LONDON (ShareCast) - Resource stocks are leading London's blue chips lower, while disappointing second-quarter results from Fannie Mae are putting pressure on the financial sector.

Kazakhmys, Antofagasta, Xstrata, Vedanta Resources and BHP Billiton are among the heaviest fallers in the mining sector, tracking copper prices lower.

The drop in crude sends the likes of BP and Shell slightly lower, but BG Group is on the rise after the oil and gas giant reported a ‘material’ new oil discovery in the pre-salt Santos Basin, offshore Brazil. The exploration well, known as Iara, discovered 30 degrees API light crude oil within the BM-S-11 concession area.

British Airways and cruise operator Carnival are given a boost by the lower oil price.

Royal Bank of Scotland is doing well as the group’s £691m half-year loss, on a pro-forma basis, was not as steep as first feared .“It has been a chastening experience and reporting a pre-tax loss of £691 million is something I and my colleagues regret very much,” said chief executive Fred Goodwin. Writedowns for the half-year was £5.9bn.

British American Tobacco is another big fallers after the group said it is seeking approval from the Johannesburg Stock Exchange to obtain a secondary listing there to help Richemont and Remgro restructure their stakes in the company.

Pre-tax profit fell 27% at fund manager Schroders in the first half, reflecting lower realizations from its Private Equity business and unrealised fair value write downs on investments in the first quarter. Group profit dropped to £135.7m from £185.6m in 2007 as profit at Private Equity slumped to £7.4m from £36.2m, although it rose 14% at Asset Management and Private Banking.

Goldman Sachs has lowered its rating on Vodafone to ‘neutral’ from ‘buy’ following a recent recovery in the mobile phone giant’s value.

Northern Foods is undervalued despite the prospect of continued weak consumer spending in the UK, Goldman Sachs said as it raised its rating on the Goodfella’s pizza maker to ‘buy’ from ‘neutral’.

Concerns over Kesa Electicals’ exposure to weak consumer spending in the UK prompted Deutsche Bank to lower its rating on the Comet owner to ‘hold’ from ‘buy’.

Insurer and underwriter Catlin reported a 21% slide in first half pre-tax profit to $150m but said it is on track to achieve good results for the full year. “We are confident about the group's prospects,” said chief executive Stephen Catlin.

Agricultural, food and engineering group Carr’s Milling expects pre-tax profit for the year to “substantially” exceed expectations.

Stanley Gibbons benefited from weaker financial markets during the first half as investors snapped up stamps and other collectibles.

Computer aided detection (CAD) and image analysis software company Medicsight said it continues to make progress in line with expectations as losses increased for the half year.

Crockery and pottery firm Portmeirion reported lower first half pre-tax profits and said its full-year performance might be below expectations.

Avon Rubber lost grip as problems producing filters for the US government will increase costs, while delays in getting another contract will also reduce revenues this year.

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