London afternoon: Shares drift lower

Shares turned south over the lunchtime session though it is difficult to ascribe any of the losses to the impact of the Comprehensive Spending Review, much of which was widely as expected.Mining stocks are doing their bit to counteract the effects of Footsie stalwarts BAE Systems, Smiths Group and British Sky Broadcasting trading in ex-dividend form today.Rio Tinto has earmarked another US$3.1bn (£2bn) for its Pilbara operations, doubling new investment there just days after the company scrapped its iron ore joint venture with BHP Billiton. The mining giant, which is chipping in $2.1bn (£1.3bn) of its own money, says the move will increase annual infrastructure capacity to 283 million tonnes (Mt/a) during 2013.BHP put the disappointment of the collapse of the proposed $116bn iron ore collaboration with Rio behind it to issue an upbeat production update. It says most assets were operating at capacity in the first quarter, seeing a year on year increase in output for 11 commodities. Iron ore production in Western Australia rose 6% from a year earlier and by 2% from the preceding quarter. The board of mining titan Xstrata has given the thumbs up to the $710m of development of the second phase of Lion ferrochrome complex expansion in South Africa. Work will involve the construction and commissioning of a 360,000 tonne per annum capacity smelter and will increase the Xstrata-Merafe chrome venture's total ferrochrome capacity to over 2.3m tonnes per annum.Hochschild is still on track to achieve its 2010 production target after the Latin America-focused miner dug up 6.6 million attributable silver equivalent ounces in the third quarter. The company, which is aiming for 26.3 million ounces for the year, has already produced 19.4 million ounces in the first nine months of 2010.Medical devices maker Smith & Nephew gets a leg up from well received results from US rivals Stryker and Johnson & Johnson overnight. The company also benefited from a favourable court verdict in the US on a patent dispute with Kinetic Corporation.A fall of almost a third in profits at its Argos chain sent interim profits tumbling at retailer Home Retail with sales of furniture, TVs and video games all falling sharply. Underlying profits in the half year to August fell by 23% to £95m with pre-tax profits down from £117m to £103m. Sales fell by 3% to £2.72bn with like-for-like sales down 6.5% at Argos and 0.8% at Homebase, its other core business.Filtrona, the international supplier of speciality plastic and fibre products, saw solid revenue growth in the third quarter, in line with expectations. Revenue was 17% higher than a year earlier once the effects of the March disposal of the North American Plastic Profile & Sheet business is stripped out. On a constant currency basis the climb in revenues was 15%. The shares fell back, however, as traders took profits following a recent good run. Panmure Gordon, meanwhile, cut its rating on the shares from "buy" to "hold". Logistics group Stobart has cut its profit expectations for this year to the bottom of the market's range and is wary over prospects for 2011. "We have slightly reduced our full year profit expectations as a result of reduced spend by Network Rail and increased overall finance costs," it said.Another company lowering expectations was Hansen Transmissions, the wind turbine gearbox designer. The company has downgraded its total revenue guidance for the full year (fiscal 2011), and is now expecting turnover to be 10% lower than in fiscal 2010; previously the company had guided towards growth of between 5% and 10%.Sports Direct, owner of Sports World stores and the Slazenger and Dunlop brands, continued along the recovery trail in the July to September quarter but warned that the early part of 2011 looks like it will be "extremely challenging" for all retailers in the UK.Sandwich maker Uniq could be taken over by its pension fund to ease the big deficit in its scheme under a radical new plan put forward by the company. Under the proposal, Uniq's pension fund trustee will take a 90% stake in the company in return for wiping out the fund's £436m shortfall.Commercial electric vehicles manufacturer Tanfield says that its US associate company Smith Electric Vehicles US (SEV US) has paid $1m in return for an exclusivity period of 60 days to complete its merger with the UK-based Smith Electric Vehicles.The share price of sports and leisure equipment firm Tandem back-pedalled after the company said that tough trading conditions in September and October had made it wary about the group's prospects over the crucial Christmas trading period.