London close: Snow deluge buries Footsie

6th Jan 2011 16:43

Footsie succumbed to the growing list of businesses hit by the snow over the Christmas holidays and closed lower for the first time this week.December's snowfalls cost British Airways about £50m in the third quarter and a little more at the start of January. BA, due to complete its £5.7bn merger with Spain's Iberia this month, said December traffic, measured in Revenue Passenger Kilometres, fell 8.3% last month, with premium traffic down 1.6% and non-premium by 9.6%.Miners such as gold group Randgold and industrial metals specialists Vedanta Resources and Xstrata also fell back after strong gains seen yesterday. Antofagasta was weak after Nomura downgraded the copper miner from a 'buy' to 'reduce' after the shares more than doubled over the last six months. "We think the risk to our forecasts is that copper prices experience an even more aggressive short-term price 'spike', fuelled by the introduction of copper exchange-traded funds but also with a much greater risk of a boom-bust scenario similar to the nickel market in 2006-07," it said.BP held up well for most of the day even though a 48-page report in to the Gulf disaster blasted safety standards across the industry, but reserved special attention for BP, Halliburton and rig-owner Transocean. Observers suggested that as BP was not held solely responsible for the Gulf of Mexico spill it would not be hit with additional costs beyond the $20-25bn already suggested.Chip designer ARM was one of the best performing blue-chips, adding to yesterday's strong gains, as US technology giant Microsoft confirmed at the Consumer Electronics Show in Las Vegas that it is planning a new operating system for handheld tablet computers and smartphones that use ARM's chip designs. The decision represents a huge breakthrough for ARM. Traditionally, Microsoft has developed its operating systems to work with the chip design architecture of Intel, so much so that the Windows desktop environment is often referred to as "Wintel".It was another tough day for retailers. Mother and baby retailer Mothercare warned that it now expects full year underlying pre-tax profit to be below current market expectations after disappointing Christmas sales. UK like for like sales in the third quarter fell 5.8% as freezing temperatures kept would be shoppers at home. Greetings card specialist Clinton Cards also pointed to the negative impact of wintery weather in the run-up to Christmas, warning that pre-tax profits for the year to July 31 are likely to fall short of current market expectations. Like-for-like sales fell by 2% from the same period a year ago at its UK stores in the five weeks to 2 January. The snow stopped rich clients getting to upmarket jeweller Theo Fennell this Christmas, causing a drop in sales and a warning that full-year results will miss forecasts. Uncertainty in the retail sector has prompted McBride, which makes toothpaste and other own-label household items for supermarkets, to warn that its full-year performance could be at the lower end of its expectations. Household goods maker Reckitt Benckiser slid in sympathy.However, it's not all doom and gloom in the retail sector. Wine merchant Majestic Wine raised a glass to Britons' refusal to let the winter snowfall prevent them celebrating Christmas after reporting strong sales over the festive period. Total UK store sales, excluding VAT, were up 6.4% for the nine weeks of Christmas trading from 2 November 2010 to 3 January 2011. Over the same period, like for like UK store sales growth, excluding VAT, was 3.7%. Nichols, the soft drinks group behind the fruity beverage Vimto, expects profitability for the full year to be ahead of current market expectations after the strong performance of the first half continued into the second.Recruitment giant Hays, another strong performer today, grew net fees by more than a fifth during its second quarter as rapid growth at the international business made up for a drab performance in the UK.Asia-focused oil company Salamander Energy is getting into position for its upcoming drilling programme in Thailand, although one of the drill rigs is currently being held up in Malaysia.Construction and engineering group Costain has returned to the table with what it terms "a significantly enhanced proposal" to take over contractor Mouchel. The new offer is on the basis of 0.5947 Costain shares for each Mouchel share, valuing each Mouchel share at about 135p.Heavy snow in December kept some film buffs away from Cineworld's cinemas, but the growing popularity of 3D animation films helped the company post a rise in sales over the full year.FTSE 100 - RisersBritish Airways (BAY) 300.20p +4.38%Marks & Spencer Group (MKS) 388.20p +3.52%Resolution Ltd. (RSL) 243.30p +3.49%BAE Systems (BA.) 350.90p +2.66%FTSE 100 - FallersFresnillo (FRES) 1,578.00p -5.34%Essar Energy (ESSR) 556.00p -3.30%Antofagasta (ANTO) 1,537.00p -3.09%African Barrick Gold (ABG) 581.50p -3.08%FTSE 250 - RisersTaylor Wimpey (TW.) 35.00p +6.71%Regus (RGU) 96.00p +4.40%Domino's Pizza UK & IRL (DOM) 586.00p +4.36%Ashtead Group (AHT) 171.10p +3.89%FTSE 250 - FallersMcbride (MCB) 173.00p -5.88%Mothercare (MTC) 565.00p -5.52%Ocado Group (OCDO) 190.00p -5.00%Kenmare Resources (KMR) 32.15p -4.60%