Wednesday March 26, 12:23 PM
London midday: Footsie fails to recover lost ground
LONDON (ShareCast) - London is struggling to claw back much of its early losses as investors eye weaker US futures and Xstrata (LSE: XTA.L - news)
remains sharply lower after takeover talks failed. Wall Street is set to give up around 50 points at the start of play on talk that the $19bn sale of radio broadcaster Clear Channels has collapsed, arousing further credit fears. The market has already been rocked by the failure overnight of miner Vale to buy Xstrata. Reports recently had suggested that concluding a deal was proving problematic, with Xstrata's board apparently turning down an offer of £40 per share consisting of cash-and-shares. Xstrata has fallen sharply, but other miners are doing well, especially Anglo American (LSE: AAL.L - news) , Lonmin (LSE: LMI.L - news) , Rio Tinto (Frankfurt: 855018 - news) and Kazakhmys (LSE: KAZ.L - news) . The market consensus appears to be that despite the collapse of the Vale/Xstrata deal, consolidation within the sector is still very much on the cards. Sainsbury (LSE: SBRY.L - news) is better on news that the supermarket giant has formed a £1.2bn property joint venture with real estate firm British Land (LSE: BLND.L - news) . It (Frankfurt: A0MLX5 - news) also announced today that like-for-like sales in the fourth quarter rose 4.1%, including fuel it rose 6%. Total sales for the quarter rose 5.1% excluding fuel. Morrison (Wm) Supermarkets rises in sympathy. Cairn Energy (LSE: CNE.L - news) is weaker on rumours that work in Rajasthan has stopped on a pipeline which is to transport Cairn's oil. Friends Provident (LSE: FP.L - news) is on the rise after the FT reported that JC Flowers is working on a fresh approach to the embattled life assurer. Energy supplier Scottish Southern Energy said it would double the amount of energy it generates from renewable sources in the UK and Ireland in five years. Vodafone (LSE: VOD.L - news) is buoyant on reports that it will start receiving dividends again from its US joint venture Verizon Wireless. Housebuilder Bellway (LSE: BWY.L - news) posted lower interim profits and is battening down the hatches for a tough second half of the year. Oil and gas exploration firm Soco International (LSE: SIA.L - news) saw profits for the year rise despite production being slightly lower. United Utilities (LSE: UU.L - news) expects to deliver full-year results in line with forecasts and said it remains on track to meet the tougher leakage target set by water regulator Ofwat for 2007/08. Tile retailer Topps Tiles (LSE: TPT.L - news) will report a small decline in underlying interim sales this year, adding the consumer market is getting "increasingly challenging". Photographic retailer Jessops (LSE: JSP.L - news) said like for like sales for the 25 weeks to 22 March is down 5.1% with total sales falling 24.6%, reflecting the closure of 81 stores last year. Sofa retailer ScS Upholstery (LSE: SUY.L - news) moved to a first half pre-tax loss after a 'challenging' trading period, but said it remains confident of a profitable second half. Strong food sales helped wholesaler Booker lift sales in the last quarter despite a further decline in tobacco revenues. Chrome and nickel miner Oriel Resources (LSE: ORI.L - news) has agreed to a £749m takeover from Russian mining and metals firm Mechel. Stockbroker Hichens, Harrison falls back despite confirming it is bid talks with Religare Enterprises. The New Delhi-based retail brokerage is considering a cash offer for the UK stockbroker at a proposed price of 285p per share. Metal-Tech plunged on news that the speciality metal and metal-based chemicals firm expects to fall "significantly" short of full year profit expectations. Lighting equipment manufacturer FW Thorpe said its group companies performed well during the first six months, encouraging it to increase dividends by 20%. Architect firm SMC (Frankfurt: 874794 - news) said the restructuring steps it took during 2007 has helped increase second half revenues and EBITDA compared with the first half. CAP-XX is wanted after signing a letter of intent to establish a partnership with Japanese electronic components company Murata to provide high performance super-capacitors to the mobile hand-set industry and for other applications. Outsourced car valeting and vehicle preparation provider Autoclenz is firmer despite reporting profit before tax, amortisation of intangible assets and share based costs of £1.5m, down from £2m in 2006. The company said it is making progress on reducing its dependence on the automotive sector and expanding its presence in the car rental market.
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