London afternoon: Barclays hit by lawsuit

17th Dec 2009 13:55

Footsie remains deep in negative territory, and with US markets set to open lower, there is no prospect of a boost from Wall Street.Banks and miners are responsible for much of the blue-chip index's fall. Lloyds Banking is leading the fallers, while Standard Chartered and Barclays are also among the worst performers. The latter's Barclays Capital Real Estate unit has had a lawsuit filed against it by the state of Ohio's attorney general in the US, who alleges that the unit provided 'inadequate, incompetent customer service" to people faced with foreclosure on their homes.Among the miners, Antofagasta, Eurasian Natural Resources and Xstrata are under pressure as the dollar revival continues and metals prices soften.There have been no company updates in the FTSE 100, but Societe Generale has been casting its eye over Marks & Spencer. The High Street stalwart is still capable of showing less venerable competitors a clean pair of heels, according to the broker, which is tipping the retailer to see 'a greater bounce-back ahead of the Christmas peak than young fashion retailers.'In contrast, Credit Suisse sticks the boot into Argos owner Home Retail, after highlighting that prices in the Argos catalogue are down 6% relative to the Autumn/Winter catalogue. The broker has downgraded the shares to 'underperform' on fears that the margins will remain under pressure.Oil and gas firm Melrose Resources leads the way among second liners after raising its estimate of average daily production following a productive third quarter.With just two weeks to go before the year end, oil and gas facilities service provider Wood Group believes 2009 earnings will be in line with expectations. Rail and bus group Arriva is also trading in line with expectations and says there is evidence of a recovery in passenger revenue growth in its UK trains division. Passenger revenue for CrossCountry rose 2.1% in the first 48 weeks of 2009, but was up 6.1% in the 13 weeks ended 12 December.Estate agent Savills expects its underlying performance for 2009 to be "significantly" ahead of previous forecasts, but it remains cautious about the sustainability of the current performance of UK residential and Asia Pacific transaction markets in 2010. Construction and regeneration group Morgan Sindall is still on track to meet expectations for the current year. Its forward order book has eased to £3.2bn from £3.6bn at the end of June, although it is supplemented by over £900m of projects at preferred bidder stage, all of which have been awarded during the second half of this year.Car dealer Inchcape expects 2009's performance to be slightly ahead of forecasts. Total revenue for the first 11 months of 2009 was down 11.4% on a year ago in constant currency terms, while like for like revenue fell 15.6%.Personal care products group McBride expects operating profit in the first half to exceed forecasts. First half revenues are expected to be ahead of last year, driven by continuing growth in the France and Italy household markets, and in personal care, as well as a favourable currency translation impact.Citigroup has downgraded its earnings estimates for cash strapped Punch Taverns after the pub group's underwhelming interim management statement earlier this week, though it has retained its 'hold' recommendation.New AIM listing Better Capital, the new vehicle of Alchemy founder Jon Moulton, made a steady in first trading today. Moulton says Better will focus on distressed companies in the UK and Ireland worth between £5m and £25m.