Corporate results send FTSE into a gloom
The London market was deep in negative territory today as investors reacted poorly to the latest round of corporate results.
Despite upbeat announcements, HBOS, William Hill and Prudential were under pressure as the FTSE 100 Index weakened 29.9 points to 4970.6 by mid-morning and eroded yesterday’s gains that took it through the 5000 barrier.
One trader said the possibility of higher borrowing costs both in the UK and across the Atlantic was weighing on investors’ minds.
In London, HBOS lost more than 1% of its value, down 11p to 836p, despite delivering better-than-expected results and saying it had doubled profits since its creation from the merger of Halifax and Bank of Scotland in 2001.
Analysts cited concern over the level of bad debts at its retail arm for the share price fall. Lloyds TSB, which will post annual results on Friday, fell almost 2% or 9.25p to 486p while Barclays was 8p lower at 566.5p.
Insurer Prudential also slipped 1% in the wake of its results, but recovered as the session wore on to stand 1.5p higher at 486p. It improved annual profits by 39% and set out its expectations for a further strong rise in sales growth in the UK this year.
Other financial stocks in the doldrums included Royal & Sun Alliance, off a penny at 83.75p, and Norwich Union owner Aviva, down 2.5p at 658p.
Elsewhere, gambling group Hilton and William Hill were near the top of the Footsie fallers board after the latter said it was putting thoughts of expanding into casinos on the back burner. William Hill shares fell 19p to 596p, even though profits rose 16% and the company promised greater returns for shareholders. Hilton was 11.75p lower at 304.5p.
And investors in the company caught up in the controversy surrounding food contaminated with potentially cancer-causing dye Sudan 1 breathed a sigh of relief as it stuck by earlier comments that it did not expect to lose money over the affair. Shares in Premier Foods lifted 9.5p to 273.5p.
