London close: Financials drive Footsie lower
An attempted mid-afternoon rally fizzled out after an indifferent start by Wall Street, with financial stocks leading the retreat.
Resolution was the major casualty in a weak insurance sector on fears that delays in its takeover by Pearl Group could jeopardise the merger. Pearl has asked for the merger deadline to be extended a further 3 weeks to enable it to complete talks with the Financial Services Authority regarding the timing of post-completion distributions of capital from the Resolution life companies.
Banks were also weak, with Alliance & Leicester leading the sector lower. Comments at the weekend from German finance minister Peer Steinbruck that the G7 now feared that write-offs of losses on securities linked to US sub-prime mortgages could reach $400bn have unsettled the sector.
Glaxo was wanted after UBS upgraded the pharmaceuticals leviathan to "buy" from "neutral". Similarly, caterer Compass Group advances after Citigroup reiterated its "buy" rating" and 430p target price; the US bank said Compass's first quarter trading statement showed operating profit is running well ahead of last year and marginally ahead of expectations.
Also benefiting from broker comment was Imperial Tobacco. JP Morgan has lifted its price target on the stock to 3,100p from 2,600p, citing cost savings following Imperial's takeover of its Franco-Spanish rival Altadis.
Elsewhere, Smiths Group says it will report overall sales and profit growth for the first half year in line with management expectations, with strong performances from Detection and Specialty Engineering offsetting a flat performance in Medical. Currency translation had a minor impact. Net debt was approximately £650m at the end of the period.
The collapse of bid talks at stockbrokers WH Ireland had knock-on effects for rival Hargreaves Lansdown which was marked lower today.
Office accommodation provider Workspace posted losses for the nine months to end December as a result of revaluation reductions in the third quarter, but said it remains confident of its long-term outlook.
Energy efficiency measures provider Eaga charged higher after being selected as the preferred supplier for the BBC's digital switchover help scheme.
Engineer FKI was the best performer among FTSE 250 stocks on rumours of revived bid interest from US equity buy-out specialists Blackstone.
Share dealing software firm Fidessa saw revenue and profits rise for the year thanks to the acquisition of LatentZero in April. Revenue for the 12-months to December 2007 rose to £135m from £94.6m previously, Pre-tax profit for the period increased to £17.1m from £14.3m before.
Electronic trading systems group Patsystems upped profits by over a third last year, adding that long term prospects are outstanding. The company intends to be "proactive on the acquisitions side" in 2008, and is looking to "bulk up" in order to take advantage of its operational gearing.
Shares in oil and gas explorer Aminex plunged after it announced it has plugged and abandoned a well in Tanzania.
Napo Pharmaceuticals was weaker on news that Trine Pharmaceuticals and Napo have mutually agreed to terminate their license agreement for Napo's gastro-intestinal product, crofelemer, following Trine's review of preliminary data of the Phase 2b study on the drug's effectiveness in treating Irritable Bowel Syndrome.
In contrast, Regen Therapeutics was buoyant after its CogniSure drug, already marketed to support healthy brain ageing in humans, has been shown to work on cats and dogs as well.
GCap Media's strategic overhaul will see it close its non-core brands theJazz and Planet Rock and dispose of Xfm regional analogue licences in Scotland, South Wales and Manchester alongside national digital group Digital One. Chief executive Fru Hazlitt said the target is for underlying operating profit margins of 12%-14% in 2009 and 17%-19% in 2010. That will mean profit improvements of £12.3m, which includes total annualised cost savings, excluding the effect of closures and disposals, of £8.8m.
International Greetings is to axe its final dividend, adding its financial performance before exceptional reorganisation costs and other items will come in significantly below market expectations for the year to March. A reduction in the final uptake of Christmas goods in the latter part of December, the slowdown in consumer spending during the first quarter of this calendar year and much worse than expected results for the greetings business are blamed. The greetings business is to be heavily rationalised.
Regeneration specialist St. Modwen Properties saw its full year NAV rise 20% but warned that the deteriorating market value of properties will have an impact on 2008.
Business class only airline Silverjet continued its downward trajectory after announcing that TFB Mortgages Limited has decided not to convert its £10m convertible loan into new Silverjet shares at a price of 60p each.
FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 291.50p +1.39%
GlaxoSmithKline (GSK) 1,084.00p +1.31%
Compass Group (CPG) 330.50p +1.23%
Smith & Nephew (SN.) 665.00p +1.14%
Imperial Tobacco Group (IMT) 2,386.00p +0.97%
Persimmon (PSN) 714.50p +0.92%
Kazakhmys (KAZ) 1,257.00p +0.80%
TUI Travel (TT.) 253.25p +0.80%
Diageo (DGE) 1,028.00p +0.69%
Antofagasta (ANTO) 727.00p +0.62%
FTSE 100 - Fallers
Resolution (RSL) 672.00p -6.15%
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Old Mutual (OML) 116.50p -5.59%
Aviva (AV.) 551.00p -4.92%
Shire (SHP) 895.00p -4.53%
Alliance & Leicester (AL.) 580.00p -4.45%
Royal & Sun Alliance Insurance Group (RSA) 124.60p -4.45%
Legal & General Group (LGEN) 120.10p -4.07%
Prudential (PRU) 583.00p -3.80%
Man Group (EMG) 544.50p -3.80%
Standard Life (SL.) 198.00p -3.65%
FTSE 250 - Risers
FKI (FKI) 70.50p +8.88%
eaga (EAGA) 177.75p +6.76%
888 Holdings (888) 131.50p +5.62%
Berkeley Group Holdings Units (BKG) 995.50p +4.73%
Sports Direct International (SPD) 121.00p +4.31%
Ferrexpo (FXPO) 284.50p +4.21%
IMI (IMI) 380.75p +3.75%
Moneysupermarket.com (MONY) 109.50p +3.06%
PartyGaming (PRTY) 27.50p +2.80%
Signet Group (SIG) 63.50p +2.42%
FTSE 250 - Fallers
CSR (CSR) 416.00p -6.09%
Hargreaves Lansdown (HL.) 158.00p -5.81%
Telecity Group (TCY) 192.25p -5.64%
PayPoint (PAY) 593.00p -5.57%
Genus (GNS) 627.00p -4.78%
Investec (INVP) 382.50p -4.37%
COLT Telecom Group S.A. (COLT) 146.00p -4.26%
JPMorgan Indian Inv Trus (JII) 403.75p -4.10%
Invensys (ISYS) 239.25p -4.01%
JD Wetherspoon (JDW) 306.50p -3.99%
