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London shares cut losses by midafternoon; banks lower; Wall Street down
Mon, 3rd Mar 2008 15:41
LONDON (Thomson Financial) - Leading shares were weaker but well off lows by midafternoon, with UK banks, with the exception of HSBC, weighing on the blue chips amid global market concerns, and Wall Street opening lower.
At 3.07 pm, the FTSE 100 index was off 49 points at 5,835.3, having recovered from a low of 5,770.1. The FTSE 250 index was down 49 points at 10,018.9.
Volume was below average, with 1.6 bln shares having changed hands in 571,374 deals.
Wall Street opened lower for the first trading session of March, amid ongoing jitters about flagging economic growth and the crisis in the credit markets.
But the US manufacturing sector is not shrinking as badly as some had forecast, according to the Institute for Supply Management data. Its index fell to 48.3 in February, from 50.7 in January. Analysts had forecast a fall to 48.1.
Just after this data came out, US shares trimmed their losses and the Dow Jones Industrial Average was down 33.5 points at 12,232.9 The S&P 500 was down 0.7 points at 1,329.95 while the Nasdaq Composite was 2.56 lower at 2,268.92.
Turning to UK equities, banks remained the major story. HBOS fell to its lowest in five years and was the FTSE 100's biggest loser, off 39-1/2 at 564, extending its losses after poor numbers last week, with Bear Stearns cutting its rating to 'peer perform' from 'outperform'. The broker highlighted that funding pressures continue to impact HBOS's performance.
Elsewhere in the sector, Royal Bank of Scotland fell 16 to 369, and Barclays gave away 13-1/2 to 463-3/4. Alliance & Leicester was down 31 at 532-1/2.
HSBC, however, bucked the trend, and was still at the top of the FTSE 100 leaderboard midafternoon, up 20-1/2 at 786-1/2. The UK's biggest bank delivered a 10 pct increase in full-year profit, with a strong performance in Asia helping to offset a sharp rise in bad debt charges at its troubled US division.
'North America has been even worse than expected, but on the other hand Asia has perhaps done even better,' said Simon Willis, banks analyst at stockbroker NCB, who has a 'reduce' stance on the shares. 'We think there's still a lot of pain to come through in the States.'
Elsewhere, Pearson lost 15-1/2 at 650-1/2 after concerns about prospects for the publisher's US-based education business overshadowed better-than-expected full-year results and a generally positive outlook for 2008.
Still on the downside, weekend press reports suggest Rentokil's under-fire chief executive, Doug Flynn, is secretly preparing the group for a break up after this week issuing its second profit-warning in the space of two months.
The shares were down 1 penny
at 82.4. The company is almost certain to be relegated from the FTSE 100 in the quarterly reshuffle this month.
Oils also played their part in dragging the FTSE lower, despite crude prices near record levels. Brent for April delivery was recently trading up 1.38 usd at 101.48 a barrel.
BP was down 8 pence at 538. Royal Dutch Shell was off 30 at 1,751, and Cairn Energy fell 16 at 2,601.
Turning to the second liners, Close Brothers lost 33 at 626, after reporting a 2 pct drop in its first-half profit, held back by the credit crunch, it said it had decided not to break itself up or return cash to shareholders following a strategic review.
The shares fell sharply on Friday after the company said takeover talks had ended.
Bradford & Bingley was hurt by the banking gloom, and was the biggest midcap faller, midafternoon, down 22 at 203.
A broker downgrade helped push shares in Moneysupermarket.com 8-1/2 lower at 129-1/2, with UBS cutting its rating on the group to 'neutral' from 'buy', while keeping its target unchanged at 140 pence.
The broker said that it had concerns on the group's performance of the money division in the near term.
On the 250 upside, WSP was 26 higher at 568-1/2, after the company unveiled full-year numbers ahead of expectations, with Altium Securities reiterating its 'buy' rating and 650 pence target and WH Ireland upgrading its two-year earnings estimates.
Meanwhile, a reassuring trading update lifted Game Group 5-1/4 higher at 191-1/2. Earlier, the company said it expects full-year pretax profit to be not less than 74 mln stg, slightly ahead of the 73 mln stg indicated previously.
Seymour Pierce retained its 'buy' stance on Game Group.
Higher full-year revenues and a 15 pct rise in dividends sent Keller Group up 13 at 610-1/2, while Senior added 2-1/4 at 101-1/4 following its own encouraging full-year numbers.
Engineering group GKN rose 18, or 6.8 pct, to 283 after Citigroup upped its target price to 295, from 285, while keeping a 'hold' rating.
Helphire regained some ground lost recently, up 18-1/4 at 190-1/4, as directors bought shares.
Finally, Cobham moved 5-1/4 ahead to 187-3/4, after it said it will earn up to 1 bln usd from the use of its products on Northrop Grumman aircraft, which have been selected by the USAF for the multi-billion dollar tanker programme.
