London equity markets remained depressed in mid-afternoon on Wednesday as Wall Street opened lower on concerns over record high oil prices, and as BSkyB slumped after disappointing subscriber numbers.
The blue-chip FTSE 100 index shed 0.8 per cent to 4,396.1, while the mid-cap FTSE 250 fell 1.3 per cent to 5,947.1 at 1330 GMT.
On Wall Street, the Dow Jones Industrial Average opened down 0.3 per cent at 10,088.6, and the Nasdaq Composite fell 0.5 per cent to 1,851.0 after US crude prices reached record highs.
In London, BSkyB, the satellite broadcaster, slumped 15.7 per cent, as fourth-quarter new subscriber numbers of 81,000 were significantly lower than the 100,000 plus figure analysts were expecting and that the broadcaster needs to reach its target of 8m subscribers by the end of 2005. There was also talk that hedge funds were shorting the stock.
The low growth in subscriber numbers overshadowed the good news on profits, which climbed sharply, with full-year pre-tax profit excluding exceptionals more than doubling to £514m.
BSkyB announced a plan to increase its subscriber numbers by more than a third to 10m by 2010 and to make up to £450m of capital investments over the next four years to support this growth, while still returning cash to shareholders.
Numis Securities said it was pleased with the results and long-term targets, but disappointed by the second weak quarter of subscriber growth. The broker added that it remained supportive of the group on a medium/long term basis although expected volatility near term.
Aviva fell 3.1 per cent on profit-taking after the UK’s largest insurer announced a better-than-expected increase in interim profits and improved margins. Operating profits were £1.13bn, 37 per cent higher than in the first half of 2003.
The insurer signalled that consumer confidence was returning, but cautioned that the speed of recovery would be linked to investment market conditions and the elimination of regulatory uncertainty in the UK.
Standard Chartered was one of the few blue-chip stocks to buck the trend of the downward market, rising 0.8 per cent, as its record interim pre-tax profit beat expectations with a rise of over 50 per cent to $1.12bn. The Asia-focused bank said that it saw good growth across most of its markets and was strongly positioned in a number of vibrant and growing economies.
Sage fell 3.1 per cent after Merrill Lynch trimmed its earnings estimate for the software group as the recovery for the sector, especially in the US, was not as marked as it expected.
BT Group was 3.6 per cent lower after the stock went ex-dividend. The telecom stock paid a final dividend of 8.5p, roughly the same amount wiped off the share price.
A number of other ex-dividend stocks contributed to the fall in the blue-chip index, with global information provider Reuters, down 3.4 per cent, chemist chain Alliance Unichem, 1.9 per cent weaker, telecoms company Cable & Wireless down 2.1 per cent, and retailer Boots down 1.6 per cent.
Among mid-cap stocks, leisure and travel website Lastminute.com slid 10.8 per cent with investors nervous ahead of tomorrow’s key third quarter results, which will show trading conditions for the busiest period of its year.
Halma, the safety and environmental technology group, fell 2.7 per cent after warning that the weakness of the US dollar would have an adverse impact on first-half profits.
Egg slid a further 5.1 per cent after its dramatic fall of almost 28 per cent on Tuesday, as investors continued to dispose of the stock after Prudential decided not to sell its 79 per cent stake in the internet bank. Prudential also fell by a further 1.6 per cent.
Morgan Crucible, the engineering group, fell 3.7 per cent after its net loss widened in the first half to £48.8m, due to losses in the sale of businesses. The company said that there were indications of improvement in North American and Asian markets, though not yet in European markets. Arbuthnot cited the company’s progress in raising operating margins and maintained its “buy” recommendation.
Among small-cap stocks, Ocean Power Technologies gained 7.5 per cent after announcing a joint venture with Spain’s Iberdrola to develop a wave energy park off the North Coast of Spain.
Intec Telecoms Systems fell 6.3 per cent after saying that it bought Singl.eView for $74.5m. The deal will give Intec a market cap close to £200m and should transform it into one of the top five software stocks on the FTSE in terms of revenue. Separately, it placed 31.2m shares at 58p to raise £15m to fund the integration of Singl.eView.