LONDON (ShareCast) - Gloom on Wall Street weighed on London through the afternoon, turning early gains into a chunky deficit, with banks and fuel guzzling British Airways the hardest hit.

Royal Bank of Scotland, whose rights issue closed today, finished sharply lower along with peers HBOS, Barclays and Alliance & Leicester.

There was more bad news for borrowers when battered buy-to-let lender Bradford & Bingley hiked rates on new fixed rate mortgages by 0.55% due to the growing cost of raising funds in the financial markets, while internet bank Egg stopped all new lending for UK mortgages until further notice.

British Airways took a thumping as oil prices extended yesterday’s rally with another $6 a barrel surge towards recent record highs at $135. Easyjet and cruise operator Carnival also found the going tough on fuel cost concerns.

Passenger numbers totalled 3,877,960 at Easyjet in May, up 15.9%, though the load factor dropped 83.6% to 83.2%. For the past 12 months, passengers rose from 35.2m to 40.6m.

Insurer Standard Life was another in trouble after Deutsche Bank cut the shares to 'sell' from 'hold', while Aviva said as many as 1,800 staff at insurer Norwich Union are to lose their jobs by 2010 as it sets about restructuring its insurance operations.

Oil plays helped prevent an even bigger slide as Cairn Energy, Tullow and BG gained on stronger energy costs. Miners were also in demand as buyers return after profit taking in recent days. BHP Billiton and Kazakhmys did well.

Xstrata joined in the sector’s advance after a boost from a Merrill Lynch note which kept its ‘buy’ rating and lifted its price target by 14% to 5,300p. The concerns over copper prices prompted the broker to cut India-focused miner Vedanta to ‘neutral’ from ‘buy’.

JP Morgan started coverage on the Russia-focused oil producer Imperial Energy with an ‘underweight’ rating and a 950p target price.

Morgan Stanley has lifted its rating on Scottish and Southern Energy to ‘overweight’ from ‘equal-weight’ and raised its target price to 1,780p from 1,450p, saying it expects the power supplier to benefit from higher power prices and greater market share.

Pub group Fuller, Smith & Turner upped underlying profits by 4% to £23m, on revenues up 2% to £181m in the year to March. Like for like sales in the managed Pubs and hotels are up by 2.4% for the nine weeks to 31 May 2008. The current inflationary pressures in the UK, particularly on grain, food and energy, are both pushing up costs but Fullers says it intends hold gross margins across both retail and brewing operations.

US margins are under pressure at jeweller Signet but sales at UK brands H Samuel and Ernest Jones held up well in the company’s first quarter. Pre-tax profit in the 13 weeks to 3 May tumbled 24% to $38.6m from $50.8m the year before. Analysts had been expecting pre-tax profits of $40m.

Toy group Hornby's profits last year hit forecasts at £9m, up 17%, on sales of £55.7m, up 19%. "Notwithstanding the general economic downturn in many of the markets in which we operate, we are anticipating another year of good progress," it added.

Software specialist Flomerics could escape the unwelcome clutches of Mentor Graphics by jumping into the arms of computer aided design giant Autodesk. The company confirmed this morning that it is involved in discussions with Autodesk regarding a possible merger.

Shares in Sport Media plunged after the publisher said full-year pre-tax profits will miss expectations following the ‘disappointing’ relaunch of the Daily Sport newspaper. The group is now undertaking a strategic review of the business and said that non-executive chairman Simon Hume-Kendall will step down once the review has been completed due to ‘increased business commitments’.

Electronic trading systems group Patsystems is seeing a slow-down in the finalisation of major purchasing decisions by its customers. While recurring revenue from existing customers, which accounts for around four-fifths of the company’s annual turnover, has continued to grow in line with expectations in 2008, new business is feeding through more slowly than expected.

AIM-listed Petra Diamonds has received regulatory approval for the transfer of the Cullinan mining right to a company controlled by the Petra Diamonds Cullinan Consortium.


FTSE 100 - Risers
Xstrata (XTA) 4,107.00p +3.66%
Cairn Energy (CNE) 3,305.00p +3.64%
Carphone Warehouse Group (CPW) 243.00p +2.53%
Johnson Matthey (JMAT) 2,012.00p +2.50%
Eurasian Natural Resources (ENRC) 1,380.00p +2.37%
Scottish & Southern Energy (SSE) 1,509.00p +2.37%
BG Group (BG.) 1,256.00p +2.36%
John Wood Group (WG.) 465.25p +1.81%
BHP Billiton (BLT) 1,903.00p +1.33%
Tullow Oil (TLW) 900.50p +0.73%

FTSE 100 - Fallers
British Airways (BAY) 233.50p -8.16%
HBOS (HBOS) 330.75p -7.61%
Barclays (BARC) 337.75p -6.96%
Standard Life (SL.) 246.75p -5.91%
Alliance & Leicester (AL.) 377.25p -5.57%
Home Retail Group (HOME) 238.50p -5.36%
Royal Bank of Scotland Group (RBS) 245.50p -5.21%
Carnival (CCL) 1,846.00p -4.89%
Standard Chartered (STAN) 1,657.00p -4.77%
Lloyds TSB Group (LLOY) 368.25p -4.47%

FTSE 250 - RisersFerrexpo (FXPO) 433.75p +6.57%
Premier Oil (PMO) 1,654.00p +4.16%
Hardy Oil & Gas (HDY) 786.00p +3.69%
Randgold Resources (RRS) 2,159.00p +3.05%
Dana Petroleum (DNX) 1,829.00p +2.46%
CSR (CSR) 335.00p +2.45%
Marshalls (MSLH) 203.50p +2.13%
International Personal Finance (IPF) 259.25p +2.07%
Charter (CHTR) 971.00p +1.73%
Venture Production (VPC) 895.00p +1.70%

FTSE 250 - Fallers
Quintain Estates & Development (QED) 338.25p -8.89%
Real Estate Opportunities (REO) 88.75p -8.51%
easyJet (EZJ) 307.50p -7.73%
Yell Group (YELL) 109.25p -7.02%
Spirent Communications (SPT) 65.75p -6.07%
Barratt Developments (BDEV) 140.75p -6.01%
Bellway (BWY) 589.00p -5.99%
Daejan Holdings (DJAN) 2,561.00p -5.98%
Daily Mail and General Trust (DMGT) 381.50p -5.69%
Signet Group (SIG) 60.00p -5.51%

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