Market Report: Defence cut fears force BAE Systems to retreat - Sharewatch - Business - The Independent

Market Report: Defence cut fears force BAE Systems to retreat

With defence cuts in the UK back in focus BAE Systems was stuck at the foot of the blue-chip index last night as it dropped 14.7p to 326.8p.

The defence giant suffered the fall after the Commons Public Accounts Committee said the Ministry of Defence must stop overspending on contracts and reveal within months how it will implement the cost savings that have been previously demanded.

Meanwhile Liam Fox, the Defence Secretary, said that any "future programmes should not be included unless there is a clear budgetary line for development, procurement and deployment".

With the MoD having its funding reduced by 8 per cent over the next four years BAE said last week that its sales would drop in 2011 due to budget cuts here and in the US.

Atif Latif, director of trading at Guardian Stockbrokers, said "BAE are most heavily exposed to the defence areas that are under the greatest pressure for cutbacks". However others in the sector, did not escape falls, with Rolls-Royce and Cobham down 9.5p to 614.5p and 4p to 219.5p respectively.

During the morning Libya once again dominated as the FTSE 100 touched a low of 5.926.92 points. Yet the US, which was buoyed by impressive consumer confidence data, managed to spark a rally of sorts and the top tier index closed at 5,996.76, an overall drop of 18.04.

The wider unrest in the region knocked Thomas Cook as the travel company slipped back 3.6p to 194.4p. Panmure Gordon downgraded the group to "hold" saying that both "the geopolitical and economic backdrop will remain unfavourable and negatively impact sentiment towards the tour operators".

With Tui Travel – 2.5p lower at 243.3p – down as well, Nomura's analysts said Morocco being one of the countries to which the protests have spread is a "particular concern given its increasing prominence as a winter sun destination".

They also warned over the increased cost of fuel which was not helping International Consolidated Airlines at the start of the session. However it managed a significant recovery as oil prices fell away, finishing just 1.3p behind at 238.2p.

Many of the miners were among the risers, with African Barrick Gold 8.5p ahead at 575.5p and Rio Tinto edging up 29p to 4,340.5p. Meanwhile BHP Billiton was 38.5p higher at 2,413p after it said it is spending £2.95bn on a number of shale-gas reserves in Arkansas.

On the FTSE 250 Forth Ports put on 49p to 1,493p as chit-chat spread that it could be the subject of another takeover attempt. Last year the UK's only listed ports group fought off an approach and yesterday market gossips were getting excited over vague rumours that it could be about to receive an offer worth as much as 2,050p a pop, although details were scarce on the identity of the supposed bidder.

In a tough session for the retailers, Home Retail was driven back 2.4p to 227.6p after Nomura reduced its forecasts for the group. The broker cut its like-for-like expectations for both its Homebase and Argos businesses, with its analysts saying they expected "short-term weakness in the stock given ongoing macro weakness".

They had words of warning for its peers as well, predicting "further downside risk as retail sales weaken". The sector certainly looked less steady yesterday, with Kesa Electricals easing back 3.5p to 129.6p while Kingfisher fell 0.7p to 258.6p and Debenhams slid down 0.45p to 61.9p.

One of those bucking the trend, however, was Next which climbed 21p to 2,003p thanks to UBS upgrading its advice on the chain to "buy" and pointing out its share price "has been hitting new relative lows all year".

However the return of vague speculation that Topshop's Sir Philip Green could try to buy Marks & Spencer again did not prevent it retreating 4.4p to 350.5p.

Top spot on the second line was taken by Croda International as the chemicals group jumped 145p to 1,639p following its latest figures and bullish comments over its ability to benefit from emerging markets.

Just behind it was Lamprell which pushed forward 25p to 305p thanks to a contract win analysts said could be worth as much as $210m. The group, which upgrades and refurbishes oil and gas rigs, will put together a mobile offshore drilling platform for the Singaporean company Greatship Global Energy Services.

Following a huge surge on Monday after it agreed to Kyowa Hakko Kirin's £292m, or 130p a share, takeover, the small-cap biotech group ProStrakan made a smaller shift up of 1.5p to 133p yesterday as Singer Capital Markets said it could receive counter bids.

Meanwhile, Bglobal added 2.25p to 37.5p on the Alternative Investment Market following an agreement with Opus Energy to supply and fit smart meters for its customers.

John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
peopleThe report and photo dedicated to the actress’s decolletage has, unsurprisingly, provoked anger
Home body: Badger stays safe indoors
The programme sees four specialists creating what they believe are three perfect couples, based on scientific matchmaking. The couples will not meet until they walk down the aisle together
tvUK wedding show jilted
Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Arts and Entertainment
Robin Thicke and Pharell Williams in the video of the song, which has been accused of justifying rape
music...and he had 'almost no part' in writing it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Payroll & Accounts Assistant

£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week