Market report: Yesterday's trading

 

When the immaculately dressed government broker strutted his stuff on the trading floor of the London Stock Exchange in the 1980s before Big Bang, the gilt market was deemed to be the guvnor.

The equity market used to dance to its tune but those days have long gone. Very occasionally dealers' eyes are averted to UK government bonds and that happened yesterday following Chancellor Gordon Brown's prebudget report.

Their heads were turned when gilts lost 15 ticks after the UK Debt Management Office said it will cut gilt sales in the current year by £5.5bn to £59bn, which compares with the £64.5bn total planned in the March Budget.

The bigger-than-expected £3.8bn proceeds from the sale by British Nuclear Fuel of NLIP, its Nuclear Liabilities Investment Portfolio, and other monetary adjustments prompted the reduction.

It will be translated into a £5bn fall in planned Treasury bill sales and a £500m cut in the amount of gilt issue for the fourth quarter. A further planned £2bn issue of longdated conventional gilts will take the total issuance of 'longs' for 2006/7 to £25.25bn.

But before losses could stretch to a full point, buyers nibbled away and closing falls were kept to a modest three ticks. One fund manager said: 'Inflation is well under control, so why sell gilts?'

Brown's report left equities underwhelmed. Dealers were a lot more concerned about Wall Street's early weakness ahead of tomorrow's all-important non-farm payroll (employment) numbers. The Footsie lost a 19 point gain to trade that much lower following New York's opening, before recovering its poise to finish 3.9 points up at 6090.3.

Royal Bank of Scotland stood head and shoulders above the rest, closing 76p up at 1916p after proclaiming 2006 profits will beat analysts' expectations due to strong organic income growth and bumper corporate markets.

The Black Horse bank Lloyds TSB firmed 4p to 543½p amid revived gossip that Spanish banking giant BBVA could launch a bid before Spanish tax rules change early next year. Barclays added 9½p at 686½p and HBOS 11p at 1048p.

Major investor 3i jumped 33p to 988p as buyers responded to broker Dresdner Kleinwort's comment that the stock looked heavily oversold and now ridiculously cheap.

Talk of a pending upbeat broker's circular helped International Power buzz 11¼p higher to 360½p.

With Larry Yung stakebuilding gossip still doing the rounds, gold producer Anglo American rose 20p more to 2475p.

Hedge fund Man Group advanced 11¾p to 491¾p after director John Morrison bought 86,939 shares at 486.3p.

Aero-engine maker Rolls-Royce was friendless at 418½p, down 11¾p, amid rumours of a line of stock overhanging the market. Waste management business Biffa, demerged from Severn Trent, rose 11½p to 279¼p on maiden interim profits.

Car accessories and bicycle retailer Halfords reversed 10½p to 348¼p as venture capitalist CVC Capital sold its remaining holding of 11.6m shares at 351½p raising £41m. Broker UBS placed the stock with various institutions.

Professional punters were all over Commoditrade like a rash. More than 11m shares in the international commodities investment group changed hands and the close was 1¼p better at 31¼p.

A big overhang was soon cleared as dealers waxed lyrical about the hidden treasure trove of assets within the company. Analysts forecast current year pre-tax profits of £12m-plus, up from from £7.1m last year. Man Financial now owns 23.3m shares, or 6.2%.

Andrew Regan's Corvus Capital, which owns 21.1% of Commoditrade, firmed 1p to 13¾p on turnover of 5.7m. Care UK, the specialist health and social care provider, soared 52½p to 610p on news it has been named the preferred bidder by the Department of Health for a clinical assessment, treatment and support services project in Manchester.

Gasol improved 1¼p to 7½p after associate company Africa Gas Development formed a joint venture with Sociedad Nacional de Gas GE to develop gas projects in Equatorial Guinea. Rilwanu Lukman, one of the founders of Afgas was the longest serving Secretary General and President of OPEC and should know his onions.

Positive results left Alternative Networks 8p up at 138p. Broker KBC Peel Hunt says the dividend was 18% ahead of expectations indicating management's confidence in trading.

• Surrey-based stem cell specialist Reneuron scorched 4⅞p higher to 19¾p after revealing it is seeking US Food & Drugs Administration approval to commence clinical trials of its experimental treatment for chronic disability caused by stroke.

It is the first time the therapy will be studied in humans. Stem cells, taken from an aborted foetus, will be injected directly into the patients' brains.