FTSE sees confidence lift

Better-than-expected results from HSBC and Pearson failed to lift confidence on the London market today following last week’s turmoil.

The FTSE 100 Index furthered last week’s 370-point loss, closing down 9.1 points at 6206.1, despite a strong performance from the mining sector, with continued concerns over the economic outlook in the US continuing to weigh on the market.

A poor opening on Wall Street also added to the negative sentiment after it too failed to rebound from the sell-off seen last week.

Dulux paint maker ICI led the Footsie risers board with a gain of more than 7% after the company said it had rejected a new approach from Dutch rival Akzo Nobel worth £7.8bn (€11.5bn).

Despite the snub, ICI’s shares were 41.5p ahead at 618.5p, after the company said it remained in discussions with Akzo and investors bet on the Dutch firm coming back with a higher offer.

Heavily-weighted mining stocks were also on the front foot today after an upgrade for Vedanta Resources from Merrill Lynch highlighted strong growth prospects. Vedanta moved 83p higher to 1701p, while Rio Tinto advanced 113p to 3451p and Antofagasta rose 28p to 702p.

Meanwhile, banking giant HSBC posted forecast-beating interim profits of almost £7bn (€10.3bn), despite an increase in its bad debt charges.

HSBC, the first of the “big five” banks to report this week, rose more than 1%, or 12p to 892.5p, on the back of the update.

Rival Barclays, meanwhile, slipped back 1p to 681p after it failed to gain a recommendation for its latest ABN Amro bid from the Dutch bank’s board.

Strong first half results boosted Financial Times-to-Penguin publisher Pearson. The stock climbed 8p to 778p after the group reported adjusted pre-tax interim profits of £54m (€80m), compared with £31m (€45.8m) a year earlier.

Drinks and confectionery firm Cadbury Schweppes fell more than 1%, or 8.5p, to 595p. Analysts expect the firm’s sales to have been knocked by the weaker US dollar when it posts interims later this week, while the company has also postponed the sale of its US drinks business due to the current weakness in credit markets.

Mobile phone giant Vodafone also struggled after investors reacted to news that US firm Verizon Wireless – in which Vodafone has a 45% stake – was spending $2.7bn (€2bn) on a rival operator. Vodafone’s shares were down 3.1p to 148.1p.

Power grid operator National Grid slid 15p to 686p even after it said the outlook for the year was ahead of previous expectations and that impact from the recent flooding would be minimal.

In the second tier, insurer Beazley saw it shares jump more than 3%, or 4.75p to 154.75p, after beating forecasts with profits of £60.2m (€89m).

The leading Footsie risers were Imperial Chemical Industries, up 41.5p to 618.5p, Vedanta Resources ahead 83p to 1701p, Antofagasta up 28p to 702p and Rio Tinto ahead 113p to 3451p.

The leading Footsie fallers were Man Group off 17p to 546p, National Grid down 15p to 686p, 3i Group off 23p to 1050p and Prudential down 14p to 650p.