News

The Footsie leaderboard is a sea of red this morning as London takes its lead from Wall Street, which turned south in the afternoon trading session yesterday.

The boost to metal prices given by China's week-end announcement of a huge financial stimulus package has fizzled out already, with the result that mining stocks are in retreat. Lonmin and Kazakhmys lead the sector lower.

Lloyds TSB is sharply lower as threats emerge to its agreed take-over of HBOS. The government has clarified that HBOS will be eligible for government assistance should the merger with Lloyds TSB not go through, which will be seen as a boost to the efforts of Scottish banking grandees Sir George Mathewson and Sir Peter Burt to engineer an independent future for the embattled mortgage lender.

Additionally, there are rumours that the Bank of China is interested in acquiring HBOS, with former HBOS chief executive Jim Spowart lined up to take over at the helm.

On the bright side, index heavyweight Vodafone underlined its financial strength with its interim results even though it trimmed its revenue forecast for this year again. Turnover in the six months to September was slightly ahead of forecasts at £19.9bn, an increase of 17.1%. Underlying profits rose by 10.3% to £7.2bn.

Tesco seems to be turning the tide of opinion on its Asian operations. Yesterday the company released disappointing like-for-like sales figures for its South Korean and Chinese businesses ahead of an organised trip to Asia for investment analysts who cover Tesco. Today, the shares are among the few to make headway. Broker Panmure Gordon has suggested that its growth estimates for Tesco's South Korean operations will need to be revised upwards, as the roll-out of hyper-markets is happening faster than envisaged. 'In all, we estimate that our sales forecast three years out is 13% too low for South Korea. This is significant, because it is a high-margin, high-return country," the broker added.

Taylor Wimpey expects no recovery in the UK housing market in the short term and said it may need to make further provisions against its land and work in progress in the absence of any improvement to current market conditions.

To add to its woes, the latest survey from the Royal Institution of Chartered Surveyors (RICS) has shown that estate agents in England and Wales had sold an average of only 10.9 properties per firm in the 12 weeks to the beginning of November, with agents in London struggling to sell one house a fortnight.

Yellow Pages publisher Yell Group has warned of "negative organic growth", lower revenue and a big drop in earnings during the third quarter. It expects an underlying fall in group revenue of around 5% at constant exchange rates due to the worsening economic environment across all its operations.

InterContinental Hotels has reported global revenue per available room (RevPAR) grew 1.6% at constant currency during the third quarter, but warned of a sharp deterioration in market conditions during October. Broker Evolution Securities believes that it is too early to buy the stock, even though the share price has almost halved in the last year. Evolution, which has a 450p price target for the stock, said: 'The time to buy is when occupancy starts to recover - which could be a year away.'

Ceramics group Cookson will miss expectations for the full year as the impact of global slowdown on the steel industry starts to take its toll. The weaker end-market conditions are expected to prevail throughout the fourth quarter and into 2009, and management has initiated appropriate and decisive actions across the group to mitigate the effects of this slowdown, Cookson added.

Irish airline Aer Lingus has upgraded its forecast for the current year slightly, but still expects to report a thumping loss this year and another operating loss in 2009.

Insurance broker Jardine Lloyd Thompson said it remains on track to deliver sustainable profitable growth in 2008, despite the current uncertainty in the financial sector. The group's trading performance in the third quarter was in line with expectations across all five lines of business.

Support services firm Babcock International posted a 30% rise in half year pre-tax profit and is wanted after declaring it is confident of further progress for the full year.

Goodfellas' pizza group Northern Foods saw currency moves and pension credit changes knock 16% off pre-tax profits in the first half. Profit before tax for the 26 weeks ended 27 September fell to £16.9m from £20.1m a year earlier despite a 6.8% increase in revenue to £468.6m. Revenue excluding the impact of currency translation and acquisitions rose 3.8%.

The volatile Imperial Energy Corporation is enjoying an 'up' day after Indian company ONGC Videsh confirmed that both of the pre-conditions of its offer for Russia-focused Imperial Energy (IEC) have been satisfied; IEC's share price shot up last Friday when the Russian authorities indicated that the bid had been approved, but then fell back sharply yesterday after ONGC said further regulatory approvals were still being awaited.