YP75: Markets react as Obama plans to get tough with the bankers

The FTSE 100 index fell by nearly three per cent last week as global markets reacted to President Obama's plans for a dramatic overhaul of the US banking system.

The proposals include a restriction on the amount of trading banks can undertake on their own accounts and an outright ban on investing in hedge funds and private equity groups for commercial banks. The plans also seek to limit the size of financial firms so banks can no longer be considered "too big to fail".

The announcement led to a sharp sell-off across global financial stocks.

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Equities were also driven lower by fears that a surge in economic growth in China will lead to domestic interest rate rises.

The concerns drove commodity prices lower and led to a sell- off in the mining sector as investors sought to secure recent profits.

Henry Boot, a leading construction firm based in Sheffield, reported that it had traded in line with its expectations during 2009, adding that revenue will be about 115m. According to the group, Henry Boot is well placed to generate healthy returns as construction and property markets improve but held back from saying when they expect this to be. The balance sheet remains strong with banking facilities having been renewed for a further three years.

Wetherby-based Augean warned that profits for 2009 are likely to fall significantly short of the board's previous forecasts due to a continuance of the difficult trading conditions over the final quarter.

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The group highlighted the challenging economy and the adverse weather over the Christmas period which led to poor performance at the landfill division.

The pre-close trading update comes ahead of full-year results due in March where the company will hope to report improvement in trading as the economy returns to growth.

William Morrison reported a further increase in sales for the last six weeks of 2009.

The group, which enjoyed a successful 2009 by taking valuable market share from a number of its rivals, grew sales by 6.5 per cent on a like-for-like basis.

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Full-year results should remain within the board's expectations, but chairman Ian Gibson did warn that the market remains challenging.

The company has yet to appoint a new chief executive following the departure of Marc Bolland in December who left to join high street giant Marks & Spencer.

It was another week of contract wins for Cape, an energy services business.

Oil giant BP has appointed Cape for a five-year contract for maintenance support on all of its North Sea operations. The contract is worth 150m over the period.

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The news followed Monday's announcement that Cape has been awarded a

further $10m worth of contracts by Shell Philippines Exploration.

David Cadwallader,Assistant Investment Manager at Brewin Dolphin, Leeds

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