News

London's top stocks are continuing to trade lower with no support expected from Wall Street, which is due to start lower.

Global concerns about inflation and further rate rises in the US have weighed heavily today, while tumbling commodity prices added to the unease.

The mining sector tumbled for a second day, as gold futures fell below $600 an ounce for the first time since April. Kazakhmys was once again leading the declines while Anglo American, BHP Billiton and Xstrata followed.

Royal Bank of Scotland's trading update failed to inspire much confidence as it said first-half results would be in line with analysts' expectations after good income growth, with a strong performance by its corporate markets unit, particularly global banking and markets.

Merrill Lynch said the update was pretty much in line with expectations as it stuck with its "buy" advice and lifted its price target to 2,328p. The broker said RBoS still looks undervalued compared with its peers.

Smaller rival Alliance & Leicester, which itself provided an update yesterday, slumped as investors chose to sell out of the banks.

Barclays Capital, the investment division of Barclays Bank, admitted that it was working on a possible bid for housebuilder McCarthy & Stone.

The Competition Commission's provisional finding in its investigation into classified directory advertising says a lack of competition means Yell can set prices to advertisers above competitive levels. Yell said it is disappointed with the findings.

Meanwhile UBS upgraded shares in brewer SABMiller to "buy" from "neutral" arguing that shares in the Coors beer owner have fallen too far in recent weeks.

Plumbing merchant Wolseley was out of favour after Deutsche Bank slashed its price target to 1,530p from 1,771p.

United Utilities has apparently hired investment bank Merrill Lynch to advise it after receiving several bid approaches for its business outsourcing division Vertex.

Morgan Stanley said it was staying cautious on utilities, but increased its price target on Drax to 765p from 660p, and stuck with its "equal-weight" recommendation while British Energy's target rose to 535p from 465p and remained "underweight".

Group 4 Securicor says trading for the four months to April is going well and in line with overall expectations though the German cash services market continues to be very difficult. Overall organic growth was around 8%, compared with around 6% for the same period last year.

Tour operator First Choice first half loss increased to £34.4m from £32.9m a year ago, though under new IFRS accounting standards the loss widened to £78.2m from £66.7m. The dividend goes up and First Choice says it remains confident of meeting full-year expectations following strong high season demand.

IT and communications services firm Glen Group increased interim pre-tax losses but said steps had been laid in the first half for the business to expand.

Beleaguered bedside phone firm Patientline slumped after it said it was struggling to stir up demand for its products, citing the intense negative publicity over the last year and a change of policy in hospitals.

Mobile ringtone firm MonsterMob also slumped after the group announced that it had ousted chief executive and founder Martin Higginson as it made another profit warning.