FTSE close: Vodafone gains; Arm, IMI down

 

17.15 (close)

A dealer monitors her screens on the trading floor of IG Index in London

The FTSE 100 Index slipped backwards for its fifth day in a row after heavily weighted mining stocks were hit by fresh falls from volatile commodity prices.

London's blue chip index lost 1%, or 62.7 points, to close at 5861 as weak sentiment was compounded by ongoing concerns over the eurozone debt crisis.

The US market dropped more than 1% after factories produced fewer goods in April for the first time in 10 months and worse than expected data from the housing market.

Markets across the world were dragged downwards as progress made at a meeting of European financial leaders was overshadowed by the arrest of IMF chief Dominique Strauss-Kahn.

The pound was up against the dollar and the euro after the UK's CPI measure of inflation rose to 4.5% in April from 4% the previous month, increasing the chances of an interest rate hike. Sterling rose to 1.15 against the single currency and at 1.62 against the greenback.

In corporate news, mobile phone giant Vodafone posted a 9% rise in full-year profits to £9.5bn and surprised analysts with its bullish outlook on the back of hopes that the widespread adoption of smartphones will boost data usage. Shares were up 1.5p to 169.7p.

Oil giant BP was among the fallers after the company's failure to complete a share swap and Arctic exploration deal with Russia's Rosneft.

Analysts said that its deal with Russian state owned oil company could still be resurrected and BP said it was hopeful the parties will return to the negotiating table at some point.

The company also announced a 610m US dollar (£375m) deal to sell several assets in the UK, including the biggest onshore oil field in Western Europe, to privately-held Perenco UK. Shares were down 3.65p to 434.8p.

A shortened risers board featured a gain of 1.6p to 435.6p for Aviva after the insurance giant reported strong growth in its motor and household division.

It now has two million motorists on its books after adding 580,000 UK customers since the start of 2010, including 180,000 as a result of the roll-out of direct pricing to brokers.

Miners and energy companies lost some of their earlier gains commodity prices fell, with Brent crude down more than 1% at 109 US dollars a barrel.

But Essar Energy was still near the top of the leaders board, ahead 12.1p to 424.2p after an upbeat trading statement. Oil and gas exploration firm BG Group lost earlier gains to slip 8p to 1332p.

Outside the top flight, builders merchant Travis Perkins announced it had bought 13 stores from the administrators of Focus DIY for £8.4m and will retain all 345 staff. Its shares were down 16p to 1021p.

The biggest Footsie risers were Essar Energy up 12.4p at 424.5p, 3i ahead 7.7p at 294.1p, Vodafone up 1.5p at 169.7p, and BT ahead 0.8p at 194.8p.

The biggest Footsie fallers were IMI down 64p to 1008p, Arm Holdings off 26.5p at 555.5p, Fresnillo down 43p at 1308p, and Eurasian Natural Resources off 25p at 806.5p.

15.45: The Dow Jones is lagging 39.4 points at 12,508.9 as US investors suffer an attack of nerves about the recovery across the Atlantic.

Disappointment over housing and industrial production data was compounded by downbeat comments on the outlook from tech giant Hewlett-Packard.

H-P's quarterly results beat expectations, but the firm cut forecasts citing factors including softness in sales of consumer PCs and the impact of the Japanese tsunami.

Back in London, the FTSE is down 13.7 points at 5,910.

Brent crude is trading at just under $109 a barrel and gold was fixed this afternoon at $1,478.50 an ounce compared with $1,500.75 at the previous close.

14.45:

Here's more detail on insurer Aviva, which today reported that general insurance sales had outperformed in the first quarter, but that life sales were down.

Net written premiums in the general insurance arm were £2.7bn in the three months to March 31, up 9% on a year ago.

But in the insurer's life business, long-term savings sales were £8.8bn, down 14% compared with a year ago.

Worldwide total sales were 9% lower at £11.5bn. Here's more.

Shares in Aviva are up 1.6p at 435.6p in trading today.

Overall today the Footsie is 39.9 points lower at 5884.76.

Over on Wall Street, the Dow Jones is 57.5 points lower at 12.490.85.

13.40:

At lunchtime, the FTSE 100 is 13.39 points lower at 5910.30.

