London afternoon: Stocks slide as Brown sides with Obama

22nd Jan 2010 14:43

Barely more than a dozen FTSE 100 constituents are showing rises as the market looks set to slide for the third day in succession, after dipping sharply following comments from Prime Minister Gordon Brown's spokesman that appeared to lend support to President Obama's hard line stance against excessive risk taking by banks.The spokesman said that although the government had not yet seen the full details of Obama's proposals, 'it's directionally something the prime minister feels very comfortable with."This development has done nothing for the fortunes of UK banking shares, which were already under the cosh following Obama's combative statement yesterday. Barclays and Royal Bank of Scotland are the big fallers in the banking sector but the biggest hits are suffered by the derivatives specialists such as ICAP, which clears billions of pounds worth of trades in its role as an interdealer broker. Rival Tullett Prebon is also lower while the LSE is also down.Engineer Invensys provides some cheer, after it said it still expects to achieve an improvement in performance in the current year. Invensys said operating profit before exceptional items in the third quarter was ahead of the corresponding period last year despite the continuing difficult economic climate. The group was behind 2008 levels at the halfway point at the end of September.Xstrata's copper division has upgraded a mineral resource estimate for its Horse-Ivaal-Trukai deposit at the Frieda River copper-gold project in Papua New Guinea. The mining giant, which assumed management control of the project two years ago, said the new resource estimate includes 'significantly' increased inventory and improved confidence levels, including a 26% increase in resource tonnage.Tullow Oil said its Kasamene-2 appraisal well, which is located in the Butiaba region of Uganda Block 2, has encountered 39 metres of net oil pay and 8 metres of net gas pay within a 132 metre gross interval. Mobile phone network giant Vodafone is doing its bit to shore up the Footsie after Morgan Stanley said worries about free cash flow at the company were overdone, given the company's guidance on this score 'are actually very conservative'.Defence and aerospace group Cobham has named National Express chairman John Devaney as chairman designate of the company. Devaney will succeed David Turner as chairman in May, by which time he will have given up his executive responsibilities at National Express.Acquisitive electronic sensors company Halma has beefed up its presence in the photonics market through the purchase of SphereOptics, a US manufacturer of precision products for use in light metrology applications. The company is initially paying $2.5m (£1.5m) for the New Hampshire based company. SphereOptics had revenues of $4.3m (£2.6m) in 2009.Merchant bank Close Brothers said it remains confident that it will deliver a good overall result for the first half and a solid outcome for the full year, but cautioned that this will depend on the prevailing economic environment and financial market conditions.Transport and logistics group Stobart is confident that it will meet its year end pre-tax profit expectations and deliver further value from its substantial asset base. Dragon Oil aims for stronger growth in 2010 after putting eight wells into production last year and anticipating completion of 11 wells over the next 12 months.Diamond prices continued their 'impressive' recovery in the fourth quarter, though they still lag behind 2008 levels, Gem Diamonds boss Clifford Elphick said.Household goods and engineering group Metalrax expects its performance pre exceptional items for the full year ended December to be slightly ahead of market forecasts.A day after it said it was resuming dividend payouts Russia-focused miner Petropavlovsk has launched a $300m bond issue. The company is offering senior unsecured convertible bonds due 2015 to international institutional investors at a probable coupon of 4%.