Footsie in the red

Disappointing results from BSkyB and British American Tobacco drove the London markets in the red today.

Pressure on financial stocks proved a further drag while weak sentiment in early trading across the Atlantic did little to lift the mood.

The gloom saw the FTSE 100 Index wipe out nearly all of the previous session’s gains as it slumped 72.1 points to 6010.

Among the fallers was BSkyB after its latest subscriber figures could do nothing to lift the broadcaster’s shares out of the doldrums.

BSkyB’s fall of 12p to 517.5p added to a year in which the stock has been one of London’s worst performers. Its addition of 40,000 customers was in line with market hopes, but the group has yet to bring its churn rate – the number of subscribers swapping its services for those of competitors – into line with its medium-term target of 10%.

It was joined on the fallers board by British American Tobacco which traded 32p lower at 1369p after warning at the time of its first-quarter results that exchange rate gains were unlikely to continue at current levels.

David Jones, chief market analyst at CMC Markets, said: “The afternoon session saw the Footsie continue to work its way lower, heading back towards the psychological 6000 mark.

“The bearish tone was set from early on today, with disappointing numbers from BSkyB and British American Tobacco encouraging some investors to think about locking in some profits.”

Also on the slide were financial stocks, with insurer Friends Provident leading the way down 6.25p to 191.25p. It was followed lower by Norwich Union owner Aviva which was off 14p to 803p, while banks also suffered as Barclays slid 13.5p to 677p.

This reversed yesterday’s gains for the banking sector which came after Credit Suisse’s buoyant results, although Northern Rock was on the up – rising 26p to 1096p – after Deutsche Bank raised its rating.

Commodities-based stocks endured a mixed session with BG Group shares struggling despite a doubling in first quarter earnings.

Shares in BG were 18p lower at 745.5p, while oil and gas explorer Cairn Energy gave up early gains as crude prices moved within a whisker of 75 US dollars a barrel to close 15p down at 2433p.

Elsewhere, disappointment at EMI’s latest failure to pull off a £2 billion-plus takeover of Warner Music Group cast a shadow over the wider London market today.

The logic of a tie-up involving EMI and Warner Music has long been trumpeted in the City, so the company’s failure to bring Warner to the negotiating table resulted in its shares dipping 11.5p to 270.5p.

But no-frills airline easyJet lifted 5% or 15.25p to 328.25p after its first-half performance was better than expected and it predicted that its annual profits would be up to 15% higher than last year.

The day’s biggest blue chip risers were Northern Rock up 26p to 1096p, Severn Trent up 21p to 1182p, ICI with gains of 6.25p to 370p and Next 24p higher at 1670p.

The heaviest fallers were Rentokil Initial off 8p to 154p, PartyGaming down 7p to 148p, Kazakhmys 45p weaker at 1149.5p and Friends Provident down 6.25p to 191.25p