LEADING shares managed to stay in positive ground yesterday despite a 15 per cent slump for sugar and sweetener firm Tate & Lyle. The FTSE 100 index closed up 9.2 points at 6,227.2.

Tate & Lyle delivered a surprise profits warning, saying that its annual profit would be modestly below current market forecasts, hit by a weak contribution from its zero-calorie super-sweetener sucralose.

Negative sector sentiment also dragged Unilever off 15p to 1,384p, Cadbury Schweppes down 4p to 554p and Associated British Food down 7p to 812p. Henk Potts, equity strategist at Barclays Stockbrokers said: “It [Tate & Lyle] came as a bit of a shock. I think the market wasn’t expecting any announcement and was clearly very disappointed. They failed to meet market expectations and they’ve been hit very hard on the back of it.”

But as base metals hit new highs and gold climbed, mining companies helped support the index. Rio Tinto added 3.3 per cent, or 85p, to 2,660p, Vedanta tacked on 2.9 per cent, or 32p, to 1,125p, BHP Billiton was up 2.4 per cent, or 22p, to 1,702p and Xstrata gained 41p to 2,333p.

US crude oil climbed to around $53 a barrel after cold weather in the United States raised demand for heating fuel, helping oil stocks to rise. London Brent crude was up $1.10 at $53.80. BP lifted 4p to 545p, and rival Royal Dutch Shell tacked on 11p to 1,718p.

Cairn Energy reversed larger gains achieved earlier in the day, closing up 19p at 1,702p after its partnership with Oil and Natural Gas Corporation resulted in it being awarded two blocks in India’s latest asset auction. Cairn also benefited from a price target increase from UBS. There were signs of resilience from the supermarkets after the Competition Commission published its thoughts at the start of its investigation into the £95 billion grocery sector.

While it is still early days in the inquiry, analysts picked up on signs that the sector could be more competitive than previously thought. And they noted a line from the Competition Commission that it would not look to punish Tesco for its commercial success.

Tesco was up 1.5p at 415.25p, while Sainsbury’s added 3.5p to 438p and Morrisons rose 0.25p to 284p.

Marks & Spencer was also up, 11.5p to 681.5p, following the announcement of plans to tackle its final-salary scheme pension deficit. It will find the extra £704 million by contributing £500m into the scheme through the release of its properties to a newly-established partnership with the pension scheme.

British Airways continued to fall, down 5.5p to 530.5p, amid the threat of strike action from cabin crew as part of a dispute over pay, staffing and sickness absence.

Europe’s biggest medical device maker, Smith & Nephew, tacked on 2.4 per cent, or 21p, to 395p to hit a one-year high, after Goldman Sachs raised its price target based on anticipated cost-cuts by the company after it failed to strike a merger deal with rival orthopaedic device maker Biomet.

Insurer Royal & Sun Alliance lifted 1.75p to 163.5p after a US court dismissed a General Motors complaint against the group. The US car maker was suing the group for about £500m, alleging that it had not been reimbursed for asbestos-related personal injury claims.

WH Smith led the second-tier risers’ board as its shares jumped almost 6 per cent, or 21p, to 395p, after it said that it was on course to meet profits expectations.
DOW JONES 12,533.80 +56.64

US STOCKS rose yesterday as a jump in crude oil prices lifted the big oil companies but weighed down the rest of the market as investors grew cautious about corporate profits.

Stocks had rallied earlier after stronger-than-expected earnings from diversified manufacturer United Technologies boosted optimism. Demand from the aerospace and commercial construction sectors contributed to United Technologies’ strong results. Its shares shot up more than 3 per cent, making them among the top positive influences on the Dow.

The Dow Jones industrial average closed up 56.64 points, or 0.45 per cent, at 12,533.80. The Standard & Poor’s 500 index was up 5.04 points, or 0.35 per cent, at 1,427.99. The Nasdaq Composite index was up 0.34 of a point at 2,431.41.

source : business.scotsman.com

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