London close: Financial worries clip Footsie
London closed the day heavily in the red as more worries over the health of the US financial sector meant a poor start in the US and knocked banks and insurers.
Guernsey-based Carlyle Capital Corporation sparked the latest round of panic after it said it is to be liquidated after talks with its bankers came to nothing yesterday. Some $16bn of assets will be seized after the firm defaulted on its debt.
Insurers Prudential, Old Mutual, Royal & Sun Alliance and Aviva are among the biggest fallers, while Friends Provident slipped as Citigroup cut its price target to 190p from 225p.
Barclays, Standard Chartered and Royal Bank of Scotland also nursed chunky losses.
It was also a grim day for plumbing supplies giant Wolseley, which fell after ABN Amro and Goldman Sachs both cut the shares to 'sell'. Recession fears in the US are troubling the group due to its high exposure to the country.
Fuel guzzler British Airways lost altitude as oil prices trade at around $110 a barrel. The black gold's strength came as the dollar weakened, although dealers said the rise was predominantly driven by speculative rather than physical demand.
You have to be a defensive play if you want to be a winner today. Consumer goods giant Unilever, energy firms International Power and Scottish & Southern Energy, and brewer Scottish & Newcastle are among just a handful of stocks in positive territory. Late in the day there was talk that German utility RWE is looking at Scottish & Southern.
Kazakhmys, the London-listed copper miner, denied claims that it has received a proposal from Kazakh miner Eurasian Natural Resources about an £18b deal.
The statement follows yesterday's announcement by ENRC that it had held informal discussions with Kazakhmys as it explored possible strategic opportunities following its London flotation in December.
Miner Xstrata rose on gossip that Brazilian group Vale had agreed to buy Glencore's stake for £42 per share.
Supermarket Wm Morrison boosted full year profit to £612m from £369m in 2006 on turnover up 6% to £13bn. It plans to return £1bn to shareholders during 2008 and 2009 and has made a "promising" start to the new financial year. Chairman Sir Ken Morrison retires today.
Home Retail expects to deliver another year of double-digit earnings growth in line with market forecasts. It said total sales at Argos grew 5.4% in the 8 weeks to 1 March and 1.9% like for like, while Homebase sales fell 0.7% and dropped by 5.3% like for like.
Elsewhere, housebuilder Berkeley Group said it expects results for the current financial year will be at the higher end of analysts' expectations, despite the current turbulent market conditions.
Insulation and roofing supplier SIG boosted underlying pre-tax profit by 30% last year and said trading has started well in 2008.
Military aircraft decoys specialist Chemring jumped after it said its US subsidiary Kilgore has been awarded a contract for the supply of M212 flares to the US Department of Defense. The deal extends over a five year period, and has a minimum value of $5.4m and a maximum value of $382.9m.
But reinsurance broker Benfield turned lower as it said difficult conditions are likely to continue into next year, with 2008 results expected to be below 2007 figures.
Rank Group's online betting unit, Blue Square, is to make its first foray into the international betting market with the launch of a multi-lingual sports betting service, developed in conjunction with 888.
Sportswear retailer Sports Direct said it is confident of reaching the revised market forecast despite challenges in the retail market. Market consensus expectations for underlying EBITDA for the full year 2007/8 increased to approximately £148m after the interim results. "The board is confident of meeting this revised consensus forecast," said the group
South-Africa based IT networks company Datatec said it had put in a strong second half to record its fifth successive annual increase in profits.
Shares in Horizon Technology jumped after the Dublin-based IT outfit confirmed that it has received a preliminary approach which may or may not lead to an €1.18 per share offer. "Shareholders should note however, that the approach is preliminary in nature and is subject to a number of conditions," said the group.
FTSE 100 - Risers
Unilever (ULVR) 1,651.00p +3.19%
Scottish & Southern Energy (SSE) 1,456.00p +2.54%
Xstrata (XTA) 3,921.00p +1.76%
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National Grid (NG.) 721.50p +1.55%
British American Tobacco (BATS) 1,958.00p +1.29%
Home Retail Group (HOME) 251.75p +0.70%
FTSE 100 - Fallers
Wolseley (WOS) 550.00p -6.30%
British Airways (BAY) 230.50p -4.95%
Royal & Sun Alliance Insurance Group (RSA) 123.20p -4.79%
Royal Bank of Scotland Group (RBS) 342.25p -4.60%
Liberty International (LII) 956.00p -4.59%
FirstGroup (FGP) 529.00p -4.34%
FTSE 250 - Risers
Sports Direct International (SPD) 114.50p +5.53%
Chemring Group (CHG) 2,367.00p +4.14%
CSR (CSR) 318.50p +3.41%
Hochschild Mining (HOC) 426.00p +2.65%
Interserve (IRV) 465.50p +1.64%
Spirent Communications (SPT) 63.50p +1.60%
FTSE 250 - Fallers
Benfield Group (BFD) 230.75p -11.16%
Rank Group (RNK) 83.25p -9.02%
JPMorgan European Investment Trust Growth Shares (JETG) 206.50p -6.14%
JPMorgan Indian Inv Trus (JII) 355.00p -6.02%
St James's Place (STJ) 246.25p -6.01%
Kier Group (KIE) 1,253.00p -5.29%
