London midday: Data gives blue chips a boost

16th Dec 2009 12:14

Footsie is maintaining most its early gains after some better-than-expected unemployment data. The number of people claiming unemployment benefit fell for the first time since February 2008 in November amid further signs the UK economy is beginning to recover from the economic downturn.The claimant count fell by 6,300 to 1.63m during November, figures from the Office of National Statistics (ONS) show.Part-nationalised lender Royal Bank of Scotland is down even though it is 'less risky than it used to be,' according to Citigroup analyst Leigh Goodwin. The broker has revised its forecasts for RBS, however, and now expects underlying losses per share for full year 2009 of 12.2p, with the losses reducing to 3.7p in 2010 and then turning positive at 0.7p in 2011. There is not a single quoted company in the housebuilding sector that Citigroup does not like now that the sector has seen a 20% correction in prices in the last three months. Underlying fundamentals have improved during that period, prompting Citi to upgrade Barratt Developments, Taylor Wimpey and Redrow to 'buy'. It has been a busy morning for company statements ahead of the holiday wind-down. Overall demand at GKN has been better than predicted at its last update in October and the automotive and aerospace engineer expects to make further "significant" progress in 2010. Retailer Kesa Electricals has reported a bigger than expected first half profit and better than forecast like for like sales at its Comet chain. The group made adjusted pre-tax profit of £14.9m in the six months to 31 October, trumping analysts' predictions for about £12m. It lost £103.8m a year ago due to a £114m charge. Like for like sales at Comet rose 2%, ahead of forecasts for 0-1.5%.Pub chain Punch Taverns cautioned the challenging economic environment will affect profitability in the short term and also put pressure on one of its debt measures.Oil & gas facilities service provider Petrofac expects full year profits to be at least 25% higher than last year. The company has had a good year in the contracts front and said that with trading across most of its businesses continuing to improve, it should make profit after tax of at least $330m, barring unforeseen circumstances. Power station operator Drax expects underlying profits to beat market forecasts this year, despite lower prices for electricity, but is more cautious on pricing going forward.A US Food and Drug Administration (FDA) advisory committee has given a favourable verdict on the use of AstraZeneca's anti-cholesterol drug Crestor. Film studio Pinewood Shepperton said trading for 2009 has remained in line with market expectations.