London open: BP drags market lower

4th May 2010 08:47

London has fallen in early dealings with resources stocks under pressure from the Gulf of Mexico disaster and a new Australian tax.BP is down heavily following falls on Wall Street yesterday. It has denied responsibility for the rig explosion that caused the problems, but expects to meet the clean-up costs that are now being estimated in the tens of billions. Other oil groups are down in sympathy. BHP Billiton and Xstrata meanwhile have reacted angrily to the Australian government's plans to introduce a new resource rent tax and say the levy may jeopardise future investments. PM Kevin Rudd wants to slap a 40% tax on resource projects from July 2012, which could raise about A$12bn ($11bn) in the first two years. BHP said the new tax would increase the total effective tax rate on the group's profits earned from its Australian operations from 43% to 57% from 2013.Emerging markets focused bank Standard Chartered said it has made a very strong start to 2010, with income and profit both higher than in the first quarter of 2009. The group said there has been an improved balance between the two sides of the business with Consumer Banking playing catch-up on the Wholesale Banking arm.British Land and private equity giant Blackstone have confirmed plans for a major revamp of Broadgate, the huge office complex in the heart of the City of London, which will see new offices built for UBS. The Swiss bank currently rents 850,000 sqft of office space in six of Broadgate's buildings for about £39m a year.Security group G4S has continued in 2010 where it left off in 2009 with no material change in trading performance or market conditions. Revenues grew 4% at constant exchange rates in the first quarter from the first quarter of 2009. Using actual exchange rates sales grew 2.1%.Underlying profits almost trebled at fund manager Aberdeen Asset in the first six months of the year as a recovery in equity markets and lower costs helped margins soar. Pre-tax profits to March jumped from £17.9m to £59.5m with underlying profits up from £33m to 92.6m on sales up from £192m to £295m. Funds under management jumped from £96bn to £173bn, while the group stopped the outflow of funds, pulling in £0.1bn against an outflow or £8.5bn this time last year.Recruitment company Michael Page will have to give £12m back to the taxman by the end of this month after agreeing a deal for a refund of overpaid VAT. The group will keep £38m of the £50m originally received from Her Majesty's Revenue and Customs (HMRC).Balfour Beatty has secured contracts with track Network Rail, which owns Britain's rail infrastructure, worth as much as £248m.