London open: One in the eye for Admiral

9th Nov 2011 08:56

In keeping with most markets across the globe, London is on the up in the wake of the decision by Italian Prime Minister Silvio Berlusconi to proffer his resignation.Look below the surface, however, and you will see that the top-share index's modest rise is largely due to the strength of mining stocks, such as Xstrata, Rio Tinto, Kazakhmys and ENRC.STUCK IN REVERSEActing as a drag on the index are car insurer Admiral and oil outfit Tullow, the former after lowering profit expectations for the year and the latter after cutting its production forecast. Banking giant HSBC is also weighing down the index. Admiral's group turnover increased by 30% to £582m in the third quarter of 2011 from £446m the year before, but the company warned that full-year pre-tax profits will be towards the lower end of market estimates if there is no reversal of the current trend of a higher than normal level of large insurance claims.Tullow said "group production for 2011 is now expected to average 79-81,000 barrels of oil equivalent per day (boepd) due to slower than expected ramp up from the Jubilee field.GULLIVER'S TRAVAILSHSBC, the UK's biggest bank has seen a massive drop in underlying pre-tax profits in the three months to the end of September. In 2010 the figure for the third quarter was $4.6bn, this year it is down to $3bn. HSBC blames decreased revenues in its investment banking division, an adverse movement in its hedging strategy of $0.7bn and an increase in loan impairment charges, primarily in North America.Group chief executive Stuart Gulliver emphasised that the travails of HSBC are not specific to the company but industry wide. Elsewhere in the financial sector, acquisitive insurance group Resolution is also on the slide, despite announcing a 'transformational' outsourcing arrangement with Diligenta, an insurance services specialist that is part of Indian information technology (IT) contractor Tata Consultancy Services, that it says will save it pots of money.IN THE GLOOMGas and electricity group SSE saw its adjusted profit before tax fall 25.4% for the half year to September.Talvivaara Mining saw net sales kick on in the third quarter, rising to €60.6m from €45.1m in the corresponding quarter of last year. However, the company fell into the red at the pre-tax level, losing €3.4m compared to a profit the year before €5.1m. EDGING HIGHERJ Sainsbury, the owner of Britain's number three supermarket chain, has seen profits before tax rise to £354m in the first six months of this year, a 6.6% improvement on the same point last year and a touch above analysts expectations of around £350m. Like-for-like sales, which strip out new store openings, were up 1.9%.Bus and train firm FirstGroup said trading in the six months to the end of September has been in line with expectations, with profit before tax up 56.2% to £127.8m from £81.8m the year before, on revenue that grew just 3.2% to £3.17bn from £3.07bn.FTSE 100 - RisersXstrata (XTA) 1,053.50p +2.58%Legal & General Group (LGEN) 108.10p +2.27%Rio Tinto (RIO) 3,599.00p +2.24%Royal Bank of Scotland Group (RBS) 22.83p +2.24%Kazakhmys (KAZ) 970.00p +2.05%Eurasian Natural Resources Corp. (ENRC) 700.50p +2.04%Lloyds Banking Group (LLOY) 29.49p +2.04%Vedanta Resources (VED) 1,305.00p +1.79%Weir Group (WEIR) 1,944.00p +1.73%Aviva (AV.) 329.40p +1.60%FTSE 100 - FallersAdmiral Group (ADM) 858.00p -28.08%Tullow Oil (TLW) 1,358.00p -5.43%Resolution Ltd. (RSL) 260.00p -3.13%HSBC Holdings (HSBA) 522.80p -2.73%Unilever (ULVR) 2,078.00p -1.38%Kingfisher (KGF) 258.30p -1.11%SSE (SSE) 1,324.00p -0.90%ARM Holdings (ARM) 618.50p -0.88%Reckitt Benckiser Group (RB.) 3,296.00p -0.87%Standard Chartered (STAN) 1,405.00p -0.64%FTSE 250 - RisersKesa Electricals (KESA) 109.00p +7.07%Premier Foods (PFD) 4.00p +4.93%Regus (RGU) 83.40p +4.25%Drax Group (DRX) 564.50p +3.01%Ferrexpo (FXPO) 321.20p +2.88%Salamander Energy (SMDR) 214.90p +2.82%Dixons Retail (DXNS) 11.30p +2.82%Spectris (SXS) 1,301.00p +2.68%Oxford Instruments (OXIG) 835.00p +2.27%Thomas Cook Group (TCG) 46.64p +2.26%FTSE 250 - FallersCape (CIU) 355.10p -23.63%Allied Gold Mining (ALD) 158.80p -3.29%Cable & Wireless Communications (CWC) 38.38p -2.96%Talvivaara Mining Company (TALV) 219.50p -2.44%Home Retail Group (HOME) 88.15p -2.43%Homeserve (HSV) 264.00p -2.29%Phoenix Group Holdings (DI) (PHNX) 508.50p -2.12%Redrow (RDW) 109.80p -1.88%Savills (SVS) 305.10p -1.71%Supergroup (SGP) 713.50p -1.59%