News

London's stocks finished deep in the red as miners spearheaded the slide with big losses. US markets were closed for the Martin Luther King holiday but stocks still reeled from fears about a possible US recession.

Commodity plays tumbled on worries about the US economy. Rio Tinto and BHP Billiton falls were exacerbated by waning bid talks, while Vedanta and Kazakhmys were also heavily in the red.

Xstrata, which was up earlier in the day on vague bid talk, joined its peers in negative territory.

Economic concerns also impacted financials with Old Mutual, Schroders and Royal Bank of Scotland posting big losses.

Friends Provident bucked the financial trend though. It rose after JC Flowers, the US private equity firm, made a 175p per share informal offer.

Wolseley tumbled after admitting its profit before one-offs and intangibles slumped by a third in the five months to end December. It added that market conditions are likely to worsen and it is taking more action to cut the cost base and curtail capital spend.

JP Morgan has cut its ratings and price targets on retailers Marks and Spencer and Next, saying it expects a difficult year for the UK clothes retail sector.

M&S falls to 'underweight' from 'neutral', with price target lowered to 400p from 630p. Next goes down to 'neutral' from 'overweight' with target now at 1,500p from 2,100p before.

Real estate plays were shielded from the worst of the sell-off as Bearn Stearns joined those who believe the UK property sector is set for a turnaround. It started coverage of Land Securities and British Land with 'outperform' ratings and respective price targets of 1,821p and 1,298p.

Elsewhere, Northern Rock was the best performing mid-cap after the government released new proposals. Up to £30bn of debt to the taxpayer will be paid off by issuing bonds guaranteed by the government as part of a deal to see it bought by a private buyer. If a private deal is not agreed, Rock will be taken into public ownership the statement said.

Merrill Lynch has kept its 'neutral' stance on oil and gas support services group Petrofac, citing disappointing results from the Heron-2 well in the Timor Sea, off Australia.

Sportswear group Sports Direct reported sales for the 11 weeks from 29 October to 13 January of £280m and gross profit of £126m, but warned it expects the retail trading environment in the UK to become increasingly difficult over the next six months.

Underwriter Heritage has received more bid approaches after Bermuda-based Ironshore dropped its interest last week. The Lloyd's insurer said the new discussions were at a preliminary stage. It added that Ironshore's proposal was at a level that significantly undervalued Heritage's prospects as an independent entity and so was rejected.

Human resources firm Hat Pin suffered after it warned that poor performance at The Talent Business will result in profits for the year being 25% below market expectations.

Accuma shares slipped heavily after the Personal debt firm said it terminated takeover talks with interested parties and is no longer involved in any discussions over a potential offer.

FTSE 100 - Risers
Friends Provident (FP.) 158.00p +3.61%
Taylor Wimpey (TW.) 183.70p +1.44%
Hammerson (HMSO) 1,056.00p +0.19%
Resolution (RSL) 712.00p +0.07%
Kingfisher (KGF) 129.70p -0.15%
Kelda Group (KEL) 1,079.00p -0.19%
Land Securities Group (LAND) 1,501.00p -1.05%
Admiral Group (ADM) 943.00p -1.10%
Persimmon (PSN) 759.00p -1.11%
Scottish & Newcastle (SCTN) 756.00p -1.24%

FTSE 100 - Fallers
BHP Billiton (BLT) 1,235.00p -10.38%
Rio Tinto (RIO) 4,228.00p -10.04%
Kazakhmys (KAZ) 1,041.00p -9.87%
Schroders Nv (SDRC) 837.00p -9.46%
Anglo American (AAL) 2,353.00p -9.19%
Cairn Energy (CNE) 2,299.00p -8.66%
Old Mutual (OML) 127.90p -8.45%
Schroders (SDR) 933.00p -8.44%
TUI Travel (TT.) 206.25p -8.33%
Royal Bank of Scotland Group (RBS) 342.75p -8.17%

FTSE 250 - Risers
Northern Rock (NRK) 94.25p +46.12%
New Star Asset Management Group (NSAM) 106.75p +5.43%
HMV Group (HMV) 107.50p +5.13%
Johnston Press (JPR) 242.25p +4.87%
Biffa (BIFF) 341.00p +2.79%
Benfield Group (BFD) 265.00p +1.92%
UK Coal (UKC) 389.75p +1.50%
UK Commercial Property Trust (UKCM) 70.75p +1.07%
Ultra Electronics Holdings (ULE) 1,095.00p +1.01%
Gyrus Group (GYG) 626.00p 0.00%

FTSE 250 - Fallers
Autonomy Corporation (AU.) 830.00p -13.81%
Venture Production (VPC) 601.50p -11.93%
Premier Foods (PFD) 124.25p -11.25%
Premier Oil (PMO) 1,161.00p -10.55%
Merrill Lynch World Mining Trust (MLW) 526.50p -9.85%
St James's Place (STJ) 219.00p -9.69%
JPMorgan Indian Inv Trus (JII) 401.00p -9.68%
Templeton Emerging Markets Inv Trust (TEM) 385.00p -9.41%
Telecity Group (TCY) 249.25p -9.36%
DS Smith (SMDS) 170.50p -9.31%