London midday: Miners lead strong rally

2nd Feb 2010 12:15

Footsie has moved into the blue as gains in the mining sector help offset falls among oil stocks after BP's fourth quarter figures failed to impress.BP chief executive Tony Hayward described it as a 'very good' year for the company with a sharp increase in fourth quarter profits, but they came in below analysts' forecasts and the shares have been punished. Underlying replacement cost profit in the fourth quarter was up 70% on a year earlier at $4.4bn. Shell is lower in sympathy.Miners are offsetting the weakness among oil majors. ENRC, Rio Tinto, Xstrata and Kazakhmys are higher. Rio has been upgraded to 'buy' from 'hold' at Citgroup after upgrades to iron ore prices. It also announced that it has completed the sale of its Alcan packaging business to Australian packaging firm Amcor for $1.95bn. Cigarette manufacturer Imperial Tobacco has made a strong start to the year, winning market share in growing markets such as Africa, the Middle East and Asia Pacific. The firm said its Davidoff brand has grown share in its top five markets and that West and JPS have also performed well.Market share gains and growing demand for smartphones kept chip designer Arm ahead of its rivals at the end of 2009, though sales and profits were still lower in the quarter. Fourth quarter revenues were $140m, down 6% on 2008, compared with an industry fall of about 15%. Sterling revenues were £85.2m, down 10% year-on-year.Cable & Wireless confirmed it will pay a dividend of 9.5p this year and a similar amount the following year in its final update before it splits into two in March. Fashion retailer New Look has outlined its plans to float on the London Stock Exchange as it seeks to fund continued expansion. It will seek to raise about £650m from a primary offering 'to be used to de-leverage the balance sheet so as to provide New Look with the flexibility to fund its continued growth.' Dairy Crest said pre-tax profit for the nine months ended 31 December 2009 is slightly ahead of company expectations, helped by a strong performance in the last three months. Engineering support services group Babcock remains on track for 'another year of excellent progress'. The group said the long term growth prospects of its main markets 'remain excellent' while the order book remains solid at around £6bn.Defence industry supplier Ultra Electronics has won a contract for nuclear sensors from British Energy. The contract is worth more than £20m, and is for the long term supply and management of neutron flux detectors to a number of reactors in the British Energy fleet.