London close: FTSE 100 closes 32 points lower

24th Nov 2009 16:48

London ended the day in the red as the FTSE 100 lost its earlier gains after Wall Street opened sharply lower. London did not sustain a short-lived rally in the late afternoon. The market seemed to initially ignore Bank of England governor Mervyn King's cautious comments to the House of Commons Treasury select committee on the state of the economy. However, gains made in the middle of the day were soon lost in the afternoon and there was a sharp dip in the last 30 minutes of trading.Lloyds Banking Group is the top performer as investors sniff a bargain in the form of its world record £13.5bn rights issue, which will offer existing shareholders new shares at 37p each, a discount of 59.5% to last night's closing price. Britain's third-largest lender will offer shareholders the chance to buy a total of 36.5bn shares on the basis of 1.34 new shares for every 1 share held. The cash call represents a discount of 38.6% to the theoretical ex-rights price based on Monday's closing price, in line with previous indications. Other banks fared less well, with Standard Chartered, HSBC and Royal Bank of Scotland all lower after ratings agency Standard & Poor's said that nearly all of the world's big banks are weakly capitalised. Barclays ended the day slightly higher, however.Elsewhere in the financial sector, hedge fund manager Man Group is dented by a broker downgrade from Credit Suisse. With sterling dipping after King's comments, package holiday firms Thomas Cook and TUI Travel feature among the Footsie's worst performers. Water supplier Severn Trent posted a rise in turnover and profits in the six months to September 30 and lifted its dividend ahead of the regulator's final decision on how much it can charge customers over the next five years. Sticking with utilities, energy provider International Power receives a boost from Evolution Securities reiterating its 'buy' recommendation. Among retailers, Marks & Spencer and Home Retail get a lift from positive comment from Nomura Securities, which also likes HMV and KESA in the sector. Tile and flooring retailer Topps Tiles is to shore up its balance sheet with a placing that could raise up to £15m. Investment company Alliance Trust beefed up its exposure to equities to 90.6% during the quarter ending 31 October, with particular focus on stocks that will benefit from an upturn in economic activity. Housebuilder Bovis announced that its finance director Neil Cooper will leave the company to take up the same position at bookmaker William Hill. Home maintenance specialist Homeserve is the best performer in the FTSE 250 as it predicts a year of "strong growth", after its core business did well at the half way stage. Petrofac, the oil & gas facilities service provider, said it has established a joint venture agreement with Zamil to create and operate a new service centre facility in Saudi Arabia. Condom and footcare products supplier SSL posted a sharp rise in profits in the six months to September 30, as strong growth in emerging markets helped drive sales higher. Pre-tax profits totalled £51.9m compared with £32.5m. Intermediate Capital, an investor in and manager of buyout debt, is higher after it saw profits plunge 80% in the six months to 30 September, but was more upbeat about prospects. Profit before tax for the period was £8.1m, down from £39.8m a year ago. It includes a £7.6m positive impact of fair value movements on derivatives held for hedging purposes. 'We are encouraged by early signs of stabilisation in the wider economy but remain extremely cautious as to the pace and nature of a broad economic recovery," said chairman John Manser. Lloyds List publisher Informa confirmed reports it is in discussions over the possible acquisition of German publisher Springer. In a statement, Informa said it has been given access to Springer's books and will make a proposal to its shareholders, though it added no agreement on price has been reached yet. The shares have fallen back on fears that any bid for Springer will require the company to issue more shares so soon after its £242m rights issue in May. One-off charges lowered first half profits at banknote printer and cash handling machines specialist De La Rue, but currency translation benefits and good banknote demand meant a strong underlying performance. Specialist mortgage lender Paragon is considering increasing its lending book again after bad debts stabilised in the second half and wholesale funding markets picked up. Shares in CML Microsystems dived after the integrated circuits manufacturer said that it may drop its listing. Shares in AIM-quoted digital networking business imJack halved after it said that it required further funds. It will draw down the £500,000 loan facility from its chairman by the end of December. The company plans to raise money before the end of January 2010 and it will need the cash to continue trading. Disappointing revenue generation by environmentally friendly pesticides developer TyraTech knocked its share price. Revenues will be around $6m in 2009 and there should be $1.6m left in the bank. AIM-quoted TyraTech is looking at financing options. Andor Technology reported a 67% rise in half-year profits but the digital camera technology developer said it remains cautious about the economic outlook. Lupus Capital is sharply higher after announcing the appointment of ex-Foseco chief executive Jamie Pike as non-executive chairman with immediate effect. Michael Jackson, who became non-executive chairman on 1 July 2009, will revert to being a non-executive director.