London afternoon: Rally runs out of steam

11th Mar 2011 14:29

An attempt at continuing the late-morning rally fizzled out over the lunch time session, but prices are not as soft as might be expected given the array of bad news out there, such as the Japanese earthquake, the Libyan situation and the continuing concerns about European sovereign debt.The insurance sector has been hit by worries over the possible effects of the Japan earthquake. RSA, Legal & General and Prudential are suffering losses, as are Lloyds underwriters such as Amlin and Catlin. The damage caused by the earthquake and possible after-effects are difficult to assess at this stage.Meanwhile, the soaring oil price is having its usual effect of damping demand for shares in cruiser operator Carnival .Turning to company news, bus and train group FirstGroup is prominent among today's fallers. It remains on track to hit full-year to earnings and cash targets, but warns it's been a bumpy journey for the school bus business. The UK Bus division is expected to deliver like-for-like (LFL) passenger revenue growth for the year of 1.4%, while the UK Rail unit has performed above expectations, and is set to deliver LFL passenger revenue growth of 5.1%. Pub group JD Wetherspoon posted record interim sales but profits fell as a 'pernicious combination of increasing taxes and regulation', higher costs and higher interest charges took their toll. The shares are higher nevertheless. Pre-tax profits for the six months to 23 January fell 11% to £32.2m, in line with market forecasts. There is to be a new senior number cruncher at property giant British Land after finance director Graham Roberts announced his intention to stand down from the board at the end of June. Roberts spent nine years in the role. His replacement will be the deputy finance director, Lucinda Bell.BP has moved to improve its green credentials with the purchase of Brazilian ethanol and sugar producer Companhia Nacional de Açúcar e Álcool (CNAA) for $680m (£421m). The acquisition is the oil giant's biggest ever in the alternative energy sector.While many recent company updates have pointed to further pressures on the consumer as the after-effects of the recession kick-in, those that cater for the high-end of the market appear untouched so far.Expensive cooker maker AGA Rangemaster dished up a big increase in profits last year as sales picked up during the second half. Profit before tax swelled to £19.9m from £0.5m the year before, though £16.3m of that was down to a one-off curtailment gain after the firm froze final salaries in the pension scheme. No problems with recession for the rich and famous or their suppliers such as posh handbag and accessory maker Mulberry, which now expects to beat market forecasts for the current year. The shares are up 11%.Floor coverings group Headlam grew profits by over 13% in 2010 and has enjoyed a positive start to 2011. Profit before tax rose to £25m last year from £22.1m in 2009 on revenue up 0.4% to £535.7m, a good effort, Headlam said, given that indications were market size would keep falling.Trendy sportswear retailer JD Sports Fashion has decided not to make an offer for its struggling rival JJB Sports. JD said it had asked JJB for details of a proposed restructuring of JJB's property portfolio through a company voluntary arrangement, but that it "received no further information whatsoever from JJB Sports."Stockbroker and financial services firm Cenkos Securities underwhelmed the market with its final results, despite revenues rising by 31%, as it announced that this year's annual dividend would be 20% lower than last year.