In reaction, Merrill Lynch said the sales are worth about 3 pence per share and repeated its 'buy' view this morning.
brian.gorman@thomson.com
btg/slm
COPYRIGHT
Copyright Thomson Financial News Limited 2007. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
At 3.07 pm, the FTSE 100 index was off 49 points at 5,835.3, having recovered from a low of 5,770.1. The FTSE 250 index was down 49 points at 10,018.9.
Volume was below average, with 1.6 bln shares having changed hands in 571,374 deals.
Wall Street opened lower for the first trading session of March, amid ongoing jitters about flagging economic growth and the crisis in the credit markets.
But the US manufacturing sector is not shrinking as badly as some had forecast, according to the Institute for Supply Management data. Its index fell to 48.3 in February, from 50.7 in January. Analysts had forecast a fall to 48.1.
Just after this data came out, US shares trimmed their losses and the Dow Jones Industrial Average was down 33.5 points at 12,232.9 The S&P 500 was down 0.7 points at 1,329.95 while the Nasdaq Composite was 2.56 lower at 2,268.92.
Turning to UK equities, banks remained the major story. HBOS fell to its lowest in five years and was the FTSE 100's biggest loser, off 39-1/2 at 564, extending its losses after poor numbers last week, with Bear Stearns cutting its rating to 'peer perform' from 'outperform'. The broker highlighted that funding pressures continue to impact HBOS's performance.
Elsewhere in the sector, Royal Bank of Scotland fell 16 to 369, and Barclays gave away 13-1/2 to 463-3/4. Alliance & Leicester was down 31 at 532-1/2.
HSBC, however, bucked the trend, and was still at the top of the FTSE 100 leaderboard midafternoon, up 20-1/2 at 786-1/2. The UK's biggest bank delivered a 10 pct increase in full-year profit, with a strong performance in Asia helping to offset a sharp rise in bad debt charges at its troubled US division.
'North America has been even worse than expected, but on the other hand Asia has perhaps done even better,' said Simon Willis, banks analyst at stockbroker NCB, who has a 'reduce' stance on the shares. 'We think there's still a lot of pain to come through in the States.'
Elsewhere, Pearson lost 15-1/2 at 650-1/2 after concerns about prospects for the publisher's US-based education business overshadowed better-than-expected full-year results and a generally positive outlook for 2008.
Still on the downside, weekend press reports suggest Rentokil's under-fire chief executive, Doug Flynn, is secretly preparing the group for a break up after this week issuing its second profit-warning in the space of two months.
The shares were down 1 penny
Oils also played their part in dragging the FTSE lower, despite crude prices near record levels. Brent for April delivery was recently trading up 1.38 usd at 101.48 a barrel.
BP was down 8 pence at 538. Royal Dutch Shell was off 30 at 1,751, and Cairn Energy fell 16 at 2,601.
Turning to the second liners, Close Brothers lost 33 at 626, after reporting a 2 pct drop in its first-half profit, held back by the credit crunch, it said it had decided not to break itself up or return cash to shareholders following a strategic review.
The shares fell sharply on Friday after the company said takeover talks had ended.
Bradford & Bingley was hurt by the banking gloom, and was the biggest midcap faller, midafternoon, down 22 at 203.
A broker downgrade helped push shares in Moneysupermarket.com 8-1/2 lower at 129-1/2, with UBS cutting its rating on the group to 'neutral' from 'buy', while keeping its target unchanged at 140 pence.
The broker said that it had concerns on the group's performance of the money division in the near term.
On the 250 upside, WSP was 26 higher at 568-1/2, after the company unveiled full-year numbers ahead of expectations, with Altium Securities reiterating its 'buy' rating and 650 pence target and WH Ireland upgrading its two-year earnings estimates.
Meanwhile, a reassuring trading update lifted Game Group 5-1/4 higher at 191-1/2. Earlier, the company said it expects full-year pretax profit to be not less than 74 mln stg, slightly ahead of the 73 mln stg indicated previously.
Seymour Pierce retained its 'buy' stance on Game Group.
Higher full-year revenues and a 15 pct rise in dividends sent Keller Group up 13 at 610-1/2, while Senior added 2-1/4 at 101-1/4 following its own encouraging full-year numbers.
Engineering group GKN rose 18, or 6.8 pct, to 283 after Citigroup upped its target price to 295, from 285, while keeping a 'hold' rating.
Helphire regained some ground lost recently, up 18-1/4 at 190-1/4, as directors bought shares.
Finally, Cobham moved 5-1/4 ahead to 187-3/4, after it said it will earn up to 1 bln usd from the use of its products on Northrop Grumman aircraft, which have been selected by the USAF for the multi-billion dollar tanker programme.
In reaction, Merrill Lynch said the sales are worth about 3 pence per share and repeated its 'buy' view this morning.
brian.gorman@thomson.com
btg/slm
COPYRIGHT
Copyright Thomson Financial News Limited 2007. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
