LONDON (AFP) - Leading shares ended the session lower as disappointing trading updates from Cadbury Schweppes and Pearson added to weakness in oil and mining heavyweights, but a turnaround on Wall Street capped losses.

At the close of trade on Monday, the FTSE 100 index was down 34.1 points at 6,126.8.

Volume though was pitiful, with 2.2 bln shares changing hands in 318,874 deals.

Vodafone was the most traded blue chip with 344 million shares in the telecommunication giant changing hands.

BP was the second most popular issue with 86.2 million shares in the energy behemoth changing hands.

By London's close, The Dow Jones Industrial Average (DJIA) was up 1 point at 12,091.30, having traded as low as 12,049.90.

Back in London, Cadbury Schweppes fell 8 pence to 529 with investors disappointed by the confectionery and soft drinks group's new financial targets -- less than a week after a downbeat trading update.

Cadbury reiterated it is targeting revenue growth of 3 to 5 percent per annum from 2007 but abandoned its 50-75 basis points margin target in favour of "growth in operating margins over time".

In response, UBS reiterated its 'neutral' stance.

Pearson also was out of favour, off 12 at 769, amid some profit-taking after an in-line trading update failed to inspire.

Pearson said it is on track to post its "highest profits ever" this year while reporting strong trading in its first nine months, in line with its expectations.

In reaction, Panmure Gordon reiterated its 'sell' advice and said headline profits came in broadly as expected but not enough to spark upgrades.

As a result, the broker said it is keeping its earnings per share (EPS) forecasts of 38.3 pence this year and 43.2 pence next year unchanged.

This leaves the stock trading on 20.4 times and 18.1 times 2006 and 2007 price earnings -- a level the broker believes is "grossly overvalued".

Other media issues were weaker in sympathy -- Reuters lost 3 to 448.25, while Reed Elsevier fell 2.50 to 597.

And broadcaster ITV was also under pressure, down 1.75 pence to 105, amid weekend press reports it is considering a takeover bid for Scottish ITV franchise holder and Virgin Radio owner, SMG.

Drugs group Shire was the top blue-chip faller, shedding 27 pence -- or 2.79 percent -- to 940 on profit-taking after Friday's well-received third quarter results.

Deutsche Bank reiterated its 'buy' stance on Shire although it cut its target to 1,272 pence from 1,330.

Elsewhere, mining stocks were also under pressure as last week's weak US third quarter 3 billion dollars in the carbon trading market. In reaction, Drax shares gained 13 to 817, and International Power was up 1 at 335.50. Drax was further boosted as Lehman reiterated its 'equal-weight' stance, although it said it continues to see the stock as the best value pure play UK generator in the sector. However, Hanson was the top performer, rallying 16.50 pence -- or 2.32 percent -- to 727.50 after Australian building materials group Rinker rejected a 12.8 billion dollar bid from Mexican cement giant Cemex as inadequate. The rejection has raised hopes the Mexican cement group may yet make a move for its UK peer. Sentiment was further boosted by a bullish note from broker ABN Amro which claimed Hanson's assets should attract a higher valuation than currently implied by the market." />GDP offset a spike in metal prices.

BHP Billiton lost 21 pence to 1,000, Xstrata fell 44 to 2,221, Vedanta eased 32 at 1,432 and Rio Tinto gave up 39 to 2,858.

Kazakhmys was the second biggest faller, down 31 pence -- or 2.55 percent -- to 1,185, further knocked by a mixed production report, with copper output rising and gold production falling in the third quarter.

Oil stocks were likewise under pressure, with crude languishing below 60 dollars a barrel -- sending BP down 10.50 at 591.50, BG off 1.50 at 704 and Royal Dutch Shell losing 4 at 1,886.

And in broker comment, Home Retail Group shares lost 9.25 at 399.25 after JP Morgan started coverage on the group with an 'underweight' recommendation and 390 pence target.

In contrast, Standard Life was up 4.25 at 287.50 after the Sunday Express reported French insurer AXA is considering making a seven billion pound takeover approach for the recently floated insurance group.

The newspaper claimed Nicolas Moreau, the new UK chief of AXA, is keen to add Standard Life's UK life assets to its business, having recently failed in a bid to take over the life assurance arm of Lloyds TSB's Scottish Widows for eight billion pounds.

Brokers were sceptical, with Merrill Lynch saying it believes the story is "very unlikely," while Cheuvreux described the report as having "below average credibility".

Friends Provident took on 2 at 194 ahead of a third quarter sales update on Tuesday.

Prudential was the second best-performing blue chip, rising 10.50 pence -- or 1.67 percent -- at 641, while Aviva was 1.50 to the good at 771.

Utility stocks also remained in demand, adding to Friday's gains as investors continued to welcome news Morgan Stanley plans to invest 3 billion dollars in the carbon trading market.

In reaction, Drax shares gained 13 to 817, and International Power was up 1 at 335.50.

Drax was further boosted as Lehman reiterated its 'equal-weight' stance, although it said it continues to see the stock as the best value pure play UK generator in the sector.

However, Hanson was the top performer, rallying 16.50 pence -- or 2.32 percent -- to 727.50 after Australian building materials group Rinker rejected a 12.8 billion dollar bid from Mexican cement giant Cemex as inadequate.

The rejection has raised hopes the Mexican cement group may yet make a move for its UK peer.

Sentiment was further boosted by a bullish note from broker ABN Amro which claimed Hanson's assets should attract a higher valuation than currently implied by the market.

  Add comment

Name:
E-Mail:
Comment:
Enter code: