LONDON (ShareCast) - London’s blue chips extended losses in afternoon trading to close sharply lower as banks and selected miners weighed on stocks.

Sumitomo is reportedly in talks with Barclays to invest about Y100bn ($926m) for a small equity stake in the UK bank. The reports this morning suggested Barclays is not talking to any other Japanese bank. The news did nothing to prevent a 3% drop in value.

Elsewhere in the banking sector HBOS was lower after Credit Suisse, Lehman Brothers and Merrill Lynch all cut back price targets for the stock.

Most miners were off the pace, though Antofagasta got a boost from an upgrade from Merrill Lynch to ‘neutral’ from ‘underperform’ following a 23% decline in the South America focused copper miner’s share price since April.

Housebuilders were enjoying a rare bout of popularity, as investors took heart from a report in “Building” magazine which suggests banks are prepared to be accommodating on the breaching of loan covenants.

“Building” magazine claimed that Barratt Developments has obtained a covenant waiver and this has eliminated the need for Britain’s second largest house-builder to refinance.

Broker Landsbanki reiterated its “buy” recommendation on the stock while conceding it is a high risk investment.

Barratt’s peers joined in the advance, with Redrow, Bovis, Persimmon, Berkeley and Bellway all recovering some of their recent heavy losses.

EasyJet was up on the fall in oil prices yesterday, but British Airways lost its advantage. Cruise operator Carnival, another big fuel user, has given up its lead, but bus and train group Stagecoach was better.

BG Group's BG LNG Trading (BGLT) unit agreed with CAPCO to supply one million tonnes of liquefied natural gas per year to CAPCO's planned LNG import terminal in Hong Kong for a period of up to 20 years.

The share price of plumbing merchant Wolseley was going down the pan after Morgan Stanley cut its rating on the stock to “underweight” from “equal-weight” and sliced its price target to 380p from 530p, citing a worsening of the outlook in the Nordic countries, a slower than expected recovery in the US housing market and debt issues. The Financial Times has also suggested that the company may require a rights issue to secure its finances.

Security firm G4S benefited from Morgan Stanley’s attention, however, as the investment bank upgraded the stock to “overweight” from “equal-weight” and lifted the price target to 240p from 225p.

Printer St Ives said overall market conditions have been more challenging than it expected at the half-year. Total sales for the 43-week period from 4 August 2007 to 30 May 2008, on a continuing business basis, were 4.6% greater than the equivalent period for the previous year. Underlying sales, after adjusting for currency movements, showed growth of 1.6%.

Tomkins has acquired Trion, a US manufacturer of commercial, industrial and residential indoor air quality products from Fedders Corporation for a gross consideration of $25m as part of a court approved bankruptcy transaction.

Car parts and bike retailer Halfords has appointed David Wild as its new chief executive with effect from 4 August. Wild is currently senior vice president for new business development at Wal-Mart in the US.

North Sea oil group Endeavour International has made a cash and shares bid to buy rival Ithaca. The offer is worth $3.25 per Ithaca share, a 44% premium to yesterday's closing price. Under the deal Ithaca shareholders would receive a maximum amount of cash of $150m.

Citigroup has stuck the knife into property website Rightmove, cutting its rating to “hold” from “buy” against a background of estate agency closures. However, the bank looks favourably on energy efficiency support services group eaga, upgrading the shares to “buy” from “hold”, although the price target is trimmed to 140p from 160p.

FTSE 100 - Risers
Tullow Oil (TLW) 953.00p +6.07%
Antofagasta (ANTO) 665.00p +4.72%
British Land Co (BLND) 766.00p +3.03%
Amec (AMEC) 950.50p +2.26%
British Energy Group (BGY) 706.50p +2.24%
Hammerson (HMSO) 916.00p +2.18%
Liberty International (LII) 904.50p +1.86%
G4S (GFS) 210.00p +1.82%
Land Securities Group (LAND) 1,339.00p +1.67%
Persimmon (PSN) 370.75p +1.58%

FTSE 100 - Fallers
Wolseley (WOS) 445.50p -5.26%
Carphone Warehouse Group (CPW) 203.25p -5.24%
Tate & Lyle (TATE) 374.25p -5.07%
HBOS (HBOS) 282.25p -4.89%
Thomson Reuters (TRIL) 1,382.00p -4.36%
Eurasian Natural Resources (ENRC) 1,452.00p -4.10%
Experian Group (EXPN) 372.75p -4.05%
Cobham (COB) 185.70p -3.78%
WPP Group (WPP) 522.50p -3.42%
British American Tobacco (BATS) 1,725.00p -3.25%

FTSE 250 - Risers
Barratt Developments (BDEV) 87.75p +12.14%
Bellway (BWY) 524.00p +10.08%
Bovis Homes Group (BVS) 371.50p +7.45%
Telecity Group (TCY) 280.25p +5.36%
Aquarius Platinum (AQP) 862.00p +5.31%
Taylor Wimpey (TW.) 69.75p +4.89%
Ashtead Group (AHT) 72.00p +4.35%
888 Holdings (888) 145.00p +4.32%
Daejan Holdings (DJAN) 2,722.00p +4.25%
WSP Group (WSH) 554.00p +4.14%

FTSE 250 - Fallers
Debenhams (DEB) 44.00p -9.28%
JPMorgan Indian Inv Trus (JII) 304.25p -6.60%
Rightmove (RMV) 300.00p -6.25%
Findel (FDL) 176.00p -6.13%
Laird (LRD) 412.00p -6.04%
PartyGaming (PRTY) 245.75p -5.75%
HMV Group (HMV) 120.00p -5.14%
Bradford & Bingley (BB.) 68.50p -4.86%
Marston's (MARS) 183.50p -4.55%
Dimension Data Holdings (DDT) 47.75p -4.50%

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