FTSE close: Lloyds, BP up; Next, Kingfisher down

 

17.00 (close)

Trading Board, Stock Market

Lloyds Banking Group and BP defied wider market falls today as investors cheered good news from the blue-chip duo.

The bank posted forecast-beating first-half profits of £1.6bn, while oil giant BP has finally plugged its catastrophic Gulf of Mexico spill.

The pair both made gains in a see-saw session for the FTSE 100 Index, which eventually closed 10.3 points lower at 5386.2.

Markets started on the back foot after weak factory orders and housing figures in the US dampened the mood, although stronger than expected growth among US service sector firms in July helped Wall Street's Dow Jones Industrial Average make gains.

After a strong run for the pound against the dollar, the greenback fought back as sterling eased to 1.58. The pound held above 1.20 against the euro.

Lloyds was the London market's top riser, with shares up 2.6p to 74.5p, on news of the bank's turnaround from losses of £4bn a year earlier.

BP meanwhile added 6p to 421.65p after it said its operation to cut the flow of oil by pumping mud into the Gulf well had been a success. The US government says most of the oil from the leak has now been dispersed.

But fashion chain Next was the leading casualty with shares down almost 8% after it warned that its prices may have to rise by as much as 8% next year.

In addition to a hike in costs, including the price of cotton, it warned that consumer spending will be more restrained in the second half of its financial year. High street like-for-like sales dropped 1.5% in the 26 weeks to July 31 and could fall by as much as 4.5% over the second half.

Shares were down 170p to 2029p, while the uncertain retail picture also dented Marks & Spencer as its shares slipped 10.4p to 350.2p. Argos owner Home Retail Group dropped 9.3p to 235.2p and B&Q owner firm Kingfisher fell 7.5p to 216.3p.

Meanwhile, banks endured a mixed session despite the positive news from Lloyds. Asian-facing Standard Chartered was down 98.5p to 1804p after it reported a weaker than expected half-year performance in consumer banking.

In the FTSE 250 Index, shares in Premier Foods survived the company's warning that rising wheat prices were likely to restrict second half profits at its Hovis bread division.

The company also posted a wider half-year loss but shares rose 1.7p to 19.7p as investors welcomed signs of progress in controlling costs.

Elsewhere, shares in Carpetright dropped 26p to 740p after it reported a 3.4% drop in like-for-like sales in the UK and said it did not expect trading conditions to improve over the remainder of the financial year.

The biggest Footsie risers were Lloyds up 2.6p to 74.5p, Randgold up 160p to 5715p, African Barrick Gold up 15.5p to 558.5p and Fresnillo up 28p to 1098p.

The biggest Footsie fallers were Next down 170p to 2029p, Standard Chartered off 98.5p to 1804p, Home Retail Group down 9.3p to 235.2p, and Kingfisher off 7.5p to 216.3p.

12.15

The FTSE 100 index has slumped 60.6 points to 5,335.8.

Markets were dragged lower as yesterday's weak factory orders and housing figures in the US triggered a fall for the dollar. Commodity stocks bore the brunt in London with Antofagasta among those under pressure after a drop of 29p to 1008p.

The Dow Jones Industrial Average is expected to open on the back foot today after finishing lower yesterday.

Investors were also worried by signs that rising input prices will further depress consumer confidence going into 2011. Fashion chain Next saw its shares drop 8% after it warned that its prices may have to rise by as much as 8% next year.

In addition to a hike in costs, including the price of cotton, it warned that consumer spending will be more restrained in the second half of its financial year. High street like-for-like sales dropped 1.5% in the 26 weeks to July 31 and could fall by as much as 4.5% over the second half.

Shares were down 172p to 2027p, while the uncertain retail picture also dented Marks & Spencer as its shares slipped 11.4p to 349.2p. Argos owner Home Retail Group dropped 7.5p to 237p and B&Q owner firm Kingfisher fell 5.5p to 218.3p.

In the FTSE 250 index, shares in Premier Foods survived the company's warning that rising wheat prices were likely to restrict second half profits at its Hovis bread division.

The company also posted a wider half-year loss but shares rose 1.3p to 19.3p as investors welcomed signs of progress in controlling costs.

Elsewhere, shares in Carpetright dropped 12.5p to 753.5p after it reported a 3.4% drop in like-for-like sales in the UK and said it did not expect trading conditions to improve over the remainder of the financial year.

09.30

A stronger-than-expected recovery from Lloyds Banking Group today could not prevent wider market falls.

Heavy losses in retail and energy stocks saw the FTSE 100 index fall 61.7 points to 5,334.8.

'Investors are still concerned about a slowdown in the United States and the potential for further storms created by fiscal tightening but that is being partly offset by some decent results from the corporates,' said Henk Potts, equity strategist at Barclays Wealth.

News that Lloyds made £1.6bn in first half profits against losses of £4bn a year earlier saw the group lift 2%. Lloyds rose 1.3p to 73.2p, further boosted by an upgrade from Shore Capital.

But Royal Bank of Scotland shares were slightly off ahead of its results on Friday. RBS, which is expected to reveal a return to profitability in the half year, lost 0.2p to 51.85p as Spain's Santander sealed the purchase of over 300 UK branches from the part state-backed lender for about £1.65bn.

Standard Chartered shares fell 95p to 1,807.5p despite reporting first-half results that beat expectations.

StanChart racked up a record half-year profit of $3.12bn as bad debts more than halved, but Seymour Pierce questioned how much of this is reflected in the shares premium rating, given their 20% bounce in the last month.

BP shares fell 4.9p to 410.75p as it pumped heavy drilling mud into its blown-out Gulf of Mexico well in a 'static kill' operation it hopes will help permanently plug the world's worst accidental marine oil spill.

There was also hope that a ban on deepwater oil drilling could be lifted 'significantly' ahead of the current November deadline, a top official at the US Interior Department said.

Meanwhile, British Land shed 15.3p to 454.2p as it reported slowing growth in first quarter net asset value, amid fresh worry for the economy and fears that banks could choke a property market revival with tough lending restrictions.