London midday: Retail sales give a boost

20th Aug 2009 12:10

July's retail sales figures have given a lift to an already buoyant equity market. Figures revealed sales grew 0.4% from June, putting the annual increase to 3.3%, the highest since May 2008. Economists had predicted a rise of just 0.2% for July following June's 1.2% gain and a 2.7% year-on-year improvement.It is miners, not retailers, that are setting the pace however, with investors encouraged by the latest US oil inventories figures which suggest that the US economy may be recovering faster than previously thought. The US Energy Department said inventories fell by more than 8m barrels last week,Mining giant Rio Tinto is higher despite seeing profits falling by more than half in the six months to June 30 as it felt the impact of sharply lower commodity prices amid tough economic conditions globally.Pre-tax profits for the period totalled $4.39bn, compared with $9.82bn over the same period the previous year, as sales fell to $19.52bn from $30bn.Sterlite Industries, a subsidiary of Indian miner Vedanta Resources, is to increase its offer terms for the purchase of most of the assets of Asarco LLC. The purchase price is being upped by $500m to around $2.1bn.Elsewhere in the sector Lonmin, Xstrata, Antofagasta and Anglo American all advance strongly. Tesco Personal Finance (TPF), the banking arm of supermarket top dog Tesco, is to create more than 800 jobs in Glasgow with the opening of a new customer service centre.Bus and rail operators are in the red after the Office of Fair Trading said it would refer the local bus industry to Competition Commission after finding evidence that limited competition could be leading to higher prices for bus users.Major operators Arriva, Stagecoach, Go-Ahead, First Group and National Express control most of the bus services.Support services group Carillion said its joint venture with technology services firm Telent has signed a letter of intent with BT's Openreach for a support services contract worth in the region of £1bn.Building products group SIG posted a sharp fall in profits as weakness in the construction market persisted into the first half of 2009. Pre-tax profits in the six months to June 30 fell to £15.4m from £48.5m over the same period the previous year as revenue fell to £1.34bn from £1.44bn. Spirax-Sarco saw interim profits tumble 28% as higher impairment charges and challenging trading conditions weighed. Pre-tax profit fell to £30.2m from £41.9m on sales in the half year that rose 5% to £251.6. At constant exchange rates, sales declined 8% against a comparatively strong first half of 2008. The interim divi has been raised 5% to 10.5p.Wellstream, pipeline products maker for the oil and gas industry, saw half-year profits slide and revised its short term expectations as the timing of awards for production slows.Cinema operator Cineworld served up an increase in half year pre-tax profit and said the second half has started very well. Profit before tax increased to £11.6m for the 27 week period ended 2 July 2009 from £8.7m the year before.Brambles, the world's biggest supplier of pallets, posted a fall in profits as weakness in the global automotive industry and other sectors hit demand for its products.Marketing software provider smartFOCUS is to launch a localised version of its software in the Japanese market.Shares in Capital & Regional plummeted more than 45% after the property fund manager reported a half-year loss and announced a £69.2m capital raising. The group said it intends to raise the cash through a placing to new cornerstone investor Parkdev and an underwritten placing and open offer to ordinary shareholders.East Russia-focused exploration and development company Amur Minerals pleased shareholders with details of a reserves estimate that it has submitted for regulatory approval. The total contained metal value for its Maly Krumkon (MK) deposit is $1.8bn, the company said. This figure is based on the current spot market prices of $20,000 per tonne ($9.07 per pound) for nickel and $6,200 per tonne ($2.81 per pound) for copper.FTSE 100 - RisersLonmin (LMI) 1,448.00p +4.62%Xstrata (XTA) 806.00p +4.47%Sage Group (SGE) 222.70p +4.07%WPP Group (WPP) 491.80p +3.95%FTSE 100 - FallersDiageo (DGE) 934.00p -0.90%British American Tobacco (BATS) 1,858.00p -0.48%Capita Group (CPI) 664.00p 0.00%Inmarsat (ISAT) 495.20p -0.00%