Monday April 21, 12:22 PM
London midday: Footsie in the red
LONDON (ShareCast) - Weaker banks have dragged London into negative territory at lunchtime, offsetting gains in the mining sector, with Royal Bank of Scotland (LSE: 90ID.L - news)
sold off ahead of its anticipated rights issue.Chancellor Alistair Darling wants banks to disclose the full extent of their sub-prime damage and take steps to repair their balance sheets. Royal Bank of Scotland confirmed this morning that it is considering a rights issue. Details on that are tipped to come out tomorrow. Merrill Lynch (NYSE: MER - news) has lowered its rating on Barclays (LSE: BARC.L - news) to 'neutral' from 'buy', saying the bank is likely to need additional funding after RBS (LSE: RBS.L - news) sparked rights issue concerns last week. The government is set to unveil today details of its well-leaked £50bn bail-out of the mortgage market. That figure could double to £100bn, if needed, according to reports. ITV (LSE: ITV.L - news) remains the best performer on rumours that BSkyB (LSE: BSY.L - news) has received expressions of interest in its stake in ITV from European broadcaster RTL. Shares in Persimmon (LSE: PSN.L - news) moved higher after Panmure Gordon upgraded its recommendation on the housebuilder to 'buy' from 'hold' in an otherwise downbeat review of the UK sector. Oil stocks continue to gush forward as crude prices continue to scale record highs. BP (LSE: BP.L - news) , Royal Dutch Shell (Amsterdam: RDSA.AS - news) and BG Group (LSE: BG.L - news) are surging ahead. Rumours about British Energy (LSE: BGY.L - news) continue with talks of several suitors currently undertaking due diligence, while Friends Provident (LSE: FP.L - news) is down after private equity group JC Flowers officially withdrew its interest late Friday. Rentokil (LSE: 647054.L - news) meanwhile has warned that trading at its City Link parcels business has got worse and it now expects the division to make a "significant full-year loss" for 2008. Nightclub owner Luminar (LSE: LMR.L - news) has played down weekend reports it may go private. "Luminar has noted the weekend media speculation regarding management buyout discussions with a third party. Financial services group WH Ireland surged ahead after it received an unsolicited preliminary bid approach. Ukrainian real estate company XXI Century Investments reported a 723.7% jump in full-year pre-tax profit Drug group Vernalis (LSE: VER.L - news) is to get a cash injection of €18.4m from Paul Capital Healthcare in a financing agreement relating to frovatriptan, Vernalis' product for the treatment of migraine. Coal development company Coal of Africa said the world's largest steel company ArcelorMittal (Amsterdam: NSCNL0001MT7.AS - news) will take a 16% stake through a placement, while European Goldfields said it will take a 20% stake in the Turkey-focused gold explorer Ariana. The Serious Fraud Office has decided to continue its price fixing case against Goldshield, sending the drug distributor to a four-month low.
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