London close: Oil price retreat spurs equities

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Date: Monday 07 Jul 2008

  • Market Movers
  • techMARK 1,382.90 +1.65%
  • FTSE 100 5,512.70 +1.85%
  • FTSE 250 8,623.00 +1.26%

LONDON (ShareCast) - Barely more than a dozen Footsie stocks fell back today as London received an afternoon boost from a strong opening on Wall Street, a smattering of broker tips and a dip in oil prices.

With crude oil for August delivery sliding almost $4 it was a good day for heavy fuel users, with bus and train group FirstGroup leading the way, followed by airline British Airways, travel company TUI Travel and cruise operator Carnival.

Mobile phone retailer Carphone Warehouse banked gains after Goldman Sachs re-initiated coverage of the mobile phone retailer with a ‘buy’ rating.

Broker coverage also boosted Amec. Citigroup lifted its rating on the oil services group to ‘buy’ from ‘hold’, saying it sees management targets as too cautious.

No-frills airline Easyjet reported its June load factor remained strong at 86.9% and passenger numbers grew 19.5% to 4.1m compared to last year.

Irish airliner Aer Lingus also released strong figures, saying the total number of passengers grew by 7.6% in June 2008 compared with the same period last year. Passengers for short haul flights rose 7.8% while long haul flights increased 6.7%.

J Sainsbury moved higher after JP Morgan lifted its rating on the supermarket to ‘overweight’ from ‘neutral’ and on Tesco to ‘neutral’ from ‘underweight’ saying that valuations in the European food retail sector are defensive for the first time in two years.

However, there was more misery for Marks and Spencer after JPM cut its price target on the clothes and food retailer to 200p from 345p and kept its ‘underweight’ rating. Boss Stuart Rose also faces a difficult week with one in four shareholders expected to abstain or vote against his election as executive chairman.

Elsewhere, JP Morgan has cut its target price on Shire to 882p from 1050p and kept its ‘neutral’ stance on the drug group after examining various profit and loss factors.

Royal Bank of Scotland retreated after it was down-rated to “under-perform”' from “in- line'' by Cazenove, which has concerns over the bank’s declining credit quality and the price it paid to acquire bits of ABN Amro.

Elsewhere in the banking sector Bradford & Bingley crumbled to a new low on fears its rights issue is still not a certainty despite the intervention by four of its largest shareholders after TPG walked away last week.

In other broker action, inter-dealer broker ICAP fell after Credut Suisse cuts its price target for the stock to 465p from 535p, while insurer Friends Provident declined after UBS withdrew its “buy” recommendation and went neutral on the stock, cutting its price target to 105p from 129p.

In mining, Lonmin revealed the extent of production losses as normal smelting operations at its Number One furnace resumes after being closed because of a small water leak. The platinum giant estimates that the impact on production and sales of the power down is the deferral of between 5,000 and 10,000 ounces of the precious metal from the 2008 financial year into the 2009 financial year.

House builders were on the back foot with reports suggesting that Persimmon will make 1,000 staff redundant tomorrow.

Volatile stock Southern Cross had an up day, after the Care home group said it currently has an average occupancy rate of 89.8%.

Inmarsat shares were moon-bound after the satellite communications business revealed it has received a very preliminary approach from US hedge fund Harbinger Capital Partners.

Elsewhere, gaming machines group Inspired Gaming is to raise £40m through an issue of 80m convertible preference shares at 50p each. The pubs division is being sold to Danoptra for a nominal consideration. Inspired reported an after tax of loss of £45.3m for the half year to 12 April including a pub division write-down of £47.6m.

Engineer Morgan Crucible's turnover rose by about 13% in the first half of its financial year. On a like for like basis, excluding acquisitions, revenue growth is expected to be c.10% (c.4% on a constant currency basis).

Courtesy car supplier Helphire reports satisfactory progress in the year to June just ended, but cautions that the UK non-fault accident management market is maturing and its caseload is growing less rapidly.

Support services firm Spice reported a 40% rise in full-year pre-tax profit and said it continues to look to the future with confidence.

Cancer drug developer Antisoma was wanted after announcing the initial findings from its phase II trial of AS1411 in relapsed and refractory AML (acute myeloid leukaemia).

FTSE 100 - Risers
FirstGroup (FGP) 536.50p +7.19%
Ferrexpo (FXPO) 350.50p +6.86%
Carphone Warehouse Group (CPW) 190.00p +6.15%
Rolls-Royce Group (RR.) 342.50p +5.22%
Invensys (ISYS) 252.75p +5.20%
BG Group (BG.) 1,250.00p +4.95%
Smiths Group (SMIN) 1,075.00p +4.67%
British Airways (BAY) 206.00p +4.57%
TUI Travel (TT.) 186.20p +4.55%
Carnival (CCL) 1,572.00p +4.45%

FTSE 100 - Fallers
Marks & Spencer Group (MKS) 217.00p -4.41%
Royal Bank of Scotland Group (RBS) 201.00p -2.55%
ITV (ITV) 41.60p -2.35%
Friends Provident (FP.) 92.30p -2.33%
Next (NXT) 856.00p -1.95%
ICAP (IAP) 461.75p -1.86%
Whitbread (WTB) 1,069.00p -1.84%
Lloyds TSB Group (LLOY) 295.50p -1.25%
Kingfisher (KGF) 98.30p -1.11%
Wolseley (WOS) 311.00p -0.64%

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