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FTSE ends session marginally weaker

END-OF-DAY REPORT: Headline shares ended the session marginally weaker, 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 the close of play, the FTSE100 was down 8.6 points at 5,477.5 with the FTSE250 off 42.8 points at 9,088.7 and the FTSE Smallcaps 3.6 points lower at 2,799.3.

NEW YORK

Wall Street remained weaker, albeit off its lows, as a surprise increase in pending home sales overshadowed a jump in weekly unemployment claims and disappointing same-store sales from Wal-Mart Stores.

At London's close, the Dow Jones Industrial Average was down 119.2 points to 11,536.2, off a low of 11,489.4.

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 4.5p at 87.2p, after the insurer posted a 20% drop in first-half profit, at the low end of expectations, to £211m.

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

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 24p to 965p, while Liberty fell 48.5p to 851.5p.

International Power fell 14p at 407p following the release of its interim figures, which revealed plant outages going forward.

The UK power generator posted a 19% rise in first-half operating profit, but said second-half operating profit is expected to be dented by £45m 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 leaderboard, up 100p at 1,117p, Antofagasta was up 24p at 566.5p and Vedanta Resources added 28p to 1,856p.

'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 11p at 532p, Shell taking on 6p to 1,749p and BG Group adding 36p to 1,106p.

In other earnings news, Smith & Nephew added 29.5p to 597p after Europe's biggest medical device maker posted better-than-expected second-quarter adjusted earnings, as revenues hit $1bn for the first time.

MIDCAP NEWS

Halma was off 6.75p at 196.75p after Goldman Sachs downgraded the group to 'sell' from 'neutral'.

In earnings news, Benfield Group lost 9.25p at 239p as it posted a 0.4% fall in first-half trading profit, hit by the softening reinsurance market.

Among the risers, on the broker front, Dana Petroleum rose 73p to 1,350p, helped by Goldman Sachs upgrading its recommendation to 'buy' from 'neutral' as it reviewed its exploration and production coverage.

SMALLCAP NEWS

An upbeat statement lifted Creston 2.25p to 47.5p. 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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