London midday: Rally lacks legs

Leading shares have given up most of their gains after a bright start, though banks, properties and miners remain buoyant. Defensive stocks such as utilities and tobaccos remain out of favour, however.

Banks are ahead, led by Lloyds and Royal Bank of Scotland, while
Barclays is also wanted after the bank's chief executive John Varley told the House of Commons Treasury Committee that he thought the worst of the banking crisis in over.

'The meteorite passed without striking, thank goodness, and I think that the system today, although it's not in rude good health, as a result of intervention by government and central banks, the system survived,' Varley told a committee of MPs.

The mining sector's advance is spearheaded by Xstrata after its upbeat comments and talk of a possible deal with main shareholder Glencore. Elsewhere in the sector Antofagasta and Rio Tinto also advance.

British Land has boosted the property sector after it reported a 'strong' valuation growth across all types of its properties in the last three months of 2009. NAV rose 18% to 438p. Land Securities and Hammerson are up in sympathy.

Drugs company AstraZeneca perked up after the US Food and Drug Administration approved the wider use of Astra's cholesterol-lowering drug Crestor as a preventive measure against heart attacks and strokes.

Travel operator TUI is still confident of meeting expectations for 2010 despite first quarter losses almost double the deficit in 2009. Losses before tax rose to £166m in the three months ended 31 December, up from £89m a year ago, on revenue down 8% to £2.53bn. Underlying operating losses tripled to £107m from £35m.

BSkyB has sold a 10.4% stake in struggling broadcaster ITV for £196m following a two year legal battle to hang onto the shares. It placed 404m shares at 48.5p each, but had bought the stake at 135p a share, crystallising a thumping loss.

Water company Pennon said its financial performance since 1 October has been in line with management expectations. South West Water remains on target to meet the K4 regulatory contract, while Viridor is performing well and remains confident of delivering continued full year growth in profits.

Online gaming group 888 has beaten fourth quarter revenue estimates after business picked up late on in the period. The company reported revenue of $67.9m for the three months ended 31 December as an 8% increase in the first five weeks of the period turned into a 12% quarter-on-quarter gain.

Homeserve's executive chairman Brian Whitty is stepping down after 14 years at the company just as the home maintenance specialist predicts 'another year of strong growth'.

Chip maker Wolfson picked up even though it said fourth quarter losses widened after it lost business with Apple and as customers generally scaled back their orders. The Edinburgh based firm said fourth quarter pre-tax losses widened to £5.8m from £0.5m the same quarter a year before.

Online property agent Rightmove reports trading in January 2010 saw a substantial increase in average spend per advertiser.

Support services group Spice announced that chief executive Simon Rigby is to step down to pursue other business interests. "He has informed the board that he feels the group has achieved a size and position where it is appropriate for a new style of chief executive to take over the leadership," said Spice in a company statement.

FTSE 100 - Risers
British Land Co (BLND) 451.80p +3.13%
Xstrata (XTA) 1,014.00p +3.07%
British Airways (BAY) 204.50p +2.76%
Rio Tinto (RIO) 3,150.00p +2.76%
Land Securities Group (LAND) 639.00p +2.73%

FTSE 100 - Fallers
Resolution (RSL) 75.45p -2.01%
Scottish & Southern Energy (SSE) 1,142.00p -1.97%
Vodafone Group (VOD) 136.85p -1.72%
Serco Group (SRP) 494.00p -1.69%
Wolseley (WOS) 1,333.00p -1.41%