LONDON (ShareCast) - - Stocks mark time ahead of US jobs and manufacturing data
- BAE workers protect jobs by taking pay cut
- Dollar strength sapping demand for oil stocks

Investors have largely taken in stride the warning from credit ratings agency Fitch that the UK is marginally more likely to lose its AAA rating than retain it, and, helped by a moderately strong showing by mining companies, Footsie ended the morning barely changed.

Fitch Ratings has revised the outlook on the United Kingdom’s triple-A rating to "negative" from "stable". The agency explains that the change reflects the “very limited” fiscal space to absorb further adverse economic shocks in light of such elevated debt levels and a potentially weaker than currently forecast economic recovery.

Fitch notes that the UK’s structural deficit is second only to that of the US and that its debt level is “significantly above” the ‘AAA’ median, although the agency does judge the government’s fiscal consolidation plans to be “credible”.

Retailers in turmoil

Britain's leading supermarket chain, Tesco, has long been regarded as one of Britain's world-class operators but it is increasingly looking like a company in turmoil as this morning it was confirmed that Richard Brasher, the head of Tesco's UK operations, is to quit the board.

Chief Executive Officer, Philip Clarke is taking a much greater interest in the UK business since the supermarket group's recent profit warning, and no one likes working with the boss constantly looking over your shoulder.

The firm is in better shape than Home Retail Group, the owner of the Argos and Homebase brands. Indeed, some argue that Tesco is largely the cause of the problems at Argos, which is struggling to hold on to market share as Tesco Direct encroaches on its market.

Like-for-like (LFL) sales at Argos chain have taken another tumble in 2012. The group said Argos's LFL sales in the eight weeks to February 25th were down 8.5% year-on-year (YOY). The Homebase part of the business fared a little better, but still saw LFL sales down 6.5% on a YOY basis.

Another company struggling with tough economic conditions is commercial vehicle hire specialist Northgate which said that profits for the current financial year are likely to be at the lower end of market expectations. The group is seeking to address declining vehicle utilisation levels but tough economic conditions in its main markets of the UK and Spain are not helping matters.

Investment management

Strategic partners reshaping their insurance books withdrew billions of euros of funds from the care of F&C Asset Management (FCAM) in 2011. Assets under management at the year’s end were £100.1bn, down from £105.8bn at the same point in 2010. Net outflows totalled £7.2bn, so the underlying performance of the portfolio was positive, but the shares still tanked. Sector peers Schroders and Ashmore are also on the slide.

Witan Investment Trust was little changed in the morning session despite admitting that its 2011 performance substantially lagged that of its benchmark index. Net asset value per ordinary share on a debt at par value fell 11.6% from 584.4p to 516.9p, while on a fair value basis it dropped 12.9% from 578.1p to 503.7p. The shares currently trade around the 500p mark.

News from the Shire

Pharmaceuticals firm Shire has withdrawn its Biologics Licence Application for its enzyme replacement product REPLAGAL with the US Food and Drug Administration (FDA). Recent interactions with the FDA have led the Shire to believe that the agency will require additional controlled trials for approval of the product.

Power systems developer Rolls-Royce has announced another big contract win, this time to design and equip four deep-water platform supply vessels for Hyundai. The contract is worth more than £45m to Rolls-Royce and includes options for a further two of the vessels, which are designed to supply equipment and services to deep-water oil and gas platforms.

Workers at defence firm BAE Systems have agreed to take a pay cut aimed at saving 120 jobs. The firm said 2,000 staff at its Samlesbury and Warton sites would take one day of unpaid leave a month for two years in order to prevent compulsory redundancies.

FTSE 100 - Risers
Next (NXT) 2,902.00p +2.65%
Essar Energy (ESSR) 115.20p +2.49%
Vedanta Resources (VED) 1,415.00p +1.73%
Kazakhmys (KAZ) 959.00p +1.64%
Carnival (CCL) 2,052.00p +1.58%
Marks & Spencer Group (MKS) 376.60p +1.56%
Wolseley (WOS) 2,536.00p +1.52%
Rio Tinto (RIO) 3,520.50p +1.16%
Aggreko (AGK) 2,329.00p +1.09%
Standard Life (SL.) 248.60p +1.06%

FTSE 100 - Fallers
Shire Plc (SHP) 2,191.00p -1.66%
Tesco (TSCO) 320.85p -1.23%
Schroders (Non-Voting) (SDRC) 1,266.00p -1.17%
Ashmore Group (ASHM) 373.80p -1.03%
Smiths Group (SMIN) 1,078.00p -1.01%
Cairn Energy (CNE) 333.00p -0.98%
BP (BP.) 494.30p -0.95%
BG Group (BG.) 1,526.50p -0.94%
Legal & General Group (LGEN) 133.10p -0.89%
Sainsbury (J) (SBRY) 299.80p -0.89%

FTSE 250 - Risers
Logica (LOG) 100.10p +3.57%
Dixons Retail (DXNS) 15.66p +3.50%
Michael Page International (MPI) 493.20p +3.16%
Homeserve (HSV) 242.60p +2.67%
Regus (RGU) 114.80p +2.50%

FTSE 250 - Fallers
Domino Printing Sciences (DNO) 540.00p -18.61%
Redrow (RDW) 126.50p -5.24%
F&C Asset Management (FCAM) 69.35p -5.00%
Hikma Pharmaceuticals (HIK) 742.00p -4.13%
Northgate (NTG) 228.80p -3.95%
Hochschild Mining (HOC) 476.10p -3.47%
Greggs (GRG) 530.50p -3.19%
Savills (SVS) 381.30p -2.93%
Premier Farnell (PFL) 222.50p -2.75%

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