London afternoon: Cautious response to Pre-Budget

London's blue chips have reacted cautiously to the chancellor's pre-Budget speech even though the big numbers were better than feared.The government's borrowing forecast for this year came in ahead of market predictions with a slight upward revison to £178bn, while Alistair Darling stuck to his forecast of growth of 1-1.5% next year and 3.5% in 2011-12.Banks face a supertax on any bonuses paid this year above £25,000, while national insurance rises by 0.5% for anyone earning above £20,000 and there is a pay cap on public sector workers while a further £5bn of cuts are on the way for government departments.Royal Bank of Scotland and Lloyds have drifted lower after good gains early on, though Asia-focused bank Standard Chartered is now the best performer after an initially cautious welcome to its trading update. News of a credit rating downgrade for Spain has also unsettled the bank sector. Greece was downgraded yesterday.The bank is on course for a record year with a strong performance in wholesale banking offsetting lower income in consumer banking, while its exposure to Dubai is not 'material'.In a generally weak mining sector BHP Billiton is holding up reasonably well. It has sold its Ravensthorpe nickel mine in Western Australia to Canada's First Quantum Minerals for US$340m. Hedge fund manager Man is under the cosh pence after the net asset value of its flagship fund, Man AHL Diversified Futures, dived 4.3% in the week ended Dec. 7.Easyjet chief executive Andy Harrison is to stand down from the no-frills airline next June. In a statement, Easyjet said Harrison had indicated his desire to leave the company in order to seek new challenges. Boardroom strife has been dogging the airline for months after founder Sir Stelios Haji-Ioannou launched a fierce attack on the board's strategy.Pre-tax profits fell by more than a quarter at Stagecoach in the six months to October 31 after the rail and bus group was squeezed by reduced demand from recession hit travellers and high fuel costs. Figures were ahead of expectations, however, with profit before taxation down to £75.5m from £105.2m the previous year as revenues edged up to £1.08m from £1.05m.Defence and aerospace group Cobham has won a A$170m (£95m) contract to provide flights in support of the US oil company Chevron's operations in Western Australia.Spread bet firm IG Group expects report revenue of around £143m (2009: £126.5m) and adjusted profit before tax of around £77m (2009: £58.2m) for the first half of the year, but costs will be higher in the second half. Soaring demand for technology such as in-car navigation and mobile phones sent revenues and profits soaring at the chip designer Imagination Technologies in the six months to 31 October. A better than expected contribution from recent acquisitions Borland and Compuware enable legacy software specialist Micro Focus to lift underlying interim profits by 35% and predict a further improvement in profitability over the rest of the year. Department store group Debenhams is wanted after Merrill Lynch upgraded the stock to 'buy'. Adverse broker comment about yesterday's disappointing results sees video games retailer Game Group hammered again today. Shares Condor Resources slumped after the Central America-focused gold and silver miner began legal proceedings against the El Salvador government over its failure to respond to Condor's applications to renew its two mining licenses in the country.Pan Andean gained on news that the oil and gas group received a £18m takeover offer from Toronto-listed peer Petrominerales. Petrominerales has offered to buy the shares for 15 pence each plus one share of Hydrocarbon Exploration for every one Pan Andean share held.Mobile computer software firm Psion pulls out of the slump it has been in since its mid-November trading update after Charles Stanley initiated coverage of the stock with a 'buy' recommendation.