Icap warning weighs on London financials There was fresh insight into the damage caused to the financial services industry by the eurozone debt crisis as London equities markets opened on Wednesday. Shares in interdealer broker Icap reported a 2 per cent fall in interim group operating profit of £144m, as revenues fell while traders stayed out of the markets as the uncertainty rumbled on. It warned that full-year profit would be at the lower end of a forecast range between £300m and £332m. Revenue at the company, which is the largest of its kind in the world by market value, fell to £746m from £867m in the same period a year ago. Icap's chief executive, Michael Spencer, said "This has been one of the toughest periods in my 36-year career in the wholesale financial markets," adding that "volumes were lower across nearly all asset classes and geographies whether equities, futures, foreign exchange, commodities [and] fixed income." Nonetheless, the company raised its dividend to 6.6p per share from 6p per share for the same period a year ago. Gary Greenwood, analyst at Shore Capital, said: "Investors may find some comfort in the prospective dividend yield of 7.2 per cent. This is based on a full-year dividend increase of only 1 per cent, which needs to be put into context of the more aggressive 10 per cent increase in the interim dividend. However, we note that the interim dividend is mechanically based on 30 per cent of the previous year's full-year dividend, so the growth rate at the interim stage may not be a true reflection of management's expectation for the full year. Icap's shares fell 7 per cent to 287.9p, the biggest single loss on the FTSE 250 by a clear margin. The numbers made grim enough reading to unsettle shares in the sector. London Stock Exchange fell 0.7 per cent to 967½p, while Man Group, the hedge fund, lost 0.2 per cent to 80.6p. 3i was 0.5 per cent softer at 212.6p. It left investment stocks taking the biggest toll at sector level from the mid-cap index, on which much of the sector now resides. The FTSE 250 started the day flat at 11,798.97. Support once again came from housebuilders, some of the best performers of the year, after a well-received trading statement from Barratt Developments. It added to a trend for more optimistic comment on the conditions in the UK housing market, saying conditions were "stable," with trading in the London region looking "strong." It also said private forward sales in the six months to November 11 rose 21 per cent to £768.5m. Barratt's shares rose 1.2 per cent to 189p. Resource stocks led overall losses on the FTSE 100 as traders across global markets remained uneasy about the potential damage faced by global growth from stressed fiscal positions in Europe and the US. Miner ENRC made the biggest single loss, down 2 per cent at 283.8p. Financial stocks were also unnerved on London's senior index as Michael Spencer's plain speaking on the extent of the impact of financial crisis reverberated around dealing rooms. Barclays was 0.4 per cent softer at 236.3p and Royal Bank of Scotland was 0.3 per cent weaker at 276.9p.