FinanceBAM News

On Friday June 22 William MacNamara and Michael Hunter reported on Financial Times that by midday London equities were losing ground. This was for the reason of concerns of the investors over banks’ and managers’ exposure to sub-prime mortgage assets in the United States. By noon the FTSE 100 was trading 20 points lower at 6,576.0, a fall of 30%.

The financial sector was facing a worrisome situation when the Barclays share fell 0.9% to 722p. The Schroders was hardest hit losing 1.7% to ?13.29 and RBS fell 1.25 per cent to 633p.

The retail sector after a week of selling following tepid trading updates from Tesco and J Sainsbury left the sector looking undervalued. This forced the investors back into the game. by midday Tesco was leading the blue-chips, recovering 2.9 per cent to 434?p.while Wm Morrison rose 2.3 per cent to 293?p. Home Retail Group, the owner of Argos, rose 1.4 per cent to 445p and Kingfisher, the company behind the B&Q home improvement chain, was 1.2 per cent stronger at 232?p.

The investors fully supported the decision of the owner of the Financial Times’ decision not to join GE to counter New Corp’s premium bid for Dow Jones. Resulting in rise of 2.3% for the Pearson to 843?p. Unilever rose 1.5 per cent to ?15.63 on rumors that US food company Kraft was building a stake in the company, which owns the Lipton tea and Knorr soup brands. Also, Defense contractor BAE Systems rose 2.4 per cent to 443?p after a review of its planned acquisition of Armor Holdings (NYSE:AH) of the US was cleared by the US Treasury Department.

On the downside, electricity distributor National Grid fell 1.8 per cent to 719p after analysts at Goldman Sachs cut their rating on the stock to “sell” from “neutral”.

The FTSE 250 was trading 13 points lower at 11,604.0.