Tuesday April 22, 04:59 PM
London close: Banks make Footsie suffer
LONDON (ShareCast) - A weak start on Wall Street dragged London into the red early afternoon, with losses among the banks and housebuilders cancelling out mining sector strength. The pressure increased on Sir Fred Goodwin today after the RBS
(LSE: RBS.L - news) chief announced details of a widely anticipated £12bn rights issue, having dismissed speculation a cash call was on the cards earlier this year. Investors will be able to buy 11 new shares for every 18 existing shares at 200p each. RBS estimates the effect on capital of write-downs in respect of credit market exposures at £5.9bn before tax, while the sale of insurance businesses Direct Line and Churchill (CUQ.TO - news) will bring in around £4bn.
Speculation is now rife that other banks might follow suit, with the spotlight shining brightest on HBOS (LSE: HBOS.L - news) and Barclays (LSE: BARC.L - news) . Meanwhile, Bradford & Bingley (LSE: BB.L - news) says its liquidity position is funded into 2009, despite on-going difficulties in the wholesale markets. Housebuilders remained friendless through to the close after Merrill Lynch (NYSE: MER - news) downgraded Barratt Developments (LSE: BDEV.L - news) , Bellway (LSE: BWY.L - news) and Redrow (LSE: RDW.L - news) from "buy" to "neutral." Peers Persimmon (LSE: PSN.L - news) and Taylor Wimpey (LSE: TW.L - news) were also under the cosh after the US broker also cut its 2008 industry volume expectation to a 25% decline from a previously forecast 15% drop. But better metal prices helped miners Eurasian Natural Resources, Antofagasta (LSE: ANTO.L - news) , Kazakhmys (LSE: KAZ.L - news) , Rio Tinto (Frankfurt: 855018 - news) and Xstrata (LSE: XTA.L - news) limit the decline. Oil pays Tullow Oil (Dublin: TQW.IR - news) and Cairn Energy (LSE: CNE.L - news) also improved as oil prices topped $118 a barrel for the first time. In results news, Associated British Foods (LSE: ABF.L - news) , the owner of Primark discount clothes stores and Silver Spoon sugar, posted a 5% rise in interim profit to £282m. But the shares headed lower after the group conceded economic conditions were difficult. Other retailing stocks follow AB Foods lower, with Home Retail Group, Marks & Spencer, Kingfisher (LSE: KGF.L - news) and home shopping company Findel (LSE: FDL.L - news) the major casualties. Sugar producer Tate & Lyle also tracked lower. News that software group Logica is to cut 1,300 jobs as part of a £110m restructuring programme, upset its shares. Engineering (Milan: ENG.MI - news) group Melrose (LSE: MRO.L - news) has agreed the takeover of industrial conglomerate FKI (LSE: FKI.L - news) for 81.3p per share, but Fiberweb (LSE: FWEB.L - news) slumped by a third as Israeli group Avgol dropped its plans to make a bid for the struggling textiles firm. Logistics software supplier Kewill Systems (LSE: KWL.L - news) said it expects full year profits to be better than market expectations, while Petards was hoisted after the CCTV equipment maker said it is in discussions with a number of parties that could lead to the sale of the company. Aim-listed oil explorer Regal Petroleum (LSE: RPT.L - news) has received an early stage approach for its assets in the Ukraine. Profits at mobile phone gambling group Probability (LSE: PBTY.L - news) could top forecasts if current momentum continues, it said as the customer acquisition rate soared in the fourth quarter. Biotech group Protherics (LSE: PTI.L - news) fell after a study into the use of its Digibind treatment in pregnant women suffering pre-eclampsia met only one of its two primary targets.
FTSE 100 - Risers
Eurasian Natural Resources (ENRC) 1,311.00p +8.71%
Kazakhmys (KAZ) 1,694.00p +3.80%
Antofagasta (ANTO) 830.00p +3.49%
Rio Tinto (RIO) 6,385.00p +2.37%
Xstrata (XTA) 3,998.00p +2.17%
BHP Billiton (LSE: BLT.L - news) (BLT) 1,882.00p +2.01%
Smith & Nephew (SN.) 654.50p +1.95%
Tullow Oil (TLW) 732.00p +1.53%
Centrica (LSE: CNA.L - news) (CNA) 305.00p +1.50%
Cobham (COB) 216.75p +1.29% FTSE 100 - Fallers
Persimmon (PSN) 662.00p -5.29%
Home Retail Group (HOME) 245.75p -4.19%
Thomas Cook Group (TCG) 284.00p -3.97%
Carnival (CCL) 2,010.00p -3.97%
Shire (SHP) 918.50p -3.92%
Royal Bank of Scotland Group (RBS) 358.00p -3.89%
ITV (ITV (LSE: ITV.L - news) ) 65.30p -3.83%
HBOS (HBOS) 520.00p -3.70%
Barclays (BARC) 461.00p -3.66%
Enterprise Inns (LSE: ETI.L - news) (ETI) 401.25p -3.55% FTSE 250 (news) - Risers
FKI (FKI) 84.50p +8.68%
Moneysupermarket.com (MONY) 113.50p +7.84%
Hardy Oil & Gas (HDY) 759.00p +4.98%
International Ferro Metals (LSE: IFL.L - news) (IFL) 151.25p +4.49%
Henderson Group (LSE: HGI.L - news) (HGI) 129.00p +3.41%
Real Estate Opportunities (REO) 104.75p +3.20%
Hunting (LSE: HTG.L - news) (HTG) 871.50p +3.14%
Assura Group (LSE: AGR.L - news) (AGR) 106.75p +3.14%
Gem Diamonds (LSE: GEMD.L - news) (GEMD) 957.50p +2.96%
Filtrona PLC (LSE: FLTR.L - news) (FLTR) 161.25p +2.71% FTSE 250 - Fallers
DSG International (LSE: DSGI.L - news) (DSGI) 62.25p -8.46%
Dairy Crest Group (LSE: DCG.L - news) (DCG) 400.50p -7.88%
Yell Group (LSE: YELL.L - news) (YELL) 177.25p -5.84%
Taylor Wimpey (TW.) 150.75p -5.63%
Trinity Mirror (LSE: TNI.L - news) (TNI) 278.00p -5.60%
easyJet (EZJ) 304.00p -5.52%
Barratt Developments (BDEV) 346.75p -5.07%
Mitchells & Butlers (MAB) 334.25p -4.91%
Cattles (LSE: CTT.L - news) (CTT) 219.50p -4.88%
Travis Perkins (LSE: TPK.L - news) (TPK) 1,027.00p -4.82%
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