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Date: Wednesday 20 Aug 2008

  • Market Movers
  • techMARK 1,405.71 -0.65%
  • FTSE 100 5,381.30 +1.14%
  • FTSE 250 8,890.90 +0.26%

LONDON (ShareCast) - UK shares rallied Wednesday thanks to big gains from mining giants and oil majors as commodity prices head higher.

Tullow Oil is strong after UBS upgraded the oil explorer and producer to ‘buy’ from ‘neutral’ following a heavy fall in the company’s share price. Oil services group John Wood also posts meaty gains.

Miners Rio Tinto, BHP Billiton, Kazakhmys, Vedanta Resources, Xstrata and Antofagasta follow metals prices higher.

Fallers include BT and Scottish and Southern, both of which went ex-dividend today.

Sainsbury’s falls after JP Morgan lowered its rating on the supermarket to ‘neutral’ from ‘overweight’, saying food sales are likely to suffer as shoppers tighten their belts.

Elsewhere, European newspaper publisher Mecom is under pressure after it posted a £19.7m loss (£24.6m loss) in the first half of 2008 after hefty one-off costs and write-offs. On a like-for-like basis operating profits were down by 3% to £64m on flat revenues of £770m. Newspaper advertising sales slipped 2% and it expects a similar second half performance.

Credit Suisse has started coverage on the hotelier and coffee shop chain owner Whitbread with an ‘outperform’ rating and a 1,420p target price.

Years of intense restructuring have made the Premier Inns and Costa Coffee owner the UK’s leading budget hotel operator with scope to expand overseas, the broker noted.

Shares in IMSG almost halved after the marketing services group said results for the first half will be below market expectations, primarily