London pre-open: Equities held in check by US budget fears

26th Aug 2009 07:45

London seems unsure which way to turn on Wednesday morning despite a strong showing by the US market yesterday and Asian markets overnight.Enthusiasm for equities has been dampened by a White House report predicting a federal budget deficit of $9 trillion over the next decade, $2 trillion more than previously forecast. Traders indicate the FTSE 100 is expected to open around 3 points lower than last night's closing value of 4,917.Advertising titan WPP said half-year results continue to reflect the impact of the global economic contraction, which continued to intensify in the second quarter, though results for July did indicate a 'less-worse' picture. Pre-tax profit for the six months fell 47% to £179.3m, reflecting the impact of higher sterling translation of interest costs on Euro-denominated debt. Pre-tax profits plunged at Tullow in the first half of the year as the firm felt the pinch of the slide in oil prices. The oil company posted a pre-tax profit of £34.8m in the six months to June 30, down by 83% from the £126m reported the previous year. Revenues slid 23% to £291.3m from £378m. Outsourcing specialist Serco said its strong performance in the first half and the good start to the second period supports its expectation in achieving its financial guidance for 2009 and beyond. Pre-tax profit for the half-year increased 32.8% to £93.4m on revenue that rose to £1,950 from £1,491m. The strong results allowed the firm to hike dividends by 25% to 1.85p per share. Mining firm Antofagasta posted a sharp slide in pre-tax profits as metals prices slid. For the six months to June 30, pre-tax profits totalled $476.6m, compared with $1.66bn over the same period the previous year, as revenues slid to $1.18bn from $2.40bn. Lovell, the affordable housing division of constructuin and regeneration specialist Morgan Sindall, has been chosen as a contractor for a major redevelopment programme in Hampshire. The £20m project will involve the demolition of 100 bungalows built in the sixties, and the construction of 189 energy-efficient new homes.