LONDON (ShareCast) - Footsie ended lower again today as a grim statement from Bradford and Bingley added to worries in the banking sector.

HBOS led the fallers after mid-cap peer B&B said it is to get a cash injection of £179m from US private equity group TPG at 55p per share. It will take a 23% stake in the mortgage lender through the investment. B&B made a loss of £8m in the first four months of 2008 and added that things remain tough with no respite likely this year.

Both HBOS and RBS felt obliged to issue statements intended to pacify the market, with the former saying that current trading remains satisfactory and that its fully underwritten rights issue is proceeding according to plan. RBS noted that UK buy-to-let mortgages are only 1% of its UK loan portfolio and confirmed that the trading patterns remain as per the guidance provided in April's update.

The FTSE 100’s sole housebuilder Persimmon, whose fortunes are also closely tied in with the mortgage market, fell back, as did real estate giants British Land and Hammerson.

News that fewer new mortgages were approved in April than at any time since the Bank of England began compiling figures back in 1999 didn't help. A report from the central bank revealed that the number of loans approved for house purchase fell to 58,000 during the month, down from 63,000 in March and weaker than the 65,000 predicted by analysts.

London Stock Exchange also slipped after Morgan Stanley cut its target price to 945p from 1,060p and kept its ‘underweight’ rating on the stock, citing cyclical factors. The broker also said that consensus opinion underestimates pressure on pricing as LSE contends with competition.

Bid talk sparked a late surge at British Energy, helping to at least keep Footsie above 6,000. Spanish utility Iberdrola is said to be mulling an offer worth 885p a share for the nuclear power giant.

Tullow Oil also appeared among the risers, even as crude prices stayed well below $130 a barrel. Morgan Stanley gave it a bullish write-up in a sector review, lifting its price target to 1,230p from 1,090p and keeping its ‘overweight’ rating.

Miners were up again, led by BHP Billiton and Rio Tinto. Vedanta Resources said its Indian subsidiary Sterlite Industries has agreed to buy assets of bankrupt Asarco, a Tucson based mining, smelting and refining company, for $2.6bn in cash.

Away from the blue chips, Imperial Energy advanced after saying it has discovered oil at the Kiev Eganskoye field, east of the OB River, in Russia’s Tomsk region. The well is being drill stem tested and is currently free flowing without stimulation or pumping at a rate of 1,575 barrels per day.

Shares in oil and gas explorer Dana Petroleum rallied after the group confirmed it had made a significant gas discovery with its first exploration well in Egypt. Dana said flow test results 'are very encouraging' at the WEB-1X well in the West El Burullus area in the Nile Delta.

Local newspaper publisher Johnston Press, down 13%, was like HBOS and RBS suffering from rights issue worries and the lack of advertising, as housing sales dry up.

Oil and gas company Aminex has been awarded a new 11-year Production Sharing Agreement (PSA) in Tanzania. The new PSA is known as Songo-Songo West and is offshore, adjacent to the western edge of the Songo-Songo gas field, and also near to Aminex’s recent gas discovery at Kiliwani North.

Also in the oil sector, Morgan Stanley has started coverage of Oilexco with an overweight rating and a 1,140p price target saying the North Sea oil and gas explorer is likely to benefit from good news in coming months.The broker cited short-term drilling in the UK and the likely valuation of the recently identified Huntingdon column in the North Sea in the second half of 2008. Morgan also began coverage on the Middle East and Africa-focused explorer Addax with an ‘equal-weight’ rating and a 3,540p price target.

ABN Amro has started coverage on the bus and train operator Go-Ahead Group with a ‘buy’ recommendation and a 1,920p target price. The broker said that pressure on the group’s share price from rising fuel costs, exposure to London commuters and the expiry of its Southern franchise was limited.

Electrical components group Chloride lifted profits by 48% last year £31.1m on sales up 31% to £268m. The group added it had a record order book with sales, operating profit and operating margin all currently well ahead of this time last year.

Shares in public sector software and services supplier IDOX gained sharply after it said half-year profits are expected to be well ahead of previous forecasts, helped by cost savings and margin improvements.

Pilat Media swung into a first-quarter pre-tax profit but shares in the group plummeted after it said that revenue growth this year will be lower than anticipated.


FTSE 100 - Risers
Tullow Oil (TLW) 912.50p +2.53%
Compass Group (CPG) 384.00p +2.40%
British Energy Group (BGY) 748.00p +1.91%
Rio Tinto (RIO) 6,170.00p +1.90%
Xstrata (XTA) 4,063.00p +1.86%
BHP Billiton (BLT) 1,948.00p +1.78%
Amec (AMEC) 848.50p +1.68%
Smith & Nephew (SN.) 550.00p +1.57%
Schroders NV (SDRC) 924.50p +1.48%
United Utilities (UU.) 757.50p +1.20%

FTSE 100 - Fallers
HBOS (HBOS) 360.00p -10.00%
London Stock Exchange Group (LSE) 958.50p -6.67%
Alliance & Leicester (AL.) 403.00p -5.23%
FirstGroup (FGP) 508.00p -4.06%
Experian Group (EXPN) 390.50p -3.76%
Carphone Warehouse Group (CPW) 229.00p -3.48%
InterContinental Hotels Group (IHG) 803.50p -3.43%
Wolseley (WOS) 533.50p -3.00%
Enterprise Inns (ETI) 453.00p -3.00%
Persimmon (PSN) 467.25p -2.96%

FTSE 250 - Risers
Imperial Energy Corporation (IEC) 1,040.00p +6.12%
PartyGaming (PRTY) 300.00p +4.71%
Fenner (FENR) 264.75p +3.72%
ITE Group (ITE) 178.00p +3.19%
Micro Focus International Plc (MCRO) 238.00p +2.92%
Game Group (GMG) 290.75p +2.83%
Southern Cross Healthcare Group (SCHE) 422.50p +2.80%
Ferrexpo (FXPO) 395.00p +2.66%
Dana Petroleum (DNX) 1,877.00p +2.57%
Edinburgh Dragon Trust (EFM) 160.00p +2.07%

FTSE 250 - Fallers
Bradford & Bingley (BB.) 67.00p -24.08%
Johnston Press (JPR) 72.75p -12.35%
Barratt Developments (BDEV) 167.50p -8.22%
Yell Group (YELL) 118.50p -6.14%
GKN (GKN) 275.50p -5.41%
Northern Foods (NFDS) 75.25p -5.35%
Cattles (CTT) 173.00p -5.34%
Ashtead Group (AHT) 72.25p -5.25%
PayPoint (PAY) 595.00p -5.18%
easyJet (EZJ) 285.50p -5.15%

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