London open: Footsie charges higher

1st Nov 2010 08:32

High demand for banks and miners got the week off to a good start, offsetting weakness in the outsourcing sector. Banks are going well as trading updates loom. Lloyds Banking Group is getting ready for tomorrow's statement with a 2% jump, while Royal Bank of Scotland and HSBC are also making up ground ahead of Friday's releases.Miners are also making the difference Monday. Rising metal prices have lifted Kazakhmys, Xstrata, Fresnillo, Lonmin, ENRC, Rio Tinto and Randgold onto the blue chip leader board. Smiths Group is higher on hopes the latest Al Qaeda bomb threat will increase demand for its cargo-scanning equipment. BG Group, the oil and gas giant due to declare third quarter results this week, is to get cracking on its Queensland Curtis Liquefied Natural Gas (QCLNG) project after receiving government clearance.Serco is unloved after news broke that the company that runs prisons, nuclear facilities, schools and ports for the government wrote to suppliers warning them that they risked losing future contracts unless they paid a 2.5% "cash rebate" on work this year. Rival outsourcer Capita is down in sympathy.Pumps manufacturer Weir is also lower despite expecting to beat full-year profit forecasts thanks to high demand for its equipment from the mining and oil exploration sector and stronger than expected aftermarket activity. The company said it continued to perform well in the third quarter, reporting improving order trends across the Minerals and Oil & Gas divisions. A bullish update from Elementis has the mid-cap speciality chemicals group up sharply. It expects to make more money than expected this year as a swell of activity in the oil and gas sector helped the speciality chemicals supplier lift sales by 11% in the third quarter.Underlying operating profit for paper and packaging group Mondi was on the up in the third quarter, both on the preceding two quarters and in comparison with the same quarter of 2009. despite only a marginal increase in turnover. Net debt was reduced to€1,536m at the end of September from €1,632m three months earlier.Xchanging, the business process outsourcing specialist, is still seeing pressure on activity levels due to economic conditions and some customers remain cautious in this uncertain market. For the full year, revenues and profits are in line with current market expectations. Falkland Islands oil explorer Desire Petroleum has failed to reach target depths in the first wireline logging run at its 14/15-1Z sidetrack well on the Rachel prospect. "Due to wellbore stability issues through the deviated section of the wellbore (forty degree hole inclination) it was not possible to reach the target depths in the first wireline logging run," it said in a short statement Monday.Chrysalis could be taken over after the record company confirmed it is in talks with a number of interested parties. Talk over the weekend was that veteran music tycoon and Chrysalis founder and current chairman Chris Wright was likely to do a deal with someone like Bug Music or Imagem Music.Cosalt, the struggling provider of safety equipment to the oil industry, confirmed this morning it has received an approach for its marine business. "These discussions are not sufficiently advanced for there to be any certainty that a transaction would be concluded or as to the price and other terms upon which it would be concluded," the firm said in a brief statement.