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Date: Tuesday 01 Jul 2008

  • Market Movers
  • FTSE 100 5,481.80 -2.56%
  • techMARK 1,349.72 -1.68%
  • FTSE 250 8,882.50 -2.88%

LONDON (ShareCast) - A few more Footsie constituents are showing blue but the prevailing colour remains deep red ahead of the US open. Futures showing a weak start for the Dow suggest little respite when Wall St does get underway.

Vodafone, the mobile phone colossus which had been trading higher on the back of an upgrade to “outperform” from “underperform” by Exane BNP Paribas is now in the red.

Rising oil prices and yesterday afternoon’s slide on Wall Street contribute to the state of nervousness.

Oil services groups Petrofac and John Wood Group are relatively immune from the carnage, helped by the strength of the oil price and, in the latter’s case, by JP Morgan upgrading its rating on the stock to ‘neutral’ from ‘underweight’, with the price target to raised 510p from 390p

Struggling housebuilder Barratt Developments is another stock showing only limited losses as the Telegraph reported it is close to securing a rescue refinancing with lenders that will relax its banking covenants and help it ride out the property downturn. It made strong early gains though has given some of these back

Elsewhere in the building sector, contractor Morgan Sindall slumps after warning that the prolonged slow down in the commercial property and open market housing sectors will have an impact on its expectations for 2009, though it remains on track to meet its expectations for 2008. Sindall has experienced increasingly challenging market conditions over the last quarter.

In broker action, Next falls back after HSBC lowered its target price on the fashion chain to 1,100p from 1,280p while pharmaceuticals company Shire slides after MF Global cut its rating on the stock to “sell” from “buy”, citing concerns about the revenues from Shire’s Vyvanse drug.

Recruitment agency Hays suffers after being downgraded to “sell” from “neutral” by UBS.

UBS has begun coverage on UK bookmakers William Hill and Ladbrokes with respective ‘buy’ and ‘sell’ ratings.The broker has a 300p price target on William Hill and a 310p price target on Ladbrokes.

Manitowoc, the American industrials group, last night emerged as victor in a long-running takeover tussle for Enodis, the UK food equipment maker, beating its US rival, Illinois Tool Works.

Music, films and games retailer HMV is ahead of schedule in its recovery programme after a strong set of full-year results. Profit before tax and exceptional items from continuing operations grew 25.2% to £56.6m in the year to 26 April 2008 from £45.2m the year before. Total sales growth from continuing operations was 11.3%, with like-for-like sales up 7.3%. Concerns remain, however, about the business model and the increasing threat from music download sites, and the shares fall back.

Mail order group N Brown increased revenues by 12.3% in the 17 weeks ended 28 June 2008, a slight rise from the rate up until April. Sales were particularly strong during the sunny spell in May, which coincided with the mailing of summer catalogues. The growth in sales continues to be broadly based across various customer and product groups, it added.

Carpetright's profits fell from £67m to £59.5m last year with the carpet retailer adding it was more challenging than anticipated with the deteriorating economic environment, a decline in consumer confidence and a reduction in housing transactions having adverse impacts on revenue. "We remain cautious about the short-term prospects," it added.

Van hire company Northgate profits for the 12 months to next April will be flat due to weaker conditions in the used vehicle market. Profit before tax for the year to April rose 5% to £79.5m (2007 - £75.4m).

Electric power group Tanfield crashed on a warning trading is at a significantly lower level than previously forecast with a "marked slowing" in its markets throughout June. As a result it will not meet the market's expectations for the year.

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