Ground lost to profit-takers

Published on Tuesday 17 November 2009 20:16

LONDON FTSE 100 CLOSE 5,345.9 -36.7

LONDON'S premier share index yesterday pulled back from Monday's 14-month highs as investors took the chance to take some money off the table.

The FTSE 100 followed Monday's 1.6 per cent gain with a slide of 36.7 points to 5,345.9 at the close amid little major news to set pulses racing.

A slightly higher-than- expected rise in inflation to 1.5 per cent in October failed to move the market significantly, despite some concerns that the Bank of England could begin to row back stimulus measures more quickly than previously thought.

There was little encouragement from across the Atlantic as sluggish industrial production figures saw Wall Street's Dow Jones industrial average give up some ground in early trading. A minor rebound for the dollar depressed mining stocks after Monday's stellar gains as investors poured money into commodities.

The heavyweight sector lost some of its sparkle yesterday, however, with Lonmin down 57p, or 3 per cent, at 1,683p. Rio Tinto was off 72.5p at 3,232.5p after a downgrade from brokers at Investec.

But telecoms company Cable & Wireless was among the biggest risers as it said previously announced plans to split itself into two should be completed by March. With C&W also revealing its intention to raise 200 million through a convertible bond issue, shares rose 2.4p to 140.7p.

Energy firms were also higher as investors switched back into safer blue-chip stocks. Scottish & Southern Energy lifted 22p to 1,117p, Centrica added 4.6p to 252.2p and water firm Severn Trent rose 10p to 1,005p.

Cadbury's shares were also 6.5p sweeter at 788p after reports suggested a link-up with Italian chocolatier Ferrero to combat a hostile takeover bid from Kraft. Analysts said that such a merger could convince investors to reject Kraft's advances.

Inter-dealer broker ICAP was the Footsie's leading riser, up 13.7p to 438.5p despite a 5 per cent fall in first-half profits as the firm eyed improving markets.

In the FTSE 250 index, transport firm Arriva was the top riser – up 28.1p to 486.6p – as broker Goldman Sachs raised its rating from "sell" to "buy".

But Enterprise Inns fell 8 per cent, off 11.2p to 122.4p, as it reported a 21 per cent slide in annual profits and said it expected further pressure on trading profits this financial year as a result of additional pub disposals.

EasyJet slipped 4 per cent after it posted underlying pre-tax profits of 43.7m for the year to 30 September, compared with 123.1m in 2008. Shares were down 14.2p at 378p, despite upbeat comments on next year.

Engineering company Bodycote was another FTSE 250 stock under pressure after it said sales were no better between July and the end of October. Shares fell 5 per cent or 10.5p to 187.9p. Elsewhere, UK Coal, the UK's biggest coal mining firm, fell 7 per cent or 6p to 76.75p after it said a fatal accident and tough mining conditions would dent production output for the year.

Among the Scottish stocks, Havelock Europa took a tumble – down 13 per cent or 5p at 33p – after revealing that "the group's results for 2009 are likely to fall below expectations".

Fife-based Havelock – which kits out schools and retailers and prints point-of-sale materials – has been hit by the "difficult economic climate", the group said.

ProStrakan, the Galashiels-based drugs company, was also on the back foot, despite flagging a 42 per cent year-on-year increase in turnover during the first ten months of the year.

Shares closed down 6.8 per cent or 7.5p at 103p.