News

Attention was focused on banks for much of the day in the wake of rumours that a large bank might need central bank funding but by the close it was the weakness of mining stocks that dragged the Footsie down.

Speculation over which bank was having liquidity troubles gave way to an investigation into the source of the story and whether it amounted to market manipulation.

The Bank of England is said to be furious, while the FSA has launched an inquiry. HBOS was the subject of most of the rumours, but it vehemently denied the story. HBOS told reporters it had an "exceptionally strong balance sheet" and continued to access wholesale funding when it needed to.

Its share price tumbled early, along with Bradford & Bingley and Alliance & Leicester but all three mortgage lenders finished well above their low points.

With gold and other metals tumbling in price after yesterday's lower than expected US interest rate cut, mining stocks filled the bulk of the unwanted places at the bottom of the Footsie table. Lonmin, Vedanta and Kazakhmys were the worst affected in the sector.

Pub groups got a bashing as Lehman Brothers cut its price target on Mitchells & Butlers, the All Bar One chain, to 235p from 450p, citing concerns over the company's cash position. The US bank said the pub chain's financial position is "weak" and "could require a cash injection."

However, the pub chain responded to the report by claiming that it has borrowing facilities in place to meet all of its financial requirements. Furthermore, the group's funding position is expected to improve as it continues to generate cash at a prodigious rate. Nevertheless it closed sharply lower. Enterprise Inns, Punch Taverns and Greene King also fell in sympathy.

British Airways was another taking collateral damage as Easyjet shares tumbled on a warning that if fuel prices remain at current levels it will have to reduce its guidance on profits for the full year.

Next was also lower. It hit profit forecasts bang on in 2007, but the retail giant warned that trading conditions in the year ahead will continue to be difficult as increased costs and rising taxes put pressure on customers.

Leisure group Whitbread admitted that talks had taken place over Travelodge but said discussions have now ended.

Interdealer broker ICAP had better news. It predicted consensus-beating profit for the current year after seeing a "very strong" second half due to increased volatility in financial markets.

Engineering firm Smiths Group said strong sales in Speciality Engineering and Detection Division helped profits in the first half, adding that the first six months provide a foundation for meeting expectations for the full year.

Imperial Tobacco said adjusted profit for the year will be reduced by around £140m due to one-off accounting adjustments required under IFRS, but added it will have no effect on the underlying business performance. The group also said trading performance for the financial year remains in line with management's expectations.

Pharmaceuticals company AstraZeneca was wanted after HSBC upgraded the stock from "neutral" to "overweight".

Media buyer Aegis reported a better than expected hike in full year underlying profit today, with trading so far this year described as "healthy". Underlying pre-tax profit for the 12 months ended 31 December 2007 rose 16% at constant currency to £132.7m on revenue up 14% to £1.11bn. Organic revenue growth was 9.8%.

Component distributor Premier Farnell saw a strong finish to last year, which has carried over into 2008, sending its shares shooting higher.

Margin pressure kept annual profits flat at Kesa, with the electrical retailer warning of difficult trading conditions ahead.

A strong set of figures for 2007 and 13% increase in average daily production has prompted JKX Oil & Gas to double its dividend as it gears up to start commercial gas production in Russia.

Shares in travel firm Hogg Robinson lurched lower as it warned underlying profits this year would be 10% below market forecasts of £45m, but the dividend policy will not change.

Software firm Delcam saw profits fall for the year due to the weak dollar and warned that it will not be immune from any economic downturn.

AIM listed Sefton Resources rallied to its highest since last November as it completed the first quarter 2008 four-well drilling programme at its Tapia oil field in California.

Ringdale, the US arm of internet products specialist Network Technology, has tied-up with Toshiba's US copying arm to provide secure document printing.

Investors turned cold on shares of Polar Capital after the investment management company said lower than anticipated management fees in the final quarter of the year are likely to lead to slightly lower than expected diluted earnings per share.

FTSE 100 - Risers
Experian Group (EXPN) 381.75p +5.97%
Carnival (CCL) 1,929.00p +3.71%
Standard Chartered (STAN) 1,668.00p +3.22%
AstraZeneca (AZN) 1,842.00p +2.96%
Imperial Tobacco Group (IMT) 2,325.00p +2.69%
Lloyds TSB Group (LLOY) 427.25p +2.58%
United Utilities (UU.) 702.00p +2.48%
Barclays (BARC) 422.75p +2.42%
Reckitt Benckiser Group (RB.) 2,726.00p +1.75%
Associated British Foods (ABF) 865.50p +1.64%

FTSE 100 - Fallers
HBOS (HBOS) 446.25p -7.08%
Lonmin (LMI) 3,014.00p -6.89%
Vedanta Resources (VED) 2,010.00p -6.03%
Next (NXT) 1,108.00p -6.02%
Kazakhmys (KAZ) 1,530.00p -5.44%
BHP Billiton (BLT) 1,441.00p -4.88%
Antofagasta (ANTO) 666.50p -4.85%
Cairn Energy (CNE) 2,713.00p -4.51%
Wolseley (WOS) 483.25p -4.50%
Cable & Wireless (CW.) 138.00p -4.10%

FTSE 250 - Risers
Premier Farnell (PFL) 161.00p +13.18%
BlueBay Asset Management (BBAY) 333.00p +11.00%
Euromoney Institutional Investor (ERM) 367.75p +10.77%
Fenner (FENR) 231.25p +7.06%
Xchanging (XCH) 287.75p +5.69%
Henderson Group (HGI) 95.00p +5.56%
Electrocomponents (ECM) 169.25p +5.45%
Ashmore Group (ASHM) 258.50p +5.08%
Debenhams (DEB) 59.00p +4.89%
Signet Group (SIG) 54.50p +4.81%

FTSE 250 - Fallers
Ashtead Group (AHT) 54.25p -13.20%
DS Smith (SMDS) 146.50p -11.35%
Misys (MSY) 143.75p -10.85%
Randgold Resources (RRS) 2,345.00p -10.84%
easyJet (EZJ) 339.25p -9.53%
PartyGaming (PRTY) 19.00p -9.52%
Severfield-Rowen (SFR) 253.50p -8.15%
Galliford Try (GFRD) 53.25p -6.99%
Bradford & Bingley (BB.) 192.75p -5.86%
Northgate (NTG) 572.00p -5.45%