LONDON (ShareCast) - Footsie turned down again in the afternoon session to close near its low point for the day with banks again in the firing line on worries over UK mortgage exposure.

HBOS sparked the sell-off as it said trading continue to be in line with expectations but expects first half write-downs to reach £1bn and the UK economy to slow with house prices deteriorating further. Write-downs in its treasury trading book, since its interim statement in April, have increased by £58m to £1.03bn.

Mortgage approvals fell again in May to add to the unease over the banks' mortgage exposure while booming retail sales also raised the prospect of rising interest rates.

Fellow mortgage specialist Alliance & Leicester Barclays, Lloyds TSB and Standard Chartered were also also hard hit.

Better metal prices have sent Eurasian Natural Resources, BHP Billiton and Anglo American higher, joined among the leaders oil majors after crude prices top $137 a barrel.

A militant attack on one of Shell’s installations off the coast of Nigeria has further boosted demand for crude and, concomitantly, oil shares such as Cairn Energy, Tullow and BP. However, heavy fuel users such British Airways, easyJet and Carnival fell back.

One fuel user sitting pretty is Go-Ahead, after the bus and train operator said it expects to surpass last year's record earnings after a strong performance at its main divisions. "We now anticipate delivering a full-year performance ahead of our previous expectations in April and significantly ahead of our record results last year,'' said the group in Thursday's statement. Sector peer FirstGroup cruises higher in sympathy.

Chocolate maker Cadbury expects second quarter growth to be modestly higher than the 7% like-for-like growth reported for the first quarter. It added that good progress is being made on margins despite further increases in marketing.

Centrica continues to trade in line with guidance provided in its interim statement last month. The British Gas owner said in May that operating profit for the first half will be “materially lower” than the same period last year.

Almost 2,500 jobs are to go at Imperial Tobacco as the cigarette maker restructures its business following the acquisition of Franco-Spanish rival Altadis for £11.3bn in January.

Vodafone edges higher on reports it has dropped out of the chase for broadband internet supplier Tiscali. Carphone Warehouse, one of the companies still reported to be interested in acquiring Tiscali, is trading lower, however.

JP Morgan has raised its price target on Scottish and Southern Energy to 1,740p from 1,700p, saying the fundamentals look good for the power supplier.

“The bulk of SSE’s businesses have a bright outlook currently in our view: network regulatory risk is at a low; renewable energy policy is moving the right way; wholesale power prices are rising,” the broker said.

Morgan Stanley has raised its stance on Pennon Group to ‘overweight’ from ‘equal-weight’ and lifted its price target to 730p from 645p, saying the water group should provide a safe haven for investors.

Redrow is enjoying a rare day in the sun after Citigroup raised its rating on the housebuilder to ‘buy’ from ‘sell’ after the recent sell-off in the company’s shares and in light of its cash generation potential.

Specialist lender Cattles slumped as it said it has applied tighter credit criteria to new business, which has resulted in lower receivables growth in its Welcome Finance unit. As a result of the moderation in the rate of growth of receivables, the traditional split of profits between half one and half two will be less pronounced this year.

Automotive and building products focused holding company Tomkins has sold Stant Corporation to US private equity group HIG Capital for an undisclosed amount. Stant, a fuel system and vapour emission control products company, had gross assets of $95m last year and annual sales of $179m.

Workforce management software developer WorkPlace Systems swung to a full-year pre-tax profit and said its outlook remains ‘cautiously optimistic’. Pre-tax profit came to £1.34m in the year ended 31 March compared to a loss of £2.14m in the previous period. Turnover rose 23% to £10.8m.

Norcros, the firm behind Triton showers, reported a 75.5% rise in full year pre-tax profit despite difficult trading conditions in both its main markets. While its main tiling and shower businesses faced challenging conditions, the group pushed through a 4.6% increase in trading profit and a 75.7% increase in profit before tax and exceptional items on a 3.4% increase in turnover.

Sofa seller Land of Leather tumbles after announcing details of its fund raising and a 1 for 10 share consolidation. The new shares are being offered at a 48% discount to last night’s share price.

FTSE 100 - Risers
Anglo American (AAL) 3,518.00p +3.50%
ICAP (IAP) 576.50p +3.13%
Eurasian Natural Resources (ENRC) 1,510.00p +3.07%
Next (NXT) 1,019.00p +2.16%
Centrica (CNA) 312.00p +2.04%
FirstGroup (FGP) 521.00p +1.86%

FTSE 100 - Fallers
HBOS (HBOS) 296.00p -7.14%
Alliance & Leicester (AL.) 305.75p -5.27%
Thomson Reuters (TRIL) 1,444.00p -4.81%
Persimmon (PSN) 365.50p -3.69%
Friends Provident (FP.) 112.00p -3.53%
Barclays (BARC) 315.50p -3.30%

FTSE 250 - Risers
Go-Ahead Group (GOG) 1,710.00p +12.28%
Redrow (RDW) 153.75p +11.62%
Stagecoach Group (SGC) 258.25p +8.51%
National Express Group (NEX) 925.00p +6.87%
Telecity Group (TCY) 267.00p +6.69%
Findel (FDL) 189.50p +5.42%

FTSE 250 - Fallers
Mitchells & Butlers (MAB) 211.00p -7.66%
Cattles (CTT) 137.00p -7.43%
Punch Taverns (PUB) 363.25p -5.89%
COLT Telecom Group S.A. (COLT) 150.25p -5.80%
Trinity Mirror (TNI) 157.50p -5.69%
Quintain Estates & Development (QED) 253.25p -5.33%

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