London midmorning: Buoyant miners keep Footsie higher

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Date: Monday 30 Jun 2008

  • Market Movers
  • techMARK 1,348.40 -0.13%
  • FTSE 100 5,542.70 +0.23%
  • FTSE 250 9,098.60 -0.07%

LONDON (ShareCast) - Footsie is still higher with miners helping to keep the index out of the red on strong metals prices.

Rio Tinto leads the way and fellow miners BHP Billiton, Xstrata and Vedanta are among the top 10. Copper prices rose in Shanghai, heading for their best half-year gain since 2006.

Oil prices are higher too and help put fuel-guzzling British Airways in the bottom 10.

Some poor performances from mid-cap stocks are also weighing on sentiment.

Southern Cross is the worst culprit with the care home group shedding over 70% of its value on the back of a warning over a bank covenant, poor trading and the departure of its finance director

Taylor Wimpey is also lower as it announced write-offs of £660m and confirmed it is talking to shareholders over a placing and open offer. Other builders are down in sympathy led by Barratt.

Trinity Mirror is another casualty on a warning that full-year operating profits will be some 10% lower than forecasts as advertising market conditions continue to deteriorate.

JP Morgan has slashed its target price on Yell Group to 92p from 510p, citing weak economic conditions in the UK, US and Spain and debt concerns.

Goldman Sachs has lowered its rating on French Connection to ‘neutral’ from ‘buy’, saying the outlook for the European consumer is continuing to deteriorate.

Citigroup has begun coverage on the student accommodation specialist Unite with a ‘hold’ stance and a 245p price target.

On Footsie, Cable & Wireless this morning confirmed it has upped its offer for Thus with a cash offer of 180p per share. Vodafone is also going well on talk of a float in Qatar. Xstrata lead a strong mining sector.

Support services group Serco has repeated the guidance given with its interims on 13 May. "Our performance remains strong, and our markets continue to offer substantial opportunities, underpinning our revenue and margin guidance. Serco remains on track to deliver on expectations for 2008," it said.

Power station Drax now expects full year results will be modestly higher than recent market EBITDA consensus of around £400m, reflecting its current contracted position as well as prevailing conditions in the commodity markets. The board expects to declare an interim ordinary dividend of 5p per share (approximately £17m), and a special dividend in respect of the six months ending 30 June 2008.

Ground engineer Keller reports trading in the first five months of 2008 has been strong, with revenue, operating profit and orders all ahead of the same period last year.

Online fashion group ASOS saw underlying profits surge 176% to £8.25m in the year to March 31 on a 90 percent increase in revenues to £81m. Sales in the 13 weeks to June 27 were up 95%, it added. "While it's too soon to suggest that this performance will continue for the full year, we are confident that 2008/09 will be another strong year for ASOS," it said in a statement.

Contractor Costain says that since 8 May 2008, the group has continued to perform in-line with the board's expectations. Costain says it has secured a number of significant new orders since the beginning of the year and the group's forward order book today stands at in excess of £2bn, which is a record level.


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