Market Report: US profit warning fallout hits Aggreko

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The Independent Online

Woe on Wall Street was causing sorrow in the Square Mile yesterday. In the wake of a number of profit warnings from the US, where the latest results season has just begun, Aggreko was one of the stocks to be hit on the read-across.

The temporary power supplier – which is tasked with providing emergency energy for the Olympics – was knocked back following a profits warning from a major supplier. Cummins, an Indiana-based maker of engines, slashed its sales expectations late on Tuesday and blamed a drop in demand, including for its power-generation equipment.

The announcement prompted punters in Aggreko to pull out, leaving the company 89p weaker at 1,993p.

With Cummins also announcing that demand from the truck industry for its products had dipped, Johnson Matthey – which makes catalytic converters for vehicles – was another left weaker by the update, dropping 64p to 2,103p.

In addition, the speciality chemical company was hurt by UBS's Thomas Gilbert downgrading his rating to "neutral" in the wake of the stock's recent strong run.

Despite the bad news from across the Atlantic, the FTSE 100 still managed to recover after spending much of the trading session in the red to creep up ever so slightly, closing a mere 0.41 points higher at 5,664.48.

While the fall-out of the Libor scandal has seen Barclays' and Royal Bank of Scotland's share prices dive, Lloyds has so far been relatively unmoved.

Yesterday, however, Liberum Capital's Cormac Leech warned investors they were "too sanguine regarding Lloyds' potential exposure", and argued that the idea the bank was protected because its interest rate derivative trading book was smaller than those of Barclays and RBS was "mistaken".

Saying his forecasts assumed an impact of £1.5bn for Lloyds, he changed his "buy" rating to "sell", while also warning about the impact of a worsening economic climate in the UK and the eurozone. The bank ended up sliding back 0.29p to 30.45p, while Barclays and RBS dipped 2.35p to 164.65p and 0.3p to 207.9p.

Despite analysts at JP Morgan Cazenove warning that Arm Holdings was one of a number of stocks in the semi-conductor sector "at risk of lowering guidance", the chip designer still managed to tick up 7.5p to 488p, having shed nearly eight per cent over the past three sessions.

Meanwhile, GlaxoSmithKline ticked up 11p to 1,465p following the news that a new AIDs drug it is developing together with Japan's Shionogi had performed better in a study than the current best-seller.

At the other end of the benchmark index, Polymetal International slumped 43p to 834p after being told by Russia's supreme arbitration court to stump up $27m (£17.3m) in taxes and fees over the pricing of silver contracts.

Even though Merchant Securities' Roger Phillips was claiming that the software group could become a "potential target" if the growth plans of its chief executive, Guy Berruyer, fails, Sage finished the day unmoved at 282.7p.

The scribe added that he "would not be surprised ultimately to see a resumption of interest in Micro Focus", but the mid-tier company slipped back 4p to 542p after UBS removed its "buy" recommendation following an analyst and investor day.

The real shocker was Britvic which plummeted 40.1p to 260.1p following its admission that the recall of its Fruit Shoot drinks will now end up costing it as much as £25m.

Having seen its share price dive earlier in the week thanks to further fears over the political situation in Egypt, Centamin rose 0.7p to 69.1p on the news that chief executive Josef El-Raghy had taken advantage of the stock's fall. The gold digger's boss snapped up half a million shares at 69.62p-a-pop, costing him almost £350,000.

Another company being helped by director buying was San Leon. The Aim-listed energy explorer spurted up 0.33p to 9.94p after announcing that its exploration director, John Buggenhagen, had spent almost £50,000 on shares.

Elsewhere among the drillers, Gulf Keystone Petroleum was pegged back 2.25p to 206.75p despite HSBC changing its opinion on the punters' favourite to "overweight".