London midday: Miners pull index lower

29th Oct 2010 11:52

Weak miners and a poor reception to results from British Airways have discouraged buyers generally, despite some encouraging news on the consumer confidence front.GfK NOP's consumer confidence index improved to -19 in October, confounding economists' expectations of a slide to -22 or even lower. The survey was taken before the announcement of the government's comprehensive spending review, and showed that respondents were more confident about the prospect for their own personal financial predicament in the next 12 months, even though the survey also showed a decline in confidence about the prospects for the economy as a whole over the next year. British Airways is lower even though it swung to a profit in the first half as the airline improved yields and cut costs. It made a pre-tax profit of £158m in the six months ended 30 September compared a loss of £292m a year ago. Revenue jumped 8% to £4.45bn due to improved yields.WPP was also upbeat. The ad giant upped like-for-like revenues by 4.1% in the first nine months of its current year as companies restarted advertising spending after the recession with traditional ad spending outstripping online. Total revenue rose by 6.3% to £6.69bn with third quarter sales up 12.2% to £2.3bn. Operating margins also improved over last year. Numis Securities responded to the update by lifting its price target for the stock from 864p to 875p.Metal prices are on the wane today and as usual that means mark-downs for the mining shares. Xstrata is the sector's worst performer after its subsidiary, Xstrata Zinc, said its A$274m ($246m) expansion of the George Fisher mine to grow the production rate by almost 30% from 2013 has been approved by the Queensland Government.Elsewhere in the sector Antofagasta, Rio Tinto and Anglo American are the next hardest hit after Xstrata.Oil company BP has received a lift from an official US commission report into the fatal explosion at the Macondo well in the Gulf of Mexico, which said that US oilfield services contractor Halliburton was culpable for the use of a sub-standard cement mixture on the well. The report did not absolve BP, as owner of the well, of all blame relating to the use of the cement, but the verdict suggests that BP alone will not be asked to carry the can for the Gulf of Mexico tragedy.AstraZeneca will receive a $100m upfront payment from Daiichi Sankyo after agreeing a deal for the co-promotion and supply of Nexium, a proton pump inhibitor, in Japan. The Anglo-Swedish drugs giant will co-promote the product, used to treat gastroesophageal reflux disease (GERD) and stomach ulcers, once it is approved for use in Japan, making and developing the product, while Daiichi Sankyo will deal with distribution. Fund manager F&C Asset Management halted the recent outflow of funds in the past three months, but cautioned business may be weaker to the end of the year. Assets under management rose to £108.2bn from £95.3bn at the end of June. "While we are making good progress in our institutional business..., institutional asset flows remain lumpy from quarter to quarter. After a strong third quarter we currently anticipate weaker headline institutional asset flows in the fourth quarter," FCAM said.Hikma Pharmaceuticals becomes the second largest injectables supplier in the US after agreeing to pay $112m (£70m) in cash for Baxter Healthcare's generic injectables business. Oil services group Hunting expects to exceed current full year market expectations after trading remained very strong between July and October.