London afternoon: Triple digit rise for Footsie

2nd Aug 2010 14:20

The Footsie is sitting on a triple-digit gain though the benchmark index has largely traded sideways since 9:30 this morning when the purchasing managers index (PMI) for UK manufacturing was released. The index showed that activity in British factories grew at a slower pace in July, but the decline was less than expected. The PMI reading slipped to 57.3 in July from 57.6 in June, versus expectations of a dip to 57.0.HSBC has given the banking sector a lift. The global banking giant's pre-tax profit more than doubled to $11.1bn on a reported basis, while underlying pre-tax profit rose by 30% to $9.6bn/ Loan impairment charges and other credit risk provisions tumbled by $6.4bn to $7.5bn, the lowest level since the start of the financial crisis. Royal Bank of Scotland and Lloyds Banking rise in sympathy.The best performer, however, is Intertek, the provider of quality checking and safety services. The company upped its full-year revenue forecasts as it reported a 3.3% rise in half year profits. The group now expects to achieve 2010 organic revenue growth of mid single digits with a broadly similar margin compared to 2009, and as markets recover further it anticipates to return to high single digit organic growth rates. British Airways is due to start new discussions with the Unite union today in a fresh attempt at resolving the long-running and expensive dispute with cabin crew. The stock is flying high after both Citigroup and Royal Bank of Scotland raised their price targets for the airline. Citi raised its target price by 12p to 295p after expressing 100% confidence in British Airways' joint venture with American Airlines going ahead. The bank thinks the synergies in the joint venture are worth 25p per share.While most miners are going well Randgold Resources is one of the rare FTSE 100 stocks in the red. The gold miner revised production guidance for its Loulo gold mine in Mali downwards following what it called a 'difficult quarter.' The miner said processing throughput was affected by a series of power outages that exacerbated the impact of downtime resulting from the bedding down of the Loulo plant expansion project.Property group Hammerson reported a 7% rise in half year profit as its markets continued to recover from the recession over the first half of 2010, but cautioned that the outlook remains uncertain. British Land and Blackstone Group have signed leases with Swiss bank UBS to develop a new 700,000 sq ft building on the site of 4 and 6 Broadgate, in the City of London. Engineering contractor WS Atkins is buying Florida-based professional services firm PBSJ Corporation for $280m (£178m) in cash following a first quarter that went as planned. Trading in the first quarter is reported to have been in line with expectations.Business process outsourcing specialist Xchanging warned that revenue growth for the full year will be slightly lower than previously anticipated. "Our customers remain cautious and we have seen further slippage in time scales for closing deals in the second half of the year. Therefore, the completion of further large new deals in 2010 will be challenging," said the group. The raid on staff at Tullett Prebon by rival BGC in the second half of last year cost the inter-dealer broker 7% in revenue during the six months to June, but it still expects a "good" outcome for the year. First half revenue of £475.8m was down 8% from £517.9m a year ago as the broker defections in North America caused a 30% slump in fixed income revenue to £132.7m. Senior, the manufacturer of high technology components and systems, said 2010 adjusted pre-tax profit are anticipated to be comfortably ahead of market expectations. In the first half, adjusted pre-tax profit rose to £32.5m compared with £23.5m last year, while revenue was slightly higher at £287.7m from £275.9m last time.Heritage Oil is to pay a special dividend of a £1, at the top end of estimates, following completion of the sale of its interests in Uganda to Tullow.Not much has changed at specialised technical products distributor Diploma since its 8 July trading update, but that's good news, as the upward trend in trading activity has been maintained. Underlying revenues for the ten months ended 31 July 2010, after adjusting for currency effects and acquisitions, increased by around 8% against the comparable period last year.Racecourse owner Arena Leisure is trailing the field after it said pre-tax profit fell 15% during the first half of the year and highlighted concern about the reduction in Levy spending in 2011.Speciality chemicals supplier Elementis reported better than expected half year profit and it expects to make progress throughout the rest of the year.XP Power shares have broken above £7 for the first time after the firm which makes power control components for the electronics industry set new records for revenue, gross margins and earnings per share in the first half of 2010.