FTSE close: Barclays, ABF down; Aggreko up

By Ed Monk for Thisismoney.co.uk
Updated: 13:27 EDT, 27 April 2011

17.15 close

The FTSE 100 Index closed in the red today as a raft of disappointing earnings and falls among miners dragged the market lower.

But major declines were stemmed after UK economic growth figures came in as expected, with the London market closing 1.2 points down at 6068.2.

The Dow Jones Industrial Average in America also clung to its opening mark ahead of a key Federal Reserve decision on monetary policy, due after the market close in London.

UK figures showed gross domestic product grew by 0.5% in the first quarter of 2011, but the data showed underlying growth had been flat for six months.

However, the pound was up at 1.65 US dollars and 1.12 euros as the figures matched City expectations.

Primark owner Associated British Foods was the biggest faller on the FTSE 100 after it warned profits would be impacted by sky-high commodity prices in its grocery and sugar businesses.

The caution overshadowed interim results showing a 7% rise in underlying pre-tax profits in the six months to March 5. Shares dropped nearly 6%, or 61p to 984p.

The other major casualty of the session was Barclays after the banking giant's first quarter profit of £1.66bn came in slightly below the market consensus, reflecting pressure on investment banking revenues.

The 9% drop in quarterly profits came after revenues at Barclays Capital, seen as an engine for growth at the firm, dropped 15% to £3.3bn as the group dealt with "a challenging external environment". Shares fell nearly 5% or 14.3p to 287.5p.

BP also missed forecasts after a slight drop in first quarter profits, but a stronger-than-expected performance in refining helped the embattled oil giant as its shares moved 1.8p higher at 466p. Royal Dutch Shell, which is due to post figures on Thursday, added 24p to 2317p.

Strong first-quarter growth and high inflation in China raised the likelihood of further interest rate hikes in the emerging economy.

A tightening of monetary policy would hit the country's burgeoning demand for raw materials, and consequently saw shares in mining stocks fall.

Antofagasta led declines in the sector, dropping 37p to 1359p, with silver miner Fresnillo losing 43p at 1606p and BHP Billiton off 55p to 2505p. Aggreko was the star-performer of the session after the temporary-power provider reported a strong start to the year.

The company, which recently signed a deal with Tepco, the Japanese power firm hit by the recent earthquake and tsunami, said revenues were up 9% and expects 2011 trading profit to be slightly ahead of 2010. Shares lifted 4% or 76p to 1786p.

Outside the top flight, Pinewood Shepperton shares slipped 5% or 9.5p to 203.5p after the film studios business backed a takeover offer from Peel Holdings valuing the company at 200p a share, equivalent to £96.1m.

The biggest Footsie risers were Aggreko up 76p at 1786p, International Consolidated Airlines Group ahead 9.5p at 239.1p, Resolution up 11p at 305p and Carnival ahead 66p at 2432p.

The biggest Footsie fallers were Associated British Foods down 61p at 984p, Barclays off 14.4p at 287.5p, ITV down 2.95p at 72.8p and Centrica off 11.6p at 321.4p.

16.00: Shares in Carpetright are down 16p at 704p after the retailer issued its third profit alert this year.

The firm admitted to holding down prices to shore up its competitive position. Raw material costs are continuing to rise, but it is finding it hard to pass this inflation on to customers. We have the full story here.

The FTSE 100 is 2.1 points lower at 6,067.2.

The Dow has fallen back and is 4.4 points down at 12,590.9 as US investors sit on their hands ahead of the Fed's comments on monetary policy later.

14.45:

Over on Wall Street the Dow Jones has opened higher and is 24.4 points up at 12,619.7 in early trading.

Back in London, the Footsie is 7.85 points higher at 6077.21.

13.30:

There are Q1 profits from Barclays today.

Pre-tax profit was £1.66bn in the first three months of the year - undermined by a 15% drop in revenues at Barclays Capital to £3.3bn.

Chief executive Bob Diamond called the bank's performance 'a good start in 2011 in a challenging external environment'.

The stock shed 14.5p - a hefty 9% - to trade at 287.35p. Here's more.

12.20:

At lunchtime, the FTSE 100 has fought back today despite a flurry of disappointing company updates and a lacklustre performance from the UK economy.

The London market was held back by banks and miners, but the top flight added 10 points at 6079 after economic growth figures came in as expected.

BP has missed forecasts after a slight drop in first quarter profits, but a stronger-than-expected performance in refining helped the embattled oil giant as its shares moved 7p higher at 471.3p. Royal Dutch Shell, which is due to post figures on Thursday, added 23.5p to 2316.5p.

Here's more on the BP numbers.

Strong first-quarter growth and high inflation in China raised the likelihood of further interest rate hikes in the emerging economy.

A tightening of monetary policy would hit the country's burgeoning demand for raw materials, and consequently saw shares in mining stocks fall.

Silver miner Fresnillo led declines in the sector, dropping 30p at 1619p, with Antofagasta losing 22p at 1374p and Eurasian Natural Resources off 13.5p at 920p.

Aggreko was the star-performer of the session after the temporary-power provider reported a strong start to the year.

The company, which recently signed a deal with Tepco, the Japanese power firm hit by the recent earthquake and tsunami, said revenues were up 9% and expects 2011 trading profit to be slightly ahead of 2010. Shares lifted more than 5% to 1798p.

11.20:

The Footsie has recovered ground lost earlier today, with markets taking sluggish GDP data as a sign that rates will be kept lower for longer.

GDP for Q1 came in on target at 0.5%, barely clawing back ground lost at the end of 2010. But while the figure suggested the recovery is still fragile, it also raised the liklihood that rates will be kept on hold at 0.5% when the MPC meets next week.

The FTSE 100 took heart and is now 4.68 points higher at 6074.04.

Interest rates futures markets ticked up slightly in response to the figures, with the one-year 'swap' rising from 1.23% to 1.26%. However, the trading price has fallen from 1.43% since early April, mainly due to a fall in the headline rate of inflation.

Money markets now mark October for the first rise in interest rates; in early April, they predicted June.

Here's the full story on the GDP data, and we have a full round-up of reaction from economists.

10.00:

The FTSE 100 has struggled today to make gains after lack-lustre GDP data and losses for AB Foods and Barclays following disappointing updates.

ONS figures showed growth of 0.5% in the UK during the first quarter of 2011.

That means the UK has avoided a dreaded 'double-dip' recession, but also means that the UK failed to make back the ground lost at the end of last year when GDP suffered a shock 0.5% fall.

Here's the full report.

The figures were as predicted and did little for the FTSE 100, which was already lower thanks to badly received numbers from Barclays and Associated British Foods. By 10am the Footsie was 19.6 points lower at 6049.73.

Primark owner AB Foods posted the FTSE 100's biggest decline after a 5% rise in half-year operating profits to £390m was offset by a warning that second-half margins at the high street retail chain will be lower than planned. Shares dropped 6%, or 59.75p to 985.25p.

The other major casualty of the session was Barclays after the banking giant's first quarter profit of £1.66bn came in slightly below the market consensus, reflecting pressure on investment banking revenues.

BP also missed forecasts after a slight drop in first quarter profits, but a stronger-than-expected performance in refining helped the embattled oil giant as its shares edged 3.6p higher at 467.8p. Royal Dutch Shell, which is due to post figures on Thursday, added 15.5p to 2308.5p.

Outside the top flight, Pinewood Shepperton shares slipped 2% or 4.5p to 208.5p after the film studios business backed a takeover offer from Peel Holdings valuing the company at 200p a share, equivalent to £96.1m.