Market report: Monday close
Technology investors were hunkering down for heavy losses today following a profit warning from CSR.
The Cambridge-based Bluetooth chip designer has slashed second-half revenues forecasts because of 'changing purchasing patterns at a headset customer'.
That wiped more than £340m from CSR's market value as its shares tumbled 288p to 856p. Wolfson Microelectronics dropped 9p to 501p in sympathy while Arm Holdings shed ½p to 117¼p.
The FTSE 100 was up 13.2 at 5890.2, losing some of its earlier lustre as the Dow opened down 10.8 at 11,550. Markets are expected to trade cautiously ahead of Wednesday's decision on US interest rates. Investors will also keep an eye on oil prices, which have now fallen to about $63 a barrel, 20% down on August highs of almost $80.
The approaching northern-hemisphere winter, the risk of adverse geopolitical events and supply disruptions in a number of key producing countries could easily send oil prices up again, which could reverse stock-market gains.
Oil shares were on the front foot. BP, which is trying to put recent gaffes in its US operations behind it with a worldwide safety review, moved 6p higher to 579p. Shell was 10p better at 1793p and BG Group rose 10p to 650p.
Rumours of a bid for BG have resurfaced, with Shell thought a possible buyer. However, as in the past, analysts are doubtful Shell would be prepared to fork out the premium BG shares command, even though the gasfocused exploration company's portfolio is considered to be high quality.
Burren Energy raced ahead 16½p to 914½p. The oil and gas producer has turned in record profits, thanks largely to increased production and rising oil prices. In the first six months of the year, net profits soared 69% to $140m (£74m) from $82.9m a year earlier.
Burren said it is 'encouraged by the initial results' of its exploration programme, with new discoveries in Congo and Turkmenistan.
Founder and chief executive Finian O'Sullivan will now go under the title of executive president, with a remit to find new projects. His long-time lieutenant, Indian-born 46-year-old industry veteran Atul Gupta, will move up from chief operating officer to chief executive to run Burren's operations.
High oil prices continue to buoy the services sector, too. Leading the FTSE 250, Petrofac, 27¼p better at 314¾p, said net profit was up 67% in the first six months of 2006 to $52.6m from $31.5m a year earlier.
'Market conditions continue to be strong and we believe are likely to remain so as the relative underinvestmentin the oil and gas industry in recent years is addressed through longterm programmes of capital expenditure by our clients,' the firm said.
Pearson was 5p lower at 743p after Lehman Brothers cut its rating in the shares to underweight from equalweight, arguing that the media group's good operational performance is already factored into the share price. Lehman has a 745p target.
Ricardo, which provides technology, engineering solutions and consultancy services to the automotive industry, said pre-tax profits rose to £14.5m in the year to the end of June from £8.6m 12 months earlier. Although activity in the US and in Ricardo's strategic consulting division at the start of the current year is below last year, the firm predicted 'further progress' and the shares rose 2¾p to 397¾p.
Wogen, which trades in off-exchange specialty metals, dropped 13p to 77½p after warning that second-half results will be below forecasts. Hollywood film producer Seven Arts Pictures was up 24½p at 34½p after saying revenues had more than quadrupled to just over £9m in the year to end-March.
Biocare Solutions, which makes plant-based household cleaning products, launched on AIM at a placing price of 20p a share, raising £6.25m. The company says there is growing interest in its products as governments, the retail trade and the public become greener. The shares were quickly trading at 22p.
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