Market Report: Shares catch a chill from sick US mortgage duo

The health – or lack of it – of the American banking system provided an ominous backdrop to trading in London, as worries grew that there could be more bad news from the troubled US financial sector.

With the mortgage fin-ance giants Fannie Mae and Freddie Mac both in the sick ward and possibly needing a government bail-out, it was hardly helpful for former IMF chief economist Kenneth Rogoff to warn of a "whopper"-sized US bank collapse in the next few months.

So it was only a question of how far the FTSE 100 would sink before Wall Street opened to add to the misery. With all the big UK banks under the cosh, the FTSE 100 limped to the end of a miserable session 129.8 points lower at 5,320.4. The FTSE 250 dropped 256.4 to 8,867.6. Wall Street was 120 points in the red as London ended.

HBOS was the worst hit among bankers, down 22p at 277.5p and one rung off the bottom of the FTSE 100. Keeping it company was Royal Bank of Scotland, 13.5p lower at 215p, and Barclays, 18.5p easier at 324.2p. Plumbing and building suppliers giant Wolseley, with huge exposure to the crippled US housing market, had nowhere to hide and ended down 36p at 389.5p, nearly 60 per cent below its level a year ago.

The replacement hips and knees group Smith & Nephew jogged 13.5p higher to 632p on talk that its American rival Zimmer is limbering up for a full bid. S&N is worth £5.4bn. This is not the first time the orthopaedics pair have been linked and once again the reasoning is sound. S&N has just turned in solid results for the second quarter, while the strength of the dollar would make it more attractive for an American buyer. S&N has risen 8 per cent in the last month.

Signet, the world's big-gest jewellery chain, which trades as H Samuel and Ernest Jones in the UK, is packing its bags and moving to the United States, where it operates as Kay Jewelers. The primary listing for the shares will move from London to New York next month, with its tax base moving to Bermuda. The market greeted news that shareholders had approved the switch by marking the shares down 3p at 59p. However, broker Investec says the shares will benefit from the move because the US rates retailers like Signet higher than in the UK.

Broker JP Morgan thinks the outlook for BSkyB could be difficult as advertising revenues come under increasing pressure. As well as reducing its estimate of earnings per share by 10 per cent for the next two years, it has also cut its target price for the shares by 80p to 480p, sending them 23.25p lower to 439.5p. With more advertising migrating from print to the internet, shares of publishers Trinity fell 10p to 100p and Johnston Press 5.5p to 54p.

Wellstream, the oil services group, gained 70p at 1,110p after winning a contract worth £600m over four years to supply offshore piping and other equipment for oil giant Petroleo Brasileiro. However, one broker thought the contract should have been worth more but still expects the shares to reach 1,425p.

Aggreko, one of the world leaders in the supply of temporary power and temperature control systems, extended its grip on the oil and gas market with the acquisition of Canadian outfit Power Plus Rentals for £19.5m. Broker Dresdner Kleinwort welcomed the deal, which looks good value, and forecast a price for Aggreko of 690p compared with a market price of 660p, down 7.5p on the session.

Enfis held firm at 85p despite increased first-half losses but remains on course to develop a range of energy-efficient lighting systems which should see it break into profit next year, according to broker Edison. The firm, which floated on AIM in March last year, plans to build up a global distribution network. Edison is forecasting sales rising from £1.5m this year to £6m in 2009.

Investors were quick off the mark to pocket profits at the outsourcing group Mears, where the shares have raced ahead 23 per cent in the last month in anticipation of good results. Mears did not disappoint, with half-time profits up 25 per cent to £8.7m and £430m of new orders. The shares retreated 22.5p to 297p but broker Arbuthnot is tipping them to hit 400p.

Creightons, the micro-sized toiletries and fragrances group, lost 25 per cent of its value after warning that its financial position had deteriorated since March. Costs are rising and suppliers are hitting it with increased prices. The shares closed at 1.5p.

Minmet, the tiny AIM-listed oil and gas exploration company, jumped 1.5p to 5.25p after a bid approach. It seems most likely the approach is from Mitre Oil and Gas, which owns nearly 20 per cent having picked up former shareholder Kevin Anderson's stake in July.

News
i100
News
Netherlands' goalkeeper Tim Krul fails to make a save from Costa Rica's midfielder Celso Borges during a penalty shoot-out in the quarter-final between Netherlands and Costa Rica during the 2014 FIFA World Cup
newsGoalkeepers suffer from 'gambler’s fallacy' during shoot-outs
News
people
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmReview: A week late, Secret Cinema arrives as interactive screening goes Back to the Future
PROMOTED VIDEO
Travel
travel
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
News
Two giraffes pictured on Garsfontein Road, Centurion, South Africa.
i100
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Regulatory Reporting-MI-Bank-Cardiff-£300/day

£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices