LONDON (ShareCast) - UK blue chips lost nearly all their shine during the afternoon session following a lacklustre start on Wall Street and as UK housebuilders resumed their downward trend.

Fourth quarter numbers from investment bank Goldman Sachs failed to provide the expected boost in the US, with traders pointing to slowing growth in the firm’s core business.

There were also words of warning from chief financial officer David Viniar who said the group is cautious about the near-term outlook. It sees dislocation in some of the world’s capital markets.

Back over here, Alliance & Leicester was sharply lower on worries about a possible downgrade to the mortgage bank’s financial strength rating and long-term bank deposit and debt ratings.

Northern Rock reversed initial gains after Moody's downgraded its bank financial strength rating on the troubled mortgage lender. The shares had risen earlier on news the Treasury has granted a request from the firm to extend the deposit guarantees issued by the government to include uncollateralised debt.

Housebuilders Barratt Developments, Persimmon and Taylor Wimpey had been higher earlier in the day as stable inflation data raised hopes for a rate cut early next year.

But they, along with the retail sector, saw gains disappear as the day went on. Retailers finished mixed as data showed annual inflation at 2.1% in November, less than the 2.2% expected.

Talk in the press was that retail entrepreneur Mahesh "Micky" Jagtiani has taken a 7% stake in department store chain Debenhams and may be mulling a bid.

The news gave a boost to other retailers DSG, Home Retail and Kingfisher, although each finished the day with varying degrees of succes.

High street fashion chain Next managed gains after JP Morgan maintained its ‘overweight’ rating on the stock and said the de-rating of the shares looks harsh.

London Stock Exchange was among the top risers after Citigroup lifted its price target to £18.25, up from £16.50, saying the company is benefiting from heightened volatility caused by the credit crunch.

Miners fought back from early losses. Improving metal prices have dragged Anglo American, Antofagasta and Rio Tinto into positive territory.

Elsewhere, internet auction firm Tradus, formerly QXL Ricardo, rallied after it recommended a cash offer from South African media giant Naspers worth £946m, or 1,800p a share.

A series of upbeat statements from mid-caps had lifted the mood, with temporary power supplier Aggreko expecting full-year operating profit to rise by 50%, although it warned that conditions in North America could become more difficult.

National Express journeyed higher on news it expects full year results at the top end of market expectations and remains confident about prospects for 2008.

Industrial ceramics group Cookson predicts full year results will be at the upper end of expectations. "Our end-markets are currently showing good growth and the outlook for worldwide steel production, in particular, remains robust,” it said.

Metal treatment specialist Bodycote says sales growth for the year to date has been 18% of which 8% is organic and a further 10% is from acquisitions. The board remains confident for 2008.

Power station Drax has continued to trade in line. In the absence of unforeseen circumstances, core profits in 2007 will be around £500m, less than many had expected.

Kingspan slumped after it said present market conditions leave it difficult to guide for the coming year, though it suggests growing environmental demand for insulation board should mean mid-single digit growth in earnings. That represents a sharp slow-down.

Nomura has finally got everyone singing from the same hymn sheet, with the Japanese bank confirming it does not plan to launch a bid for Collins Stewart following some confusion earlier today.

Office rental firm Regus said all four regions in which it operates are firing on all cylinders and it is on target to meet market expectations with its results this year. In the first 11 months of 2007 revenues have grown 27% to £783.1m from £616.5m in the corresponding period of last year.

Car retailer Inchcape has seen solid sales growth this year as it continues to trade in line with market expectations. In the first 11 months of 2007, total sales were up 26% in sterling terms, or 27% on a constant currency basis. Like-for-like revenue has grown 3.8%.

Poor weather and the loss of a key lingerie customer tipped female fashion group Slimma into the red, prompting cancellation of a final dividend for the year.

FTSE 100 - Risers
London Stock Exchange Group (LSE) 1,855.00p +2.66%
British Airways (BAY) 310.00p +2.48%
Cadbury Schweppes (CBRY) 623.00p +2.47%
Standard Life (SL.) 254.50p +2.21%
Kazakhmys (KAZ) 1,274.00p +1.92%
Experian Group (EXPN) 392.25p +1.82%
Capita Group (CPI) 671.00p +1.67%
Whitbread (WTB) 1,358.00p +1.65%
BAE Systems (BA.) 469.25p +1.57%
Antofagasta (ANTO) 687.00p +1.55%

FTSE 100 - Fallers
Northern Rock (NRK) 86.90p -4.92%
Alliance & Leicester (AL.) 635.50p -3.49%
Mitchells & Butlers (MAB) 445.25p -3.26%
Smith & Nephew (SN.) 570.00p -2.73%
Rexam (REX) 387.25p -2.46%
Barratt Developments (BDEV) 439.25p -2.33%
Schroders Nv (SDRC) 1,127.00p -2.09%
Reckitt Benckiser (RB.) 2,900.00p -1.96%
Persimmon (PSN) 769.00p -1.91%
Reed Elsevier (REL) 636.00p -1.85%

FTSE 250 - Risers
Aggreko (AGK) 505.50p +13.34%
Tradus (TRAD) 1,815.00p +12.04%
Debenhams (DEB) 81.75p +8.28%
Keller Group (KLR) 701.00p +7.85%
Petrofac Ld (PFC) 510.00p +7.20%
Aquarius Platinum (AQP) 554.50p +6.94%
Aveva Group (AVV) 956.00p +5.99%
RPS Group (RPS) 310.75p +5.79%
TUI Travel (TT.) 277.00p +4.92%
Quintain Estates & Development (QED) 556.50p +4.90%

FTSE 250 - Fallers
Bodycote International (BOY) 180.00p -10.22%
SIG (SHI) 710.00p -7.19%
Drax Group (DRX) 623.50p -6.80%
Sports Direct International (SPD) 84.25p -6.13%
SSL International (SSL) 500.50p -5.66%
Kier Group (KIE) 1,363.00p -4.82%
Marshalls (MSLH) 248.00p -4.34%
BSS Group (BTSM) 383.00p -4.19%
Galliford Try (GFRD) 99.00p -3.41%
Autonomy Corporation (AU.) 859.00p -3.27%

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