London close: BAE dives after contract setback

After dithering for much of the day London ended in arrears, falling for the second day in succession. A weak opening by Wall Street sent the Footsie into decline in the afternoon session and a late swoon by BAE Systems ensured there was no way back to the high ground for the blue-chip index. Shares in BAE Systems dropped after the defence group failed to secure a follow-on contract for the production of vehicles for the US Department of Defense (DoD).Miner Kazakhmys surprised the market with an upbeat trading statement in which it said its copper production is expected to exceed the company's annual target of 300 kt given additional 15 kt produced from stockpiled material. Kazakhmys saw half-year pre-tax profits slide to $645m from $886m on revenues that dived to $1,648m from $2,838m the year before.The rest of the mining sector was coated in gloom, however, with Xstrata, Lonmin, ENRC and Vedanta the worst affected. Property group Segro gave back some of its recent gains today after revealing interim losses grew to almost half a billion pounds. The firm recorded a pre-tax loss of £493.3m for the six months ended 30 June, more than last year's £315.3m deficit. Property losses hit £514m after a valuation deficit of £492m. Broker KBC Peel Hunt downgraded the shares from 'buy' to 'hold'.Elsewhere in the property sector Rugby Estates was wanted after a first half loss before tax of £2.2m that was an improvement on last year's interim loss of £5.95m.Engineer and project manager AMEC retreated. It reported a slight fall in pre-tax profits due to one-off items but said trading remained robust in a tough trading environment. In the six months to June 30, pre-tax profits fell 4% to £88.4m, as revenues edged up slightly to £1.260bn from £1.255bn.A 4% drop in full-year profit at Diageo was pretty much in line with expectations, but the alcoholic drinks giant has cut current year growth targets. The group, responsible for the Smirnoff, Captain Morgan and Guinness brands, said pre-tax profit fell £78m to £2.015bn in the year ended 30 June on reported sales up 15% to £12.28bn. Net sales rose to £9.31bn from £8.09bn.Carillion's large portfolio of Public Private Partnerships (PPPs) helped the support services company post a rise in profits and revenues in the six months to June 30. Pre-tax profits climbed to £51.9m from £27m over the same period the previous year as revenues rose to £2.72bn from £2.41bn.Online gaming firm 888 Holdings saw profits slide in the half year and said it is trading "solidly" despite consumer sentiment remaining weak and currencies still volatile. Pre-tax profit for the six months slumped to $14.9m from $26.3m driven by the decline in foreign currency effect and the economic downturn, which hit turnover down to $117.8m from $131.5m.National Express says a consortium, which includes CVC Capital Partners and the Cosmen family, is prepared to pay 450p a share in cash for the bus and trains operator. The revised proposal comes after the Takeover Panel declared a deadline for bids of 11 September to bring an end to speculation about the firm's destiny.Profit tumbled by 30% at Arriva's UK rail business in the first six months of 2009 due to slowing passenger growth and a £2m hike in fuel costs. The trains unit made an operating profit of £10.4m in the six months ended 30 June, down from £14.8m in 2008. Revenue dropped over 9%.IMI was wanted after interim results that were not as bad as feared. The engineering company saw adjusted profit before tax dip 24% to £86.4m in the first half of 2009 from £114.2m a year earlier.Mining group Peter Hambro was on traders' buy lists after announcing underlying earnings before interest, tax, depreciation and amortisation of $111m, up from $60m in the first half of last year. Premier Oil suffered a 62% slump in first half profit, but says it is on course to hit its new medium-term production target. Profit before tax tumbled to $72.6m for the six months to 30 June 2009 from $190.5m in 2008 as lower oil prices dragged revenue down to $213.9m from $385.8m.Speciality plastic and fibre products supplier Filtrona advances after announcing a 4.2% fall in adjusted profit before tax at the interim stage of £25.3m, down from £26.4m in the first half of last year. Shares in estate agent Savills were for sale after pre-tax profits all but disappeared in the first half of the year. Profit before tax slumped to £0.1m from £33.4m the year before. Fund manager Henderson reported a 47% drop in first-half profit but said it should benefit from a bigger contribution at its New Star business in the second half.Oil service firm Hunting saw profits rise for the half-year due to higher interest income and cheered shareholders by raising dividends by 21%. A big increase in investment returns helped underwriter Chaucer quadruple half-year profit, much better than predicted. Profit before tax for the six months ended 30 June leapt to £17m from £3.9m a year ago as the company's investment portfolio generated a return of £34.6m, up from just £1.5m in 2008.Computacenter, the IT infrastructure services provider, saw profits rise for the half-year despite revenues slipping 2.2% due to the challenging economic conditions. The group said it made profits of £12m, up 9%, due to cost reduction, growth in contractual services and exiting from businesses that used capital inefficiently.Long suffering shareholders in slumping Magners cider maker C&C got some good news when the company said operating profit for the current year will be at the top end of market expectations.FTSE 100 - RisersSmith & Nephew (SN.) 533.50p +4.61%Invensys (ISYS) 271.50p +3.67%Centrica (CNA) 246.30p +3.01%Kazakhmys (KAZ) 937.00p +2.13%Barclays (BARC) 368.90p +1.63%International Power (IPR) 285.00p +1.46%Pennon Group (PNN) 467.70p +1.28%Scottish & Southern Energy (SSE) 1,124.00p +1.26%FTSE 100 - FallersBAE Systems (BA.) 306.00p -5.56%Xstrata (XTA) 792.00p -4.06%Diageo (DGE) 956.00p -4.06%Amec (AMEC) 746.50p -3.99%Lonmin (LMI) 1,414.00p -3.87%Lloyds Banking Group (LLOY) 104.70p -3.48%Eurasian Natural Resources (ENRC) 830.00p -3.43%Vedanta Resources (VED) 1,768.00p -3.39%