London open: Poor start for Footsie

Date: Monday 07 Jun 2010

Footsie has made a poor start though there are signs of a rally trying to break out with, for once, BP leading the risers.

The European bank sector is the main concern after Hungary, which was bailed out in 2008 by the EU and IMF, warned on Friday it could be in trouble again.

Reports George Osborne, the UK chancellor, is to press ahead with plans for a levy on UK-based banks, even though the rest of the finance ministers at the G20 summit dropped the plan have not helped. Royal Bank of Scotland, Lloyds and Barclays are all lower.

The Gulf of Mexico oil spill has now cost BP a staggering $1.25bn (£865m) and is expected to keep rising for many months to come. The latest attempt to stop the leak is only capturing half the oil, but that is a lot more more than last week.

Life insurer Prudential moved to nip in the bud any rebellions at its AGM today by revealing strong trading figures for April and May. Sales for the first five months of 2010 rose 27% to £1.37bn, with Asia and the US the main drivers.

Oil engineering services provider Lamprell said performance has been in line with expectations since its last statement in April. “We continue to see high levels of enquiries for our services in most sectors of our business but, most importantly, our efforts to diversify the scope of our operating markets is beginning to bear fruit, as evidenced by the contracts wins we have secured, so far, in 2010,” said the group.

Electrical components maker e2v technologies saw sales fall 14% for the year, reflecting the anticipated reduction in demand. Sales for the year dropped to £201.2m from £233.2m before. Adjusted operating profit slipped 45% to £15m. But pre-tax losses narrowed 66% to £9.7m from £28.4m previously due to lower exceptional costs.