MARKET REPORT: A Disappointing Week of Trading for Top Line Firms
Posted on: Monday, 7 November 2005, 12:00 CST
London's leading shares ended the week in the red yesterday as updates from heavyweight firms BSkyB and British Airways disappointed investors.
At the end of a busy week for corporate news, BSkyB lost almost five per cent of its market value after the satellite broadcaster revealed that summer price hikes had persuaded many of its customers not to renew subscriptions.
This contributed to the Footsie closing 8.3 points lower at 5423.6, eating into significant gains racked up over the last few days.
One trader said profit-taking remained a possibility in the near term, but added: "Many investors are once again eyeing the 5500 level and, assuming the Bank of England leave rates unchanged, such a move may well prove achievable."
BSkyB was the heaviest top flight faller, losing 25.5p to 501.5pIt was followed into the red by British Airways - off 7.75p at 306p - after it posted flat profits for the first six months of its financial year. Shares in BA have enjoyed a strong run recently.
Other fallers included catering group Compass - a day after it fired the boss of its UK division and two other staff over an investigation into how UN contracts were awarded. Shares weakened 3p to 200.5p, partly eroding yesterday's three per cent rise.
Tate & Lyle and International Power also fell in the wake of their updates on Thursday, losing 9.75p and 4.5p to 490p and 233.5p respectively.
In contrast, investors expressed relief at new guidance from insurer Legal & General that a Government crackdown on tax dodging would not impact on its profits. The insurer had previously warned the changes could inflict a one-off hit of up to pounds 500 million.
Shares in L&G rose 2p to 110.75p to make it one of the highest blue-chip climbers.
Concerns about the strength of its major markets in western Europe, including the UK, did not put investors off brewer Scottish & Newcastle.
Instead, they latched on to news that volumes between July and September improved throughout all regions as S&N shares advanced 5.5p to 484p.
Outside the top flight, baker Greggs dropped almost five per cent, or 230p to 4650p, after warning that recent trading had been affected by fewer shoppers venturing on to the high streets around the UK
Source: Birmingham Post; Birmingham (UK)
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