expects to report some growth over the 12 months despite trading conditions sliding in the past three months.
Health and sensor group Halma expects full year profits to be within the range of market expectations for continuing operations and remains confident in the outlook for the current year and medium term.
Electronics distributor Electrocomponents said it anticipates to deliver headline profit before tax for the year in line with its expectations.
IT services and solutions provider Dimension Data said despite global economic uncertainties, the outlook for the six months to March 2008 remains favourable.
Gearbox designer Torotrak said the historical weighting to a stronger second half performance is continuing and the company is therefore on course to meet full year expectations in fiscal 2008.
Dillistone, which makes advanced software for recruitment companies, expects profit for the year to end December to be comfortably ahead of current market expectations.
Smart card and ID management software specialist Intercede is celebrating the capture of a number of new contracts since its interim results were announced on 11 December.
FTSE 100 - Risers
Diageo (DGE) 1,081.00p +4.55%
Reckitt Benckiser (RB.) 2,801.00p +2.86%
Sainsbury (J) (SBRY) 380.00p +2.63%
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Vedanta Resources (VED) 2,004.00p +2.56%
BT Group (BT.A) 231.50p +2.43%
Lonmin (LMI) 3,359.00p +2.41%
FTSE 100 - Fallers
HBOS (HBOS) 631.00p -5.11%
Home Retail Group (HOME) 264.50p -3.99%
British Land (BLND) 969.00p -3.87%
Schroders (SDR) 969.00p -3.77%
British Airways (BAY) 289.75p -3.09%
Hammerson (HMSO) 1,052.00p -3.04%
FTSE 250 - Risers
Aquarius Platinum (AQP) 786.50p +12.04%
Southern Cross Healthcare Group (SCHE) 407.00p +10.52%
ITE Group (ITE) 150.00p +7.14%
Hochschild Mining (HOC) 422.00p +6.57%
IMI (IMI) 416.00p +6.33%
Michael Page International (MPI) 266.00p +6.29%
FTSE 250 - Fallers
Electrocomponents (ECM) 182.50p -5.68%
Kesa Electricals (KESA) 214.50p -4.24%
SEGRO (SGRO) 490.50p -2.78%
FKI (FKI) 70.75p -2.75%
Stagecoach Group (SGC) 246.25p -2.48%
Burberry Group (BRBY) 430.75p -2.43%
