Tuesday lunchtime business bulletin

Sep 23 2008 By Andrew Mernin

The London market was mired in the red today as uncertainty over the US Treasury’s 700 billion US dollar (£383bn) banking rescue rattled investors.

The FTSE 100 Index was 2% lower by mid-morning - down 109.4 points to 5126.9 - after falls on US and Asian exchanges.

Doubts over the extent of the bail-out package amid talks between Congress and the US Government also saw oil prices surge after recent lows on demand fears.

Crude for November delivery was at 106 dollars after traders looked for a safe haven amid wider concerns over the impact of an expensive rescue package on the greenback.

In London, British Airways slipped more than 4% on the crude prices, off 9.25p to 209.25p. Budget carrier easyJet was 18.5p softer at 344.5p in the FTSE 250.

Miners acted as the main drag on the top-flight after metals prices receded. Eurasian Natural Resources was the leading faller, off 74p at 612.5p, as the sector littered the fallers’ board.

Sugar group Tate & Lyle’s shares were caned today after its patent battle against Chinese manufacturers was dealt a blow by a US court ruling.

The firm claims rivals have breached its manufacturing patents on its sucralose sweetener - which it sells under the Splenda brand - on imports into the US.

But a judge at the US International Trade Commission (ITC) said he did not agree with Tate & Lyle’s claims in an initial ruling.

Tate will appeal the decision at a full six-person hearing of the ITC but shares fell as much as 17% as analysts warned of other potential copycats emerging.

Numis Securities analyst Nicholas Ceron said: "If the judges do not change their mind they will send a signal to potential sucralose manufacturers that Tate manufacturing patents are not as strong as claimed."

Irn-Bru maker AG Barr said today the rainy summer weather failed to dent demand for its soft drink brands as it posted a 9.8% rise in interim profits.

The group said it was growing sales of Irn-Bru in its core Scottish market - where the drink is said to be more popular than Coca-Cola - and increasingly across the rest of the UK, with total revenues for the brand up 5.8%.

AG Barr posted pre-tax profits of £11.1m for the six months to July 26, up from £10.1m a year ago.

It also said total turnover in the second half so far was ahead of last year despite August’s wet weather, which meteorologists have said was the sixth-wettest August since records began.

But Cumbernauld-based AG Barr cautioned that the month’s rain and heightened competition had impacted the total market.

Roger White, chief executive of AG Barr, said: "The combination of poor summer weather, volatile input costs and the generally gloomy economic outlook will make the balance of the year challenging."

The pound at 10am was US$1.8514 compared to US$1.8479 at the previous close while the euro at 10am was £0.7945  compared to £0.7947 at the previous close.