London midmorning: Footsie posting good gains

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Date: Wednesday 02 Jul 2008

  • Market Movers
  • techMARK 1,371.73 +1.35%
  • FTSE 100 5,518.00 +0.70%
  • FTSE 250 8,774.10 -1.64%

LONDON (ShareCast) - London’s blue chips are posting good gains as pharmaceutical firms and miners offset the losses posted by retailers.

Marks & Spencer is down 20% after it said first quarter UK like for like sales fell 5.3%, as it experiences “deteriorating consumer confidence levels and more challenging market conditions.”

First quarter sales at its food division were up 1.6%, but after a significantly weaker performance and in a bid to "meet challenging market conditions" Steven Esom, director of food, is stepping down from the board and will be leaving with immediate effect.

Other retailers in the red included Next, Kingfisher, Sainsbury and Morrison.

Pharmaceutical giant AstraZeneca surged ahead after wining its legal battle against two companies that want to market generic versions of Astra’s Seroquel drug. GlaxoSmithKline and Shire were also up in sympathy.

Miners are retracing the stellar losses posted yesterday. Kazakh miner ENRC is up having slid 12% yesterday on concerns about ferrochrome prices. Vedanta Resources and Kazakhmys are also posting strong gains.

Housebuilder Taylor Wimpey lost almost half of its value on news that it has failed to secure a deal with existing and potential investors to raise further equity capital. Finance director Peter Johnson has departed and it also said there will be no interim dividend.

"In light of current market conditions we have not been able to conclude a satisfactory transaction," it said. The group had been expected to announce an injection of £500m. "We will continue to evaluate options to secure that value for our shareholders," it added.

Barratt Developments, Persimmon, Bellway and Bovis Homes are posting heavy losses.

Meanwhile, British Airways has agreed to buy privately owned French airline L'Avion for £54m. The price covers the purchase of the airline and £26m of cash in its business.

Olfield services specialist John Wood has issued another upbeat statement forecasting a year of "strong growth".

Contractor Balfour Beatty's trading has continued strong with orders since the year-end up by £400m. "Trading in the year to date continues to be strong. A number of major new orders, referred to in our May statement, have been secured across our business sectors and geographical markets," it said.

Informa gained after the exhibitions group confirmed that it has received a 506p proposal from a private equity consortium led by Providence Equity. Informa said the consortium, which also includes The Carlyle Group and Hellman & Friedman, had made a preliminary 506p per share bid on 26 June.

Irish building firm CRH expects to report a "high single digit percentage decline" in 2008's pre-tax profit as demand weakens in Europe and the US. The supplier of cement and bricks predicts a pre-tax profit of €600m for the six months ended 30 June 2008 compared with €670m the same time a year before.

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