London midday: Defence stocks beat a retreat

9th Jun 2009 12:05

Leading shares are now lower, dragged down by expectations of a weak start on Wall Street and by a trimming of the strong early gains made by miners.Lloyds Banking Group is still in the blue on reports it is to axe a further 1,500 jobs and close the branch network of Cheltenham & Gloucester. GlaxoSmithKline is also firmer after entering into an agreement with Chinese gene engineering drug group Shenzhen Neptunus Interlong Bio-Technique to develop and manufacture influenza vaccines for China. On the downside, defence stocks Cobham and Rolls-Royce remain in the doldrums after bearish broker comment yesterday which suggested that a reduction in military commitments by the US and UK in Afghanistan and Iraq will hurt the companies' order books.Housebuilder Berkeley Group is the worst performing TSE 250 stock after Citigroup placed 16.1m shares in the company at 701p on behalf of cash-strapped Saudi bank Saad. The Saudi bank is known to have a chunky holding in banking giant HSBC, and speculation that it may offload some or all of its stake in HSBC is weighing on HSBC's share price.Heritage Oil is merging with Turkish exploration and production group Genel to create an oil company big enough to join London's FTSE 100 index. Bus and train operator Go-Ahead's Govia joint venture has retained its South Central rail franchise for another five years ten months, it confirmed today. The UK firm, which owns 65% of the business, says the Department for Transport (DfT) has decided to keep it on until 25 July 2015. Spread betting firm IG Index expects to post a strong rise in profits for the 12 months to March 31 after a good finish to the year. Adjusted pre-tax profits should come in at £125m, compared with £98m the previous year, on revenues that climb to £257m from £184m. The firm said year-on-year organic revenue growth was 18% in the final quarter, compared with 12% over the third quarter, despite lower market volatility.Punch Taverns has further rationalised its pub portfolio with the disposal of 11 outlets to rival Greene King for £30.4m cash. The pubs to be sold are freehold outlets located in central London, the south east of England and Scotland. The consideration will be satisfied in cash. Engineer GKN is wanted after Merrill Lynch upgraded the stock from 'neutral' to 'buy', while Misys, the supplier of IT solutions to the banking sector, gets a boost from Deutsche Bank, which lifted its rating from 'hold' to 'buy' and upped its price target for the stock from 135p to 200p. Tighter regulations on banks in the wake of the credit crisis helped financial software group Norkom post a slight rise in profits in the year to March 31.London black cab maker Manganese Bronze is to raise £9.4m through a placing at 187p to speed up the development of its international operations and a new taxi engine. The firm also warned that overall vehicles sales for the four months to the end of April are down 18.7% to 699 vehicles versus 860 vehicles in the comparable period last year.Optical components and systems maker Gooch & Housego reported an 11.3% drop in half year EBITDA and axed its dividend as challenging conditions continue. Beer flow monitoring system manufacturer Brulines posted a rise in profits and revenues in the year to March 31, even as pubs and other customers cut back on capital spending amid tough economic conditions.Services group Mavinwood saw losses extend in the year due to the weak performance in its emergency repair division, but the group posted gains after it sold both the Ansa and Independent businesses to the incumbent management team backed by Lloyds TSB Development Capital Limited for £19.55m.FTSE 100 - RisersThomas Cook Group (TCG) 221.25p +3.27%Home Retail Group (HOME) 254.00p +2.42%Tullow Oil (TLW) 979.50p +2.03%Lloyds Banking Group (LLOY) 62.30p +1.96%FTSE 100 - FallersCobham (COB) 168.80p -3.16%Pearson (PSON) 620.50p -2.59%Aviva (AV.) 346.75p -2.12%Marks & Spencer Group (MKS) 277.75p -2.11%