London close: Oils and miners depress equities

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Date: Tuesday 08 Jul 2008

  • Market Movers
  • techMARK 1,380.65 -0.16%
  • FTSE 100 5,440.50 -1.31%
  • FTSE 250 8,480.10 -1.66%

LONDON (ShareCast) - After an opening which saw losses across the board on Footsie London shares recovered well, with a substantial part of the benchmark index’s decline caused by the weakness of mining and oil stocks.

A slide in metal prices saw Ferrexpo, ENRC, Vedanta, Antofagasta, Rio Tinto and BHP Billiton beat a retreat, while Lonmin fell despite Deutsche Bank raising its rating on the stock to “buy” from “hold”. The German bank says shares in the platinum miner are now 27% off its 3,485p target price.

Oil prices slipping below $140 a barrel had Cairn Energy and Tullow Oil on the back foot – the latter ahead of a trading update tomorrow, but heavy fuel users British Airways, Carnival and easyJet welcomed the development.

Bargain hunters have moved into M&S after the trading update last week that sent its share price tumbling, with some observers attributing the stock’s rally to the closing of short positions. Vague bid talk also encouraged the buyers, though previous bidder Philip Green denied he had bought any shares.

"I haven't bought any shares, and I don't own any shares in any retailer," Green told reporters. M&S's AGM is tomorrow with chief executive Stuart Rose facing a widespread revolt over the move to make himself executive chairman.

Primark owner Associated British Foods and DSG International were also higher as retailers come back into favour again. Drugs giants GlaxoSmithKline and AstraZeneca also advanced as investors sought cover in defensive stocks.

Among financial blue-chips London Stock Exchange was the worst performer, ahead of a trading update tomorrow. Meanwhile, among second liners, the bears really got their teeth into crisis-torn mortgage lender Bradford & Bingley as the shares fell way below the 55p rights issue price.

House builder Persimmon rallied to finish up on the day after saying it does not expect to announce any significant write down of its land values with its next interim results. It has cut 1,100 jobs to save £20m per year. First half sales were £1bn, a reduction of 34% on the first half of last year.

In broker action, Investec has lowered its rating on Cadbury to ‘sell’ from ‘hold’ on valuation grounds and lowered its target price on the chocolate manufacturer to 550p from 600p.

JP Morgan has raised its price target on Arriva by 100p to 905p and kept its ‘overweight’ rating on the bus and rail operator, pointing to its strong exposure to bus operations.

Moneysupermarket.com lost almost a third of its value today following confirmation that secured loans provider First Plus will stop accepting new business from 9 August. The decision will force the price comparison web-site to source additional capacity elsewhere, review costs and loans advertising spend. It said the direct impact on 2008 revenues is expected to be around £7m and a reduction of up to £5m in earnings before interest, tax, depreciation and amortisation.

Estate agent Savills slumped after revealing trading conditions for its UK and US Commercial Capital Markets businesses and its UK Residential and Mortgage Broking businesses have continued to deteriorate with volumes down significantly on the comparable period in 2007.

IT services group Morse's chief executive has departed after sales and margins disappointed in the year just ended.

Online gamer PartyGaming says gross revenues have fallen since April due to seasonality and competition from Euro 2008. Casino performed strongly, offset by a weaker than expected performance in poker and sports betting. Overall revenues were slightly lower than expected.

A profits warning also depressed windows group Heywood Williams, with full year profit expected to come in significantly below market expectations.

Drug developer SkyePharma lost almost a third of its value as investors grow impatient at the firm's failure to make progress with plans to renegotiate or refinance its convertible bonds.

Oil explorer Premier Oil said Monte Cristo-1 well in SC43 licence in the Philippines has been plugged and abounded after no hydrocarbons were found.

Ithaca Energy’s rejection of Endeavour International’s cash and shares bid worth around £190m has forced the North Sea focused oil group to withdraw its offer for the firm.

CCTV security firm Vigilant Technology is recommending an offer from Internet networking products group BATM worth around £845,000 in cash, or £1.04m in BATM shares.

Car component maker TT Electronics was stuck in reverse after it confirmed it is to shut down its plant in Cardiff and lay off 157 employees.


FTSE 100 - Risers
Marks & Spencer Group (MKS) 231.50p +6.68%
British Airways (BAY) 217.25p +5.46%
GlaxoSmithKline (GSK) 1,216.00p +3.01%
Kingfisher (KGF) 101.10p +2.85%
Carnival (CCL) 1,614.00p +2.67%
Reckitt Benckiser Group (RB.) 2,629.00p +2.38%
Centrica (CNA) 311.75p +2.30%
Hammerson (HMSO) 893.50p +2.29%
Associated British Foods (ABF) 757.00p +2.09%
Tesco (TSCO) 368.90p +2.08%

FTSE 100 - Fallers
London Stock Exchange Group (LSE) 671.00p -7.06%
Ferrexpo (FXPO) 326.25p -6.92%
Eurasian Natural Resources (ENRC) 1,030.00p -6.79%
Cairn Energy (CNE) 2,796.00p -6.36%
BHP Billiton (BLT) 1,657.00p -6.12%
Antofagasta (ANTO) 574.00p -5.82%
Rio Tinto (RIO) 5,264.00p -5.66%
Vedanta Resources (VED) 1,916.00p -5.24%
Tullow Oil (TLW) 873.00p -5.11%
Enterprise Inns (ETI) 345.50p -4.95%

FTSE 250 - Risers
easyJet (EZJ) 272.75p +7.28%
DSG International (DSGI) 36.25p +4.32%
PV Crystalox Solar (PVCS) 174.00p +3.88%
Carpetright (CPR) 585.50p +3.81%
Inchcape (INCH) 298.50p +3.74%
888 Holdings (888) 141.50p +3.66%
Persimmon (PSN) 235.75p +3.40%
Kesa Electricals (KESA) 137.00p +3.40%
De La Rue (DLAR) 914.50p +2.64%
Home Retail Group (HOME) 203.75p +2.26%

FTSE 250 - Fallers
Moneysupermarket.com (MONY) 59.50p -32.19%
Bradford & Bingley (BB.) 34.00p -19.05%
Alliance & Leicester (AL.) 214.75p -13.58%
Trinity Mirror (TNI) 73.50p -12.50%
Savills (SVS) 193.00p -10.34%
PartyGaming (PRTY) 223.50p -9.97%
Hardy Oil & Gas (HDY) 645.00p -9.79%
Hargreaves Lansdown (HL.) 132.25p -7.84%
Premier Oil (PMO) 1,472.00p -7.25%
Mapeley (MAY) 975.00p -7.14%

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