London midday: Banks get battered

2nd Dec 2009 12:11

After yesterday's strong gains, equities come off the boil today with banks, in particular, getting hammered, on enduring fears over exposure to Dubai debt.Royal Bank of Scotland (RBS) and Lloyds Banking are the big fallers among blue-chips, while elsewhere in the banking sector Barclays is also on the slide. RBS is also under fire on the home front, with newspaper reports suggesting that the government has insisted on setting guidelines for bonus payments within the bank.Also undermining Footsie's performance are some big hitters going ex-dividend today. They include National Grid, Severn Trent, LSE and AB Foods.In a buoyant mining sector that sees ENRC and Kazakhmys going well, India-focused miner Vedanta gets an additional lift from a 'buy' recommendation by Goldman Sachs. Anglo American, however, is downgraded to 'neutral' by the US bank. Lonmin, meanwhile, is raised to 'buy' by Investec, which also upgrades its price target for FTSE 250 miner Aquarius Platinum. Broker comment also lifts mobile phone networks giant Vodafone and oilfield services group Amec. Credit Suisse has upped its Vodafone target price from 150p to 160p while Evolution Securities has upgraded Amec from 'add' to 'buy'.Newcastle-based accountancy software firm Sage upped its dividend and said conditions have stabilised in the second half. The total dividend has been increased by 3% to 7.43p per share (2008: 7.21p per share). The group said the rise is reflecting the strength of cash flows and its robust business performance.In corporate news, Irish budget airline Aer Lingus is closing down loss-making routes and will start making compulsory redundancies after failing to reach a deal with the unions over cost savings. The carrier said it had "narrowed the gap" with most union groups, but had met stiff opposition from unions representing pilots and cabin crew.Stockbroker and fund manager Brewin Dolphin saw profits slide in the year to September 27 after one of the most tumultuous periods for the financial services industry. Pre-tax profits fell to £21.9m from £32m, even as total income climbed to £212.3m from £206.5m.Rival Numis slumped to a loss of over £10m last year as write-downs on its investment portfolio and fewer company listings took their toll. Brewer Greene King is up again on favourable comment after yesterday's results. Carillion said the City of Toronto has appointed Carillion Canada as construction manager for the revitalisation of the City's Union Station, a 5-year project valued at around £360m. Regeneration developments around the 2012 Olympics site helped Telford Homes, which builds homes in East London, buck the general gloom in the housebuilding sector to post a surge in profits. In the six months to September 30, Telford posted a rise in pre-tax profits to £6.5m from £0.3m on revenues that climbed to £85.9m from £35.6m. The strong results prompted it to reinstate its dividend payment at 0.75p.FTSE 100 - RisersEurasian Natural Resources (ENRC) 919.50p +2.28%Sage Group (SGE) 219.50p +2.24%Kazakhmys (KAZ) 1,306.00p +2.03%Autonomy Corporation (AU.) 1,465.00p +1.60%Lonmin (LMI) 1,880.00p +1.57%Vedanta Resources (VED) 2,421.00p +1.47%Serco Group (SRP) 529.50p +1.44%Vodafone Group (VOD) 141.95p +1.39%Cobham (COB) 234.50p +1.30%Amec (AMEC) 822.00p +1.29%FTSE 100 - FallersRoyal Bank of Scotland Group (RBS) 32.00p -6.61%Lloyds Banking Group (LLOY) 51.74p -4.43%Legal & General Group (LGEN) 75.00p -3.04%National Grid (NG.) 650.00p -2.69%London Stock Exchange Group (LSE) 745.00p -2.61%Severn Trent (SVT) 1,022.00p -2.57%Cairn Energy (CNE) 3,067.00p -2.51%Resolution (RSL) 82.70p -2.25%Barclays (BARC) 290.30p -1.94%Prudential (PRU) 625.50p -1.81%