London pre-open: Early selling on the cards

25th Aug 2009 07:37

A poor afternoon session in the US and weaker Asian markets will set the tone for London this morning, with investors worried about talk of a correction following the recent rally.The FTSE 100 is expected to lose around 40 points in early deals after Wall Street gave up a big lead to finish with just a 3-point gain.Over here, housebuilder Persimmon reported a drop in first half profits, but says selling prices have stabilised in most parts of mainland UK. Pre-tax profit fell to a better than expected £9.8m during the six months ended 30 June from £36.9m last time. Legal completions slipped to 4,006 units from 5,501 a year ago.'We expect sales rates to remain resilient due to the successful destocking that has occurred in the industry combined with the continuing good levels of underlying demand for new homes in the UK,' said chairman John White.'Future volume increases and price movements will be dependent upon mortgage availability, job prospects and the health of the general economy.'Cairn Energy reported a loss after tax, but before a $55m exceptional item, of $20m for the six months to 30 June versus a $17m profit a year ago. Revenue slumped 55% to $81m, but the oil and gas group is over the moon as production is due to begin in Rajasthan this week. Output from Mangala, Bhagyam and Aishwariya is expected to be at least 175,000 boepd.Punch Taverns is confident of its longer term prospects and expectations for the full year remain unchanged, but it remains cautious over the near-term due to the lack of forward visibility on trading outlook. Weaker beer volumes and a softening in rents are still hurting trade.Car insurer Admiral announced another record half year profit despite the poor economic conditions, prompting the firm to gives its employees free shares worth £4.5m in total. Pre-tax profit for the six months rose 5% to £105.3m on turnover that increased 17% to £540.1m. Interim dividend was also hiked to 27.7p per share from 26p before.