London afternoon: Defensives in favour as stocks slide

6th Jul 2009 14:26

Footsie is halfway to a triple digit fall as resource stocks drag the market lower, with many pundits suggesting that the market may have bounced back too far since it reversed course in March.Declining metal and oil prices are taking their toll on resource stocks. Copper miners Lonmin and Kazakhmys are among the big fallers, despite both stocks being upgraded by Deutsche Bank from "sell" to "hold". Mining giant Rio Tinto has further cut its debt pile with the sale to US packaging firm Bemis of the US food packaging division of aluminium subsidiary Alcan for $1.2bn. Oil and related businesses are also down with Wood Group, Cairn Energy and Tullow Oil all off the pace.Defensive stocks are back in favour with tobacco companies BATs and IMPs on the rise along with household goods firm Reckitt Benckiser.British Airways suffered a blow today as staff rejected plans to cut as many as 4,000 jobs and freeze pay. Over 2,000 employees got together at Kempton Race Course to vent their anger at proposals to freeze wages for two years and scrap some allowances and benefits.Budget airline easyJet carried 0.8% more passengers in June than the same time last year, although the load factor eased 0.6% to 86.3%. The increase wasn't as impressive as May's 1.8% jump, but the carrier still ferried almost 4.15m people around last month. Passenger numbers for the past 12 months are up 7.9% year on year.Price comparison web site Moneysupermarket.com is trading in line with expectations, with little change in performance levels since the company's statement in April. The company said in April that trading had stabilised after a sharp drop in revenues in the first quarter. JJB Sports is looking at raising up to £50m, including a possible share issue. It's mulling the sale of further non-core assets, an extension in the maturity date of its working capital facility beyond September 2010, and a possible placing and open offer. Utility company United Utilities has extended the AMP4 framework contract with a joint-venture comprising Costain, Atkins and Galliford Try to cover the next upgrade phase for the water industry. The extension for the AMP5 framework will run from 2010 to 2015 and consists of £400m of capital works in the north west of England, most of which will be improvements to existing water processing plants.Digital TV set-top box maker Pace is delivering the strong operating performance expected by the board. It said in April that it was seeing increased demand across many of the group's global markets, with the firm increasingly becoming the supplier of choice for many of its payTV operator customers.Housing repairs group Mears said the level of opportunities for its social housing division have never been higher after the group bagged three new contracts. The group's social housing division has been awarded £64m of new contracts, with options for a further £20m.Hazardous waste management firm Augean confirmed that it is no longer in talks with any party about a possible offer after One Fifty One pulled out of bid talks. Energy meter provider Bglobal shot up after it launched a new campaign for business customers seeking to comply with UK Government directives on carbon reduction.San Leon Energy says a "significant" discovery of natural gas in the Palo Pinto County, Regular (Gas) Field, District 07B, Texas, will produce at commercial rates.