London afternoon: Banks dominate as Footsie rises

3rd Aug 2009 14:50

Footsie is still well in the blue with HSBC and Barclays leading the way and a decent start on Wall Street helping the mood.HSBC posted a profit before tax of $5bn during the period, down from $10.2bn a year ago, but just ahead of forecasts. It said it is 'pleased' with the results.Barclays delivered profits of £3bn for the first half, an increase of 8% against the same period last year, despite £4.56bn of bad debt charges. Profit before tax for the period rose to £2.98bn from £2.75bn last year as it posted record income of £16.25bn up 37%. The numbers were as analysts expected.Oil prices have climbed above $71 per barrel on dollar weakness and a bullish manufacturing survey from China. Oil services specialist Petrofac is a good performer on a UBS upgrade and a £10 price target.Other commodities are also strong with and miners are up on rising metal prices and hopes for the US economy. Randgold, ENRC and Anglo American are the best performers. AstraZeneca has received approval from the US Food and Drug Administration for the use of its ONGLYZA to treat type 2 diabetes in adults. The treatment, which has been developed in collaboration with the biopharmaceutical company Bristol-Myers Squibb, is used to improve blood sugar control levels in diabetics.On the downside, Hammerson on an increased loss of £819m in the half-year to June, up from £417m, as its portfolio dropped by 27% to £4.75bn. NAV fell by 27.7% to 373p. Land Securities and other property groups fell in sympathy even though Hammerson suggested the property market might be stabilising. Packaging group Rexam is to reduce its annual can making capacity by 1.3bn tonnes with the closure of its Dmitrov plant in Russia to save an annualised £6m in 2010. Restructuring costs will total £16m for 2009, it said.Pub group Mitchells & Butlers has confirmed the appointment Adam Fowle as chief executive with immediate effect after two months doing the job in an acting capacity. Fowle has been on the M&B board since October 2007 when he was appointed Managing Director for Restaurants.Online gambling firm 888 posted a fall in operating income as poker revenues softened. Total operating income in the three months to June 30 totalled $61m, compared with $69m in the same period the previous year. 'We expect further progress during the second half of the year especially during the fourth quarter,' the firm said.