London afternoon: Miners a drag

21st Oct 2009 14:38

Mining stocks and a couple of blue-chips going ex-dividend today pushed the Footsie below 5200 in the morning session though the index showed some signs of recovery over the lunch-time session.Smiths Group and BSkyB are the highest profile stocks in the red as a result of trading in ex-dividend status today. Also on the downturn is London Stock Exchange, after Goldman Sachs expunged the shares from its 'conviction buy' list. Results are not helping. Home Retail reported a 3% rise in half year sales and said trading at both Argos and Homebase exceeded its expectations. Sales rose to £2,805m in the 26 weeks to 29 August from £2,736m, reflecting growth of 1.7% at Argos and 4.4% at Homebase. Like-for-like sales were down 2.1% at Argos and up 2.8% at Homebase.Elsewhere in the retail sector, speculation about a bid for Sainsbury has revived interest in the supermarkets, although Sainsbury itself falls victim to profit taking. Tesco and Morrisons lead the sector higher, with the former boosted by Japanese broker Nomura Securities lifting its price target from 405p to 526p.Broker comment is also lighting a fire under the share price of plumbing supplies merchant Wolseley. Merrill Lynch has raised its rating on Wolseley from 'underperform' to 'buy'.Merrill Lynch has also turned more positive on property stocks Hammerson, upgraded to 'buy' from 'neutral', and Land Securities, now rated 'neutral', having previously been expected to underperform.Pharma giant Shire today updated the market on its replagal treatment, saying it plans to file a licence application with the US Food and Drug Administration by the end of the year. The shares trade higher after Morgan Stanley edged its price target for the stock higher to 1214p from 1200p.Power station operator Drax is trading in line with expectations for the current year but said conditions remain challenging. 'Since publishing our half year results on 4 August, trading conditions in the commodity markets in which we operate remain challenging,' said the group. Cadbury has thrown down the gauntlet to potential bidder Kraft by upping its guidance for 2009 revenue growth to the middle of its 4-6% goal range and stating its underlying operating margin improvement will be at least 135bps in constant currency. Miner BHP Billiton reported record iron ore production over the past three months amid signs of stabilising demand from both emerging and developed countries. 'Over the last three months there has been increasingly positive economic news across most economies. Chinese economic growth continues to be robust on the back of strong domestic focused consumption and infrastructure-based stimulus spending,' it said.BHP Billiton is trading lower on the day but is not as severely hit as sector peers Lonmin, Xstrata and Fresnilo as metals prices soften.Demand for property ahead of the Olympics helped East London focused housebuilder Telford Homes nearly double completions in the past six months, but a lack of mortgage finance remains a constraint.Online gaming technology developer Playtech said activity improved towards the end of the third quarter and momentum has continued into the start of the fourth quarter.Latin American oil and gas exploration and production company GeoPark gained after announcing the successful drilling and testing of a new discovery oil well - Yagan Norte 1 - in the Tobifera formation on the Fell Block in Chile.Zambian-based Kiwara said its in-fill drill programme at Kalumbila continues to report thick intersections of copper at or above base model grade.