London afternoon: Footsie lower on weak US

20th May 2010 14:24

Futures pointing to a sharp dip in US markets early on knocked blue chips in London as the afternoon session got underway.Rio Tinto leads the miners lower after Bank of America Merrill Lynch removed the stock from its "Europe 1" list and downgraded the stock to "neutral" from "buy". The broker said that things are looking bleak for the miners in the short term as China moves to cool down its housing market.Utilities are also getting it in the neck, particularly gas and electricity pipeline grid operator National Grid. The group announced a fully underwritten rights issue to raise £3.2bn as it posted a 57% rise in full year profits. Pre-tax profit for the year rose to £2.19bn from £1.39bn before thanks to lower operating costs. Revenue fell to £13.98bn from £15.62bn before,Scottish & Southern Energy, meanwhile, is hitting the low road after Exane BNP Paribas downgraded the electricity producer to "neutral".South African brewer SABMiller is going down faster than the beer it brews despite reporting improved full-year figures with Latin America driving growth in the company's profits. EBITDA increased to $4,381m in the 12 months to 31 March from $4,129m on revenue of $26,350m, up from $25,302m.Oil explorer Cairn Energy is higher as it prepares a four well exploration programme in Greenland for this summer. The group also said the average gross field production for the first quarter totalled 74,486 barrels of oil per day. The average realised price per barrel of oil equivalent for Q1 2010 is $62.88.Oil giant BP is also wanted as it finally seems to be getting to grips with the oil spill in the Gulf of Mexico. The company said it is diverting about 3,000 barrels of oil a day into a drill-ship via a mile-long tube inserted into the broken MC252 oil well following the Deepwater Horizon disaster in the Gulf of Mexico. The group has also skimmed some 187,000 barrels (7.8 million gallons) of oily liquid from the surface of the water.International specialist bank and asset manager Investec announced improved earnings and substantially higher assets under management for the year to 31 March. Operating profit before tax rose 8.9% to £432.3m from £396.8m the year before while earnings attributable to shareholders climbed 15% to £309.7m from £269.2m.British Airways passengers face a new wave of walkouts by the airline's staff after a court overturned an injunction blocking a series of strikes. "Despite the obvious enthusiasm of colleagues here, this is not a moment for being triumphant. We shouldn't have been in this process. The case brought by BA was trivial," Unite's Derek Simpson said outside the court. In the FTSE 250, pubs operator Marston's reported a rise in first half profits and said it was confident of meeting expectations for the full year. Profit before taxation and exceptional items was £27.8m in the 26 weeks ended 3 April, 0.4% ahead of last year. Revenue also rose slightly to £309.2m from £307.5m last time.Cash and carry wholesaler Booker reported a better than expected 21% rise in annual pre-tax profit and said it was expanding its presence in India.Waste management firm Shanks saw profits fall in a "challenging" year but still upped dividends by 76%.Kids' clothes and equipment retailer Mothercare said underlying full year pre-tax profit was little changed but international sales saw an impressive 21% rise.It's been a volatile week for the share price of Yellow Pages publisher Yell, which announced earlier this week that its chief executive John Condron and chief financial officer John Davis would be stepping down. Shareholders have something to shout about today, however, as the share price has surged on news of the acquisition of local reviews web site company Trusted Places. Yell plans to integrate the acquired company's reviews and technology into its Yell.com web site.The response to an acquisition by Rotork was less favourable. The manufacturer of electric, pneumatic and hydraulic valve actuators, is to buy Ralph A Hiller, a US designer and manufacturer of nuclear actuators, for $7.8m in cash.Pawnbroker H&T expects full year results to exceed current market consensus forecasts as a result of working capital improvements. Shares in Independent Media Distribution hit a new 52-week high after the TV and radio advertising company said profits this year have been significantly ahead of expectations. The company said that total revenue in the first four months of 2010 was 30% higher than in the corresponding period of 2009, with international sales twice what they were a year earlier.