The Footsie suffered a triple digit fall in the morning session, and although BP’s share price plummet is a major contributor to thee blue-chip index’s fall, plenty of other leading shares are also in the red.BP is suffering more woe as attention focuses on the future of chief executive Tony Hayward, with the US government increasingly frustrated by BP's failure to cap the leak. The cost of the clean-up has now reached $1bn, BP added in its latest update.
Reports that growth in China’s manufacturing output tailed off in May has hit metal prices and consequently mining companies such as Kazakhmys, BHP Billiton, Antofagasta, Lonmin and ENRC .
Prudential is going well even though – or maybe because - the life group’s $35.5bn bid for American International Group’s Asian business looks in disarray after the US insurer refused to renegotiate the price down to nearer $30bn.
“Following detailed discussions with AIG's management and advisers, Prudential had proposed a revision to the terms that would have reduced the value of the consideration for the acquisition of AIA by Prudential Group plc to US$30.375bn,” it said Tuesday. That will make the EGM on 7 June especially interesting as many shareholders look set to vote against the deal. It was hoped a reduced price might convince the sceptics.
Elsewhere in the financial sector banks are not reacting well to the European Central Bank’s (ECB) warning last night that there may have to be another round of provisions by European banks to cover bad loans this year. The ECB reckons there is nearly €200bn of bad loans sitting in European banks' balance sheets. Barclays is the biggest faller but Royal Bank of Scotland is also hard hit.
Responding to speculation in the week-end press, hotels and coffee shop group Whitbread has said it has no plans to raise funds through an equity issue. The Independent newspaper had run a story on Sunday which suggested that the Premier Inn and Costa Coffee owner is planning to raise Ł100m this summer through a private placement.
Drugs behemoth AstraZeneca is mulling over a Complete Response Letter (CRL) from the US Food and Drug Administration (FDA) in respect of its new drug application for Axanum.
Also in pharmaceuticals, Shire is deliberating over whether to file a patent infringement suit against Zydus Pharmaceuticals USA, which is planning to produce a generic version of Shire’s Lialda tablets.
Energy provider Scottish & Southern Energy (SSE) has decided not to splash out on acquiring a substantial stake in the electricity distribution networks currently owned by EDF Energy Networks. SSE, in partnership with Canadian pension fund Borealis, was one of four parties thought to be in the running to acquire the networks
Rail and bus operator FirstGroup today confirmed the disposal of GB Railfreight to Europorte, a wholly owed subsidiary of Eurotunnel, for Ł31m. Aberdeen based FirstGroup, which posted a 10% drop in full-year profit in May as it grappled with the recession and higher fuel costs, said the disposal was in line with its strategy.
Irish no-frills airline Ryanair swung strongly back into the black last year and proposed a €500m special dividend with the possibility of another €500m in the three years time. Pre-tax profits for the year to March came in at €341 against a loss of €181m. Adjusted profits rose by 204% to €319m allowing for write-downs on its stake in rival Aer Lingus. Revenues were 2% higher at €2.99bn against €2.94bn.Goodfellas pizza and Fox’s biscuits group Northern Foods traded “solidly” during the last full-year, but profit still fell 28% and it said challenging markets conditions are likely to persist. Profit before tax and restructuring items for the 53 weeks to 3 April fell to Ł34m from Ł47.5m in 2009 on revenue up a touch to Ł977m from Ł975.2m. Underlying profit, which excludes net pension financing, rose to Ł39.2m from Ł39m.
Baltic Oil Terminals, which owns oil product terminals Russia’s Baltic enclave of Kaliningrad, move to profit last year as it shifted its focus to higher margin activities.
Shares in oil and gas explorer Pantheon Resources fell back after drilling at a well in east Texas was deferred until July 2010 due to the well operator Vision Resources’ assessment that it will profit from a reduction in rig rates and drilling costs if it waits longer.
Valiant Petroleum was having better luck with its drilling, getting a better than expected result on its West Tybalt prospect.
FTSE 100 - Risers
Prudential (PRU) 563.50p +4.06%
Scottish & Southern Energy (SSE) 1,068.00p +1.52%
Experian Group (EXPN) 624.50p +0.97%
Johnson Matthey (JMAT) 1,546.00p +0.85%
United Utilities Group (UU.) 543.50p +0.74%
Severn Trent (SVT) 1,206.00p +0.67%
Legal & General Group (LGEN) 79.50p +0.57%
ARM Holdings (ARM) 247.60p +0.57%
Imperial Tobacco Group (IMT) 1,810.00p +0.56%
Randgold Resources (RRS) 6,020.00p +0.50%
FTSE 100 - Fallers
BP (BP.) 418.65p -15.39%
Barclays (BARC) 292.10p -4.26%
TUI Travel (TT.) 227.80p -4.16%
Kazakhmys (KAZ) 1,136.00p -4.14%
BHP Billiton (BLT) 1,845.00p -3.55%
Investec (INVP) 475.40p -3.00%
Antofagasta (ANTO) 860.50p -2.88%
Lonmin (LMI) 1,636.00p -2.85%
Eurasian Natural Resources (ENRC) 975.50p -2.84%
Old Mutual (OML) 110.80p -2.81%
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