London afternoon: Blue chips hang onto gains

5th Aug 2009 14:27

Footsie is holding its own in the afternoon session with Lloyds soaring despite a massive interim loss.US shares have made a dull start on worse than expected job losses in July according to the private firm ADP. It said 371,000 people were laid-off compared to estimates of 350,000. The survey is a seen as a good indicator for the monthly non-farm payroll figures.Lloyds Banking shares are up over 12% as investors bet that the worst of the bad debts that caused an underlying loss of £4bn in the half year to June are passed. Impairment charges jumped by nearly £11bn to £13.4bn, reflecting huge write-downs of HBOS's commercial property loans. Lloyd's expects these to come down from here. Royal Bank of Scotland, which reports on Friday, is up in sympathy as is Barclays.British Airways is a big riser too after its peers reported good numbers. Continental Airlines released robust traffic figures for July yesterday while Hong Kong's Cathay Pacific returned to profits in the first-half.Property stocks are continuing to post gains today, with Hammerson, British Land and Land Securities higher, but the progress is being hampered by AstraZeneca, BG Group, F&C Inv Trust, Reckitt Benckiser Group, Shell and Thomas Cook going ex-dividend.Volatile stock markets took their toll on life group Standard Life's first half with pre-tax profits tumbling and the group sliding into a loss after tax. Profits in the six months to June fell from £534m to £348m on an embedded value basis, while it posted a net loss of £48m compared with a profit of £7m. The interim dividend rises by 2% to 4.15p.Old Mutual has named Patrick O'Sullivan as its new chairman just as the South African insurer announced an 81% slump in half-year profits. O'Sullivan, recently retired as vice chairman of Zurich Financial Services, will take over from Chris Collins when he retires at the end of 2009.Carpet retailer Carpetright is the best performer after an impressive rise in like-for-like sales in UK and Ireland in the 13 weeks to August 1. In the UK and Ireland, total sales climbed by 7.5%, while like-for-like sales were up an 'encouraging' 1.4%. Tiles and wood flooring retailer Topps Tiles remains on track to meet full year expectations following a small improvement in like for like sales. Continued weakness in equity markets despite the recent rally, unhelpful currency movements and low interest rates all helped to push F&C Asset Management into losses at the interim stage.Paper and packaging group Mondi fell into losses in the first half of the year as the global economic downturn hit demand for its products. In the six months to June, the company saw reported pre-tax losses of €1m, compared with €171m over the same period the previous year as revenue fell to €2.6bn from €3.3bn.Hovis to Branston Pickle maker Premier Foods has reported a first half loss, but remains on course to match full year forecasts. The group posted a loss of £30m before tax from continuing operations for the six months to 27 June 2009 compared with a profit of £2m in 2008. Turnover rose 3.5% to £1.25bn.Ferrexpo saw profits slide 82% in the half of the year as commodity prices tumbled but the Ukrainian iron ore pellet producer said it was seeing signs of normalisation in the market with spot prices for iron ore increasing. It posted a pre-tax profit of £28.7m, compared with £157.7m over the same period the previous year as revenues slumped to $301.8bn from $519.5bn.Soft drinks group Nichols anticipates profits for the year will exceed current expectations after a strong first half.