Kingfisher(KGF)

LONDON (ShareCast) - Footsie closed unchanged from its start this morning as a grim statement from artificial joint group Smith & Nephew overshadowed British Airways bid speculation.

British Airways topped the risers after the airliner triggered consolidation rumours in the sector following its statement late yesterday. BA said it is “exploring opportunities for co-operation” with American Airlines and Continental Airlines.

Shares in the newly-merged financial information giant Thomson Reuters jumped after it reported higher first quarter revenues at its two predecessor companies, adding that it expected pro-forma revenue growth of 6% to 8% in 2008.

Kazakhmys, Anglo American, Xstrata, Antofagasta and Vedanta Resources are among the top risers, as is BHP Billiton after its board approved a $1.9bn expansion of the Worsley alumina refinery in Western Australia.

Ferrochrome producer Eurasian Natural Resources Corporation has exercised an option to buy a 50% stake in Bahia Mineracao Limitada (BML) from Zamin for $300m in cash.

Smith & Nephew shares tumbled as it revealed it had discovered $100m of overstated sales at its recently acquired Plus business. The artificial hip and knee joint group added sales would be hit for the year because of the issues with Plus, while profits would be $25m worse than expected.

Packing firm Rexam is lurking near the top of the Footsie leaderboard after first quarter results that were in line with company expectations. The company said its outlook for 2008 remains unchanged.

Real estate firm Hammerson said there have been further declines in UK property values in the first quarter of the year as activity in the real estate market remains restricted.

Sector peer Land Securities is weaker after Deutsche Bank downgraded the stock to “hold” from “buy”.

Property asset manager Capital & Regional is also hit by a broker downgrade, this time from JP Morgan, which is now neutral on the shares having previously recommended its clients be “overweight” in the stock.

Furniture retailer Galiform is up as it saw sales at its main Howden Joinery division rise by 11%, or 5.9% on a same-deposit basis, in the first four periods of the year ending 19 April.

Elsewhere in the retail sector Home Retail Group gives back some of yesterday’s gains while fellow DIY retailer Kingfisher is laid low by a downgrade from Goldman Sachs. The US bank now rates Kingfisher shares as a “sell” having previously been neutral on the stock, and has cut its price target by a fifth to 110p.

Micro Focus has made a recommended $7.20 per share cash offer for Nasdaq-listed software provider NetManage. The group also said it expects full-year revenues to be in the range of $226m to $228m, reflecting a combination of improved operational performance and the positive impact of exchange rate movements.

Engineering group GKN said it expects 2008 to be another year of solid progress with performance in line with its earlier expectations.

National Express has made a good start to the year and is trading in line with management expectations, the bus and rail operator said Thursday.

Engineer Tomkins said the majority of the end markets it sells into remain robust but added that some of its end markets have weakened further since its year-end results.

Toy train maker Hornby has agreed to buy model car maker Corgi for £7.5m in cash as it beefs up its toy brands.

Bluetooth specialist CSR hits the skids again after saying its customers are reducing inventory levels. The company has also written off its investment in UbiNetics, having decided not to proceed with its entry into the broadband market.

Rank shares are wanted on hopes that the government will shortly announce a relaxation in the restrictions on category B3 gaming machines in bingo halls. Broker Investec said in a client note today that Sports Minister Gerry Sutcliffe is expected to make a statement to Parliament soon that could offer good news for the bingo industry.

Abcam, which sells antibodies online, said sales are expected to be ahead of expectations and added that outlook for profit for the year has improved "significantly".

Shareholders in specialist upholstery retailer Land of Leather are sitting more comfortably as the morning’s sharp losses have almost been wiped out. The shares fell sharply as the sofa retailer revealed a hefty drop in like for like sales orders.

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