Companies impress FTSE with updates

Abbey National and Friends Provident took starring roles on the London market today after both impressed with half-year updates.

But the tussle was not enough to secure progress for the wider market as the benchmark FTSE 100 Index lost earlier gains to stand 0.1 points lower by lunchtime at 4136.9.

Analysts said upcoming economic data in the US had caused the Footsie to weaken from a gain of 22 points in the first hour of trading.

At one stage, Abbey National shares stood 10% higher after reporting solid progress in its three-year restructuring programme.

There was also encouragement from better-than-expected trading profits at the company’s financial services arm, although Abbey still posted an overall loss of £144 million because of continued problems in corporate lending.

Abbey shares stood 38.75p higher at 528p – an 8% rise which was almost matched by life insurer Friends Provident.

The former mutual rose 7% or 8.5p to 135.5p as it stuck by its dividend policy and reported record new life and pensions business for the first half of its financial year.

A clutch of financial stocks benefited from the improved mood in the sector, with Royal & Sun Alliance up 0.25p at 151.5p and Norwich Union owner Aviva ahead 6.25p to 491p.

Prudential, which announced its first dividend cut since 1914 yesterday, bucked the trend, falling 4p to 416p.

Among the banks, Barclays edged a penny higher to 465.5p while HSBC added 1p to 756p. On the downside, Royal Bank of Scotland lost out falling by 8p to 1744p.

Consumer products group Unilever failed to excite the market with half-year results after posting a fall in profits. Shares dipped 5p to 508.5p.

Ahead of its first half results tomorrow, engine maker Rolls-Royce edged 1.5p higher to 149p as investors predicted a rise in interim earnings.

Chemicals giant ICI also benefited ahead of its own figures tomorrow, gaining 3p to 139.5p.

Outside the top flight, construction firms benefited from a positive update from George Wimpey and details from the British government of a multi-billion pound housebuilding project in the south-east of England.

Wimpey offered cheer by announcing a 42% rise in interim profits and forecasting that full-year profits were likely to be at the top end of market expectations.

Shares in the group rose 11p to 335p – a gain of 3% – while Taylor Woodrow led the FTSE 250 Index, adding 10.5p to 214p, Wilson Connolly lifted 4p to 186.5p and Barratt Developments gained 23.25p to 481.25p.