The blue-chip index has been restrained by renewed concerns about Europe's sovereign debt crisis and an earlier fall in oil prices, which caused Asian markets to finish lower.

The pound is up against the dollar after the CPI measure of inflation in the UK rose to 4.5% in April from 4% the previous month, increasing the chances of an interest rate hike. The euro has also lifted from recent lows following inflationary concerns.

Oil giant BP was also near the top of the risers board, despite the company's failure to complete a share swap and Arctic exploration deal with Russia's Rosneft.

Analysts said that its deal with Russian state owned oil company could still be resurrected and BP said it was hopeful the parties will return to the negotiating table at some point.

BP's shares were up more than 1%, or 5p to 443.4p, after it also announced a $610m (£375m) deal to sell several assets in the UK, including the biggest onshore oil field in Western Europe, to privately-held Perenco UK.

Miners and energy companies featured among the risers, with Xstrata up 29.5p to 1416p, Essar Energy ahead 15.9p to 428.1p and oil and gas exploration firm BG Group up 27.3p to 1367p.

Outside the top flight, builders merchant Travis Perkins announced it had bought 13 stores from the administrators of Focus DIY for £8.4 million and will retain all 345 staff. Its shares rose 5p to 1042p.

12.20:

We have more on Vodafone, which has seen its shares rise 3p to 171.25p following upbeat results.

The popularity of smartphones and a strong performance in emerging markets helped it to offset tough trading conditions in southern European countries like Spain and Italy.

The FTSE 100 is flat, up just 0.05 at 5,923.7.

11.15:

For interest rate-watchers, there were some interesting comments from the new MPC man Ben Broadbent when he addressed MPs at the Treasury Select Committee.

The Goldman Sachs economist said: 'There are things the MPC should worry about, particularly with regards to commodity prices. It treats these as one-off prices ... and that has been the most important single forecasting error.

'In an environment where the most important parts of the world are consuming commodities, you might do things differently.'

Hmmm, is that a hint Broadbent will follow Andrew Sentance, the man he replaces on the committee, and call for immediate rate rises?

Meanwhile, the FTSE 100 is 5.42 points higher at 5929.11.

10.00:

Here's some more detail on those inflation numbers.

The City consensus had been for the consumer prices index (CPI) to have registered a rise of 4.2% for the year to April.

The cost of living was forced higher, in part, by Budget tax increases, such as increased alcohol and tobacco duty. But a further rise in household energy prices and in petrol prices, provided much of the driving force.

Markets have managed to find some good news in the ONS figures and the FTSE 100 has clawed back losses. It is just 2.42 points lower now, at 5921.27.

09.30:

The inflation data is out and confirms the Consumer Price Index rising at a higher-than-expected 4.5%.

The question for investors today will be whether the soaring inflation will now force the Bank of England to raise rates sooner. That would be bad for shares.

At the least, it indicates the tough time UK consumers are having, and retailers may be the stocks to suffer today.

Right now, the FTSE 100 is 10.45 points lower at 5913.24.

09.25:

The FTSE 100 dipped ahead of inflation Data expected to show prices rising faster, and with heavyweight Vodafone reporting strong results.

In early trading today the Footise was 17.4 points lower at 5906.27.

Inflation data is expected to show the official Consumer Price Index measure rising by 4.2% annually, up on last month's 4.0% and well above the Bank of England's 2% target.

Mobile phone giant Vodafone posted a 9% rise in full-year profits to £9.5bn and surprised analysts with its bullish outlook on the back of hopes that the widespread adoption of smartphones will boost data usage.

Vodafone shares were 2% higher, up 3.5p to 171.7p, although the improvement failed to keep the FTSE 100 Index in positive territory. The top flight stood 9 points lower at 5914.6 as renewed concerns about Europe's sovereign debt crisis and falling oil prices caused Asian markets to finish lower.

As well as Vodafone's improvement, the risers board featured a gain of 6.5p to 440.45p for Aviva after the insurance giant reported strong growth in its motor and household division. It now has two million motorists on its books after adding 580,000 UK customers since the start of 2010, including 180,000 as a result of the roll-out of direct pricing to brokers.

BP shares were also higher, up 2.2p to 440.8p despite the company's failure to complete a share swap and Arctic exploration deal with Russia's Rosneft. BP said it was hopeful the parties will return to the negotiating table at some point.