London afternoon: US retail sales data spooks equities

11th Jun 2010 14:40

Footsie's morning gains evaporated over the lunchtime session after much worse than expected US sales figures were released. US retail sales had been expecting to rise 0.3% in May after climbing 0.4% in April but instead of rising they took a step back for the first time since September, falling 1.2%.Sales of building materials fells off a cliff, which has not done much for mining firms; Antofagasta, Rio Tinto, Lonmin and Anglo American are the worst performers in the mining sector.BHP Billiton chairman Jac Nasser has written to shareholders to restate the mining giant's opposition to the new super tax on the mining industry proposed by the Australian government. He said meetings with government representatives since the controversial plan was first announced on 2 May have been about how the tax would be brought in, not about its "major design features (and flaws)". Standard Chartered is out of favour on rumours it is preparing to splash out $1.4bn on a 46% stake in Indonesia's Panin Bank.BP is still in positive territory, despite press reports that the company is planning to suspend dividend payments and instead put the money in escrow, ready to be released to shareholders once the company knows how much it will have to pay out in relation to the Gulf of Mexico oil spill disaster.The report has not been confirmed by the company. The embattled BP chief executive Tony Hayward has, however, told the Wall Street Journal that "all options" are being considered regarding the dividend.Reed Elsevier was one of the morning's bright spots after Morgan Stanley upgraded the publishing group to "overweight" from "equal weight". Home Retail, meanwhile, claws back some of yesterday's losses even though Citigroup has reacted to the retailer's disappointing figures on Thursday by slicing its target price for the stock.Nickel and zinc miner Talvivaara Mining has got its second production line up and running at its metal recovery plant. The production line is currently operating well and will be ramping up towards its full capacity during the upcoming months, the company said.Underwriters are a strong sector after Brit Insurance last night rejected a £10 per share indicative takeover approach from US private equity firm Apollo saying it significantly undervalued the group. Rivals Catlin and Amlin are up in sympathy.Pub group and brewer Fuller's is cheering even before the World Cup starts. The London-based group posted record profits last year as its managed pubs and hotels pushed forward with its brewing business also going well. Profits in the year to March jumped 86% to £26.8m, with underlying profits 17% ahead at £26.6m - well ahead of market forecasts. Bury St. Edmund's based brewer and pubs group Greene King meanwhile has bought four freehold pub restaurants from cash constrained competitor Punch Taverns for £5.3m. The pubs which are located in "highly attractive, food-led, destination sites in Aberdeen, Northampton and Nottingham," Greene King said.Real estate investment trust Hammerson has bought a long leasehold on Leadenhall Court, a City of London office building, for £65m including transaction costs. The building is fully let until March 2014. Passing rents are £7.16m per annum reflecting an initial yield of 11%.Jarvis Securities is at its highest in over three months after the retail stockbroker did a deal to provide a branded execution-only share dealing services for mobile media firm Worldlink Group.