British Energy leads FTSE into red

British Energy led the London market into the red today as a warning over its output levels added to fears of a weak start to trading in New York.

Shares in nuclear power generator British Energy fell 7% as investors reacted with dismay to last night’s warning that it was to extend its record of unplanned stoppages.

The City was also caught by concerns on Wall Street about housing market data later today and ahead of the US Federal Reserve’s monthly decision on interest rates tomorrow – sending the FTSE 100 Index down 40.3 points to 4849.9 by lunchtime.

British Energy shares topped the Footsie fallers board after it last night said delays in returning units to service at Hunterston B in Ayrshire and Hinkley Point B in Somerset were likely to contribute to its current woes.

Shares were down 42p at 593p while fellow power station operator Drax was caught in the sell-off as it sank 28p to 859.5p, or 3%.

Miners were hit by gloom despite copper miner Kazakhmys posting a 166% rise in first half pre-tax profits of 955.9 million US dollars (£508.4m).

Kazakhmys lost hold of an early gain to stand 48p lower at 1218p and it was followed down by blue chip rivals Xstrata, which dipped 60p to 2145p, and Lonmin, which eased 53p to 2615p.

GlaxoSmithKline was also on the slide after Bear Stearns cut its rating of the pharmaceutical giant. Shares in Glaxo fell 31p to 1438p as the broker trimmed its profits forecast for its diabetes medication Avandia.

BP was one of the few stocks in positive territory, even though brokers cut their forecasts because of the safety delays at the oil giant’s Thunder Horse platform reported yesterday. Production at the key field in the Gulf of Mexico is unlikely to start until mid-2008.

Amid concerns over the potential blow to output, oil prices were higher and caused shares in BP to rise 4p to 583p and BG Group by 4p to 654p.

Outside the top flight, shares in John Laing rose 7% after the infrastructure company said it had agreed to be taken over by fund management group Henderson.

The offer values ordinary shares at 355p, but preference shareholders will also receive 138p a share. The stock was up 22.25p at 362.5p.

CSR, which makes chips for bluetooth devises such as mobile phone headsets and earpieces, bounced back from yesterday’s profits warning with a 4% rise of 35p to 891p after Deutsche Bank said the huge sell-off in the previous session was overdone.