London afternoon: Greek riots rattle investors

5th May 2010 14:53

Footsie is now nursing a triple digit fall as the downward trend seen in the last hour of the morning session accelerated over lunch as US investors woke up to television footage of Greeks rioting in the streets.Civil unrest in Greece has sent the price of oil and metals into decline with a predictable effect on resource stocks. Miners Kazakhmys and Lonmin are sharply lower, as is oil company Tullow Oil.BHP Billiton manages to claw back some of yesterday's heavy losses that were suffered in reaction to the Australian government's proposals to introduce a new resource rent tax that is expected to hit mining companies that operate in Australia. Rio Tinto, which was also hammered yesterday, escapes relatively lightly today, as does oil giant BP, after Panmure Gordon said the share price reaction to the Gulf of Mexico oil spill has now been overdone. The broker has switched its rating on the stock from "sell" to "buy" and lifted its price target from 496p to 600p.Elsewhere in the mining sector Xstrata saw higher production in all of its main commodity businesses in the first three months of 2010. Ferrochrome production rose by more than 300%, coal production increased by 9% to 21.7m tonnes and mined copper production was 3% higher.Chilean copper miner Antofagasta said copper production in the first quarter was 117,700 tonnes, an improvement on the quarterly average for 2009 of 110,600 tonnes. Next has been on a good run since the beginning of March but profit takers moved in today even though it said this morning it expects profits this year will be at the top end of market forecasts after sales in the first three months to April were strong. The fashion retailer said it is still very cautious on the outlook for consumer spending.Budget pub chain JD Wetherspoon is another company cautious about the consumer outlook after seeing a 0.8% dip in like-for-like sales in the 13 weeks to April 25. That was sharper than the 0.2% fall in sales seen over the 39 weeks to 25 April. Total sales were up by 3.6% during the 13-week period, short of the 4% rise over the 39 weeks. The shares have fallen out of bed with a bump today, dragging the likes of Enterprise Inns, Greene King and Mitchells & Butlers with them.Insurer Legal & General (L&G) increased sales by 2% during the first quarter and by 18% over the previous three months and says it's on track to deliver £600m of cash in 2010. Worldwide new business on an annual premium equivalent (APE) basis rose to £388m in the three months to 31 March from £382m a year earlier and £330m in the fourth quarter of 2009.L&G's sector peer, Prudential, meanwhile, has had to postpone publication of its prospectus detailing the terms of its $20bn rights issue to fund the $35.5bn acquisition of AIG's Asian (AIA) businesses. The UK firm was due to release its timetable today, but it's still in discussions with the City regulator about the takeover, especially the capital position of the enlarged group under the Insurance Groups Directive (IGD). Better control of costs enabled accountancy software giant Sage to post a healthy rise in interim profits, though sales fell again albeit a slower rate than this time last year.Software group Logica saw some positive trends during the first quarter, but still expects revenues to fall "modestly" in the first half and remain steady for the full year. Property website Rightmove said it is confident of meeting its improved expectations after a strong start to 2010.Lower room rates helped Millennium and Copthorne fill up its hotels in the first quarter, resulting in an improvement in profits and revenues.Eastern Europe focused JKX Oil & Gas has started the year positively with good progress made on all development and exploration assets during the first quarter, but the shares fell today as oil prices slid again.Property company Liberty International's last trading update before its planned split into separate companies was a relatively upbeat affair. 'We have seen a much lower level of retailer failures than the first quarter of 2009,' the company said.Miniature war games company Games Workshop moves up a level after it said full-year pre-tax profits are likely to be ahead of current expectations.