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FTSE flat in midafternoon trade

MIDAFTERNOON REPORT: Headline shares were flat in midafternoon trade, after Wall Street opened sharply lower with insurers and real estate investment trusts in under pressure and offsetting strength in the heavyweight mining sector.

At 3:00pm, the FTSE100 was up 1.2 points at 5,487.3 with the FTSE250 off 49.8 points at 9,081.7 and the FTSE Smallcaps little changed at 2,802.6.

NEW YORK

Wall Street opened lower after jobless claims rose to its highest since March 2002 and Wal-Mart Stores reported disappointing same-store sales, raising more concerns about a slowdown in consumer spending.

In opening trades, the DJIA index was down 133 points at 11,522.1 .

LONDON MARKETS

In the UK, on the macro front, the Monetary Policy Committee kept interest rates on hold at 5% as they continue to grapple with the twin evils of soaring inflation and a flagging economy.

BLUE CHIPS

Friends Provident was among the big casualties, down 6.11 percent, or 5.6 pence at 86.1, after the insurer posted a 20 percent drop in first-half profit -- at the low end of expectations -- to 211 million pounds.

Cazenove said the shortfall reflects the slightly lower than consensus F&C Asset Management result and a deterioration in protection margins.

Peer Standard Life slipped 6 pence to 237-1/4 in sympathy.

Hammerson was out of favour after its own figures showed the retail REIT swung to a pretax loss in the first half.

In reaction, Citigroup said the results contain some of the same worrying issues seen in Liberty International's numbers, released on Wednesday.

KBC Peel Hunt, meanwhile, cut its view on Hammerson to 'hold' from 'add' due to near-term sector uncertainties.

Hammerson slipped 26 pence lower to 963, while Liberty fell 44-1/2 pence to 855-1/2.

And, International Power also fell back 19-1/2 at 401-1/2 following the release of its interim figures, which revealed plant outages going forward.

The UK power generator posted a 19 percent rise in first-half operating profit, but said second-half operating profit is expected to be dented by 45 million pounds because of an extended outage at the company's Rugeley plant in the UK.

Looking at the upside, the miners continued in Wednesday's vein as sector consolidation hopes encouraged investors and gains were underpinned by firmer metals prices.

Eurasian Natural Resources headed the FTSE 100 leaderboard, up 61 pence at 1,078, Antofagasta was up 27-1/2 pence at 570, Vedanta Resources adding 59 pence to 1,887, and Anglo American, up 54 pence at 2,833.

'The miners are up on a bit of bargain hunting, also with excitement injected into the sector with the Xstrata/Lonmin news yesterday,' said Richard Hunter.

Continuing in commodity news, oil heavyweights ticked up on the back of rising crude prices, with BP up 15 pence at 536, Royal Dutch Shell taking on 27 pence to 1,804, and BG Group adding 37 pence to 1,107.

In other earnings news, Smith & Nephew added 28-1/2 to 596 after Europe's biggest medical device maker posted better-than-expected second-quarter adjusted earnings, as revenues hit $1 billion for the first time.

MIDCAP NEWS

Halma was off 8-3/4 at 194-3/4 after Goldman Sachs downgraded the group to 'sell' from 'neutral'.

In earnings news, Benfield Group lost 8-1/4 at 240 as it posted a 0.4 percent fall in first-half trading profit on Thursday, hit by the softening reinsurance market.

Among mid-cap risers, on the broker front, Dana Petroleum rose 67 pence to 1,344, helped by Goldman Sachs upgrading its recommendation to 'buy' from 'neutral' as it reviewed its exploration and production coverage.

And, Laird Group gained 10-1/2 at 325 after Goldman Sachs upgraded the company to 'buy' from 'neutral'.

SMALLCAP NEWS

An upbeat statement lifted Creston 3.5p to 48.75p. The insight and communications concern said the diversified nature of the group, with a heavy weighting in market research and direct marketing, is proving a resilient model as demonstrated by the first quarter revenue growth achieved in a volatile economic climate.

Story supplied by MoneyAM

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