British Energy news holds Footsie back

Shares in London struggled through a lacklustre session today as heavy losses by British Energy weighed on the market.

Shares in London struggled through a lacklustre session today as heavy losses by British Energy weighed on the market.

British Energy slipped 5% after investors were left disappointed by news that output levels had fallen short of expectations even though profits were up.

And although the rest of the London market recovered from some early pressure with the help of a strong start on Wall Street, it still closed the day 1.3 points lower at 5896.6.

Banking stocks were among those trading lower, while the impact of a number of stocks going ex-dividend was also felt by investors.

Geoff Langham, head of trading at CMC Markets, said it was “another tough day” in London.

“A raft of blue chips trading ex-div and some lacklustre corporate news left stocks under pressure throughout the morning session, whilst another jump in UK unemployment also failed to offer equities any support,” he said.

“However, further tame inflation data from the US added to consensus that the Fed may now leave rates unchanged for a little longer, boosting stocks on Wall Street and giving London the incentive to move higher towards the close.”

Shares in British Energy topped the blue-chip fallers board with losses of 33.5p to 718p, as it warned it was likely to miss its annual output target because of continued problems with plant reliability.

British Energy was followed down by BT which lost 7.25p to 233.5p after it went ex-dividend, meaning investors lost the right to the most recent payout. Barclays and Royal Bank of Scotland were also hurt by a similar factor with losses of 6.5p to 649.5p and 17p to 1755p respectively.

But miners recovered after yesterday’s losses amid signs the pause in interest rate hikes in the US may last a little longer.

Vedanta led the Footsie leaderboard lifting 73p to 1341p, closely pursued by BHP Billiton, which ticked 38p higher to 1027p.

Plumbing and builders merchants Wolseley was in positive territory – up 22p to 1108p – following yesterday’s acquisition news across Europe and North America.

In the FTSE 250 Index, attention turned to engineering group Carillion after it emerged that its rail arm had been suspended from bidding for any new business until its workforce safety performance improved. Shares initially fell 3%, but were later on the up – by 2.5p to 307.25p.

Fellow engineering company Balfour Beatty was up 10.75p to 363p, as investors welcomed strong half-year results, including a 15% rise in half-year profits and a record £8.8 billion order book.

Meanwhile, Carphone Warehouse cheered 5.75p to 269.5p amid continuing takeover speculation involving a possible leverage buy-out attempt.

But Premier Foods, which completes its takeover of Campbell’s Soap in the UK and Ireland today, found itself down 8p to 242.5p.

The day’s biggest blue chip risers were Vedanta up 73p to 1341p, PartyGaming up 4.75p to 108.75p, BHP Billiton 38p higher at 1027p, and Rio Tinto, which gained 100p to 2795p.

The heaviest fallers were British Energy off 33.5p to 718p, BT down 7.25p to 233.5p, Alliance Boots 17p lower at 773.5p, and International Power down 5.75p to 314p.

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