LONDON (ShareCast) - Concerns about banks on both sides of the Atlantic sent London into retreat today after a moderately firm opening quickly fizzled out.

Investors turned on the banks again as Northern Rock said offers received were priced below Friday’s close, while real estate issues tumbled on worries about the property market.

Northern Rock admitted that indicative expressions of interest valued the beleaguered mortgage lender at a level “materially below” Friday’s closing value of £559m. Alliance & Leicester fell in sympathy.

Royal Bank of Scotland, Barclays, HSBC and Lloyds TSB all lost ground, although Standard Chartered made headway on reports that China's three leading banks are looking at buying a large stake in the former colonial bank. They are said to have sounded out Singapore state investment agency Temasek over a possible sale of its 17% stake.

Housebuilder Barratt was off colour despite a reassuring trading statement which failed to offset the effects of a gloomy outlook for house prices, according to a survey by property web site Rightmove. Barratt says that interest rate rises and the effect of recent liquidity squeeze on the availability and cost of mortgage finance has led to a tightening of the UK housing market. News that private sales were lower than the year before and more in line with 2005/6 levels rubbed off on peer Taylor Wimpey.

Housing market woes also depressed DIY outfit Kingfisher, while pub groups such as Enterprise Inns, Punch Taverns and Mitchells & Butlers were also in the doldrums on concerns that declining house prices will cramp consumer spending.

There was plenty of bid action today. SABMiller has made an €816m for Dutch brewer Grolsch, while BAT Industries has been unsettled by Richemont's plan to shunt its 19.3% stake in to a separate vehicle and away from its luxury goods arm.

British Land fell sharply as Societe Generale lifted the real estate giant to 'hold' from 'sell', but cut its price target by 9% to 870p on valuation grounds. Hammerson and Land Securities joined the retreat.

Burren Energy slumped as Italian giant Eni dropped its takeover plans, while surgical equipment group Gyrus agreed to a £935m bid from Japanese medical equipment and digital camera maker Olympus. The offer is pitched at 630p per ordinary share of Gyrus, a 57% premium to Friday's share price.

Engineering firm Smiths Group eased back after Goldman Sachs downgraded the shares to 'sell' from 'neutral', with price target cut to 953p from 970p.

ITV surrendered early gains which were prompted by UBS lifting its rating of the TV broadcaster to 'neutral' from 'sell', with the price target dropping to 90p from 100p.

AIM-listed engineer Hamworthy tumbled despite revealing a 15% increase in underlying profits to £6.3m on sales up 30.5% to £106.2m. "With the order book at a record level and a healthy balance sheet, the board remains confident in the group's outlook for the remainder of the year," it said.

Electrical engineering and contracting firm T Clarke is on track to meet current market expectations for the full year following strong trading at its core business since August’s interims. “The board is confident about the prospects for the group,” it said.

Fashion house Marchpole Holdings reported a sharp drop in profits, citing expansion into new markets and the loss of a license with the designer label YSL.

Acquisitive business and technology consultant Detica reported higher interim profits but said global uncertainty in financial markets has quashed hopes of second half growth in its commercial division.

Traction Technology accelerated strongly after signing an agreement with Optare Group to jointly develop a range of vehicles for the UK bus market.

West African gold miner Cluff Gold was wanted after proclaiming it is close to completing its transformation from an explorer to a producer with an annualised production of 100,000 ounces.


FTSE 100 - Risers
Standard Chartered (STAN) 1,679.00p +0.90%
Unilever (ULVR) 1,796.00p +0.73%
Smith & Nephew (SN.) 575.50p +0.44%

FTSE 100 - Fallers
Northern Rock (NRK) 104.20p -21.42%
British Land (BLND) 820.50p -7.76%
Lonmin (LMI) 2,859.00p -7.68%
Kingfisher (KGF) 160.30p -7.66%
Antofagasta (ANTO) 657.50p -7.65%
Anglo American (AAL) 2,862.00p -7.26%
Xstrata (XTA) 3,043.00p -7.25%
Hammerson (HMSO) 908.00p -6.78%
Enterprise Inns (ETI) 508.50p -6.61%
Land Securities Group (LAND) 1,377.00p -6.26%

FTSE 250 - Risers
Gyrus Group (GYG) 607.00p +51.75%
Amec (AMEC) 738.50p +3.21%
Beazley Group (BEZ) 160.00p +3.06%
Headlam Group (HEAD) 485.25p +2.48%
Dimension Data Holdings (DDT) 59.25p +1.28%
SSL International (SSL) 527.00p +1.15%
Axon Group (AXO) 750.00p +1.08%
Sports Direct International (SPD) 122.50p +0.62%
Tullett Prebon (TLPR) 461.00p +0.44%
JKX Oil & Gas (JKX) 358.50p +0.42%

FTSE 250 - Fallers
Burren Energy (BUR) 1,015.00p -14.56%
Ferrexpo (FXPO) 205.00p -12.77%
Aquarius Platinum (AQP) 1,469.00p -12.35%
New Star Asset Management Group (NSAM) 225.00p -12.28%
Paragon Group Of Companies (PAG) 204.25p -11.58%
Catlin Group (CGL) 415.50p -11.31%
Pendragon (PDG) 49.75p -11.16%
Minerva (MNR) 150.50p -10.81%
UK Commercial Property Trust (UKCM) 61.00p -9.63%
Mapeley (MAY) 1,450.00p -9.38%

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