Disappointing corporate news dampens FTSE rally

Hopes that the FTSE 100 Index would extend its recent rally were fading today as corporate news disappointed investors.

Broadcaster BSkyB and brickmaker Hanson were among stocks under pressure as the market pulled back from a three-year high amid a wave of profit-taking.

The Footsie lost 18.6 points to stand at 5308.9 by mid-morning even though most other major markets around the world finished trading in the black overnight.

BSkyB failed to see its shares gain ground despite reporting full-year results at the top of market expectations.

Operating profits before exceptional items rose by 34% to £805 million, better than the £794 million forecast in the City but insufficient to prevent shares reaching the top of the fallers board – off 6.5p at 544.5p.

News of a 28% rise in first-half profits at brick maker Hanson to £172.3 million could not offset disappointment at a warning of continuing weak demand in the UK housebuilding market. Hanson shares retreated 12p to 568p.

BPB – the world’s biggest plasterboard maker – weakened 10p to 698p as investors banked profits following its rejection of an improved takeover proposal from French glassmaker Saint-Gobain.

In addition to disappointment at corporate news, a clutch of blue-chip stocks began trading without the right to the latest dividend.

Stocks affected by going ex-dividend included BT Group, which was the heaviest top-flight faller after slipping 6.25p to 223.25p, and pharmaceuticals giant GlaxoSmithKline, off 7p at 1334p.

Some support was being offered to the market by Halifax owner HBOS after it posted figures showing a 15% rise in half-year profits to £2.26 billion.

Its shares improved 3p to 877p, but the rest of the sector struggled, with Royal Bank of Scotland down 11p at 1701p and Barclays off 5.5p at 559p.