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FTSE remains down midafternoon

MIDAFTERNOON REPORT: Headline shares remained down in midafternoon trade, but off lows, with Wall Street opening lower after disappointing employment data. In London, weak mining and banking sectors led the general market lower.

At 2:30pm, the FTSE100 was down 45.9 points at 5,316.2 with the FTSE250 off 124.2 points at 9,025.8 and the FTSE Smallcaps 31.5 points weaker at 2,818.9.

NEW YORK

US stocks opened lower after government data showed the US labor market deteriorated further in August, pushing the unemployment rate to its highest level in nearly five years.

In early deals, the DJIA was down 41.6 points at 11,146.63, the S&P500 was down 5.83 points at 1,231 and the Nasdaq Composite fell 14.13 points to 2,244.91.

LONDON MARKETS

The mining sector was hit by news that copper prices had dropped to the lowest level in seven months. A sharp rise in the dollar exacerbated the situation.

Rio Tinto fell 34p to 4,437p, BHP Billiton slipped 21p to 1,465p, Xstrata was off 62p at 2,549p and Anglo American dropped 51p to 2,379p.

The banking sector was also under pressure, on ongoing global credit concerns.

Barclays was down 11.5p at 317.75p, HBOS 2.25p weaker at 280.25p, Lloyds TSB off 5.5p at 280.75p and Royal Bank of Scotland 5.75p lower at 222p.

The oil majors fared a little better on news that production was getting back on-stream in areas hit by Hurricane Gustav, with Shell saying it expects to restart much of its offshore oil and gas production in the coming days.

BP added 4.75p at 510.25p and BG Group was 15p higher at 1,070p. However, Shell drifted 22p lower at 1,718p.

The UK business press highlighted how the operators of exchanges rivalling the LSE have made a ‘symbolic point’ of trading heavily in the LSE’s own shares, causing the market share of trading in LSE shares to drop to around 61.2% yesterday, 27.5% on the CHI-x and 11.3% on Turquoise. LSE shares fell a further 5.5p to 763p.

Telecoms stocks suffered heavy losses after Nokia, the world's biggest handset maker, warned that the mobile phone market and its own market share will be weaker than previously expected.

Vodafone slid 5.15p to 132.75, Cable & Wireless dipped 6.1p to 167.9p and Carphone Warehouse lost 3.7p at 190.5, while handset chipmaker ARM Holdings fell 5p at 106p and Wolfson Microelectronics was down 5.25p at 118.25p.

New Star Asset Management fell 0.25p to 103.5p after HSBC cut its price target to 110p from 130p, but kept its 'neutral' recommendation after the company released its first-half figures on August 29th.

HSBC described in a note that the results and the fund manager's outlook 'bad', after New Star reported a 70% fall in pretax profits and announced that it was cutting its dividend to 1p from 4p.

Pubs operator JD Wetherspoon, which has nearly 700 pubs in the UK, this morning reported an 11% tumble in full-year pretax profit. The group made an adjusted pretax profit of £55m in the year to July 27th, in line with the consensus forecast. Wetherspoon shares rose 7.5p to 268.5p, but Enterprise Inns was down 7.5p at 271.75p, continuing its' journey south.

Bus and rail operator Go-Ahead Group, down 54p at 1,896p, said this morning its trading since June 28th had been in line with expectations, and its outlook was positive, despite economic uncertainty, with revenue 20% higher and pretax profit up 19%.

In a statement published ahead of the group's annual shareholders' meeting, HMV Group, the music, DVD, computer games and books retailer, said underlying sales had continued to grow, but at a slower rate, broadly in-line with expectations. HMV shares were off 3.5p at 128.25p.

Carr's Milling Industries bucked the downward trend after it said it expects its full-year pretax profit to more than double to at least £12.5m on revenue of about £350m, after 'very strong trading' across all divisions and geographies. The shares added 15p at 677.5p.

Story supplied by MoneyAM

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