FTSE 100 index down 0.4%; Smith & Nephew shares up
British shares fell on Wednesday, with oil producers weighing as crude-oil futures slipped back below $48 a barrel and as investors continued to fret about the health of the global economy.
The U.K. FTSE 100 index (UK:UKX: news , chart , profile ) declined 0.4%, or 16.67 points, to 3,913.57. Other European shares were broadly lower, as were U.S. stock futures. See Europe Markets.
Stock investors sold aggressively on Tuesday as investors braced for the start of an earnings season expected to at least test the market's strength for weeks to come.
Signs about the health of corporate earnings weren't that positive, after Alcoa reported that it lost $497 million on the first quarter of 2009 as aluminum prices plunged in the face of a steep drop in demand. Read more on Alcoa.
Oil futures lost $1.28 to $47.95 a barrel and copper futures were also weak.
Oil majors fell, with BP shares down 1.9% and Royal Dutch Shell shares down 1.4%.
Metal-sector firms trading lower in London on Wednesday included Anglo American down 1.7%, and Xstrata down 2.8%.
Smith & Nephew shares climb
Still, there were a few bright spots, with shares of medical-device-maker Smith & Nephew (UK:SN: news , chart , profile ) up 7.2%.
Deutsche Bank analysts noted that reconstructive sales from privately-owned U.S. firm Biomet grew 10% in the three months to February.
"We expect shares in Smith Nephew to react positively," the broker said. "We consider that investor expectations for Smith & Nephew are extremely low and the current share price is discounting at least a 37% earnings downgrade versus other defensive health care names and cyclical medtech names that we believe is unjustified," they added.
Also, shares of engine maker Rolls-Royce (UK:RR: news , chart , profile ) advanced 1.7%.
The firm announced an order worth up to $900 million to provide engines for Saudi Arabian Airlines aircraft. The contract will include a long-term service agreement.
Outside the top index, shares of UK Coal (UK:UKC: news , chart , profile ) rose 3.6% after it signed a new coal supply contract with an electricity generator customer, a deal that will have a positive financial effect this year. Talks on similar new contracts are taking place with other generators, the firm added.
Taylor Wimpey shares extend run
Shares of homebuilder Taylor Wimpey (UK:TW: news , chart , profile ) climbed 12%, extending a strong recent run for the shares.
The firm said that it has formally proposed to amend the terms of some of its bonds, extending the maturity to 2012 for a fee. The interest rate applicable to both the 2012 and 2019 bonds will be increased by 4.55% a year initially.
Shares of sportswear retailer JD Sports Fashion (UK:JDW: news , chart , profile ) climbed 3.2% after it reported that its fiscal-year sales rose 13% to 671 million pounds and pretax profit rose 9% to 38.2 million pounds.
Meanwhile, Pearl Group said Wednesday that it's in advanced discussions to raise 500 million pounds of new equity from investors, restructure its capital and seek a listing on the London Stock Exchange.
"We are in a market full of opportunities, but one in which the debt-funded acquisition model that served Pearl and others so well in the past is simply no longer appropriate," noted the firm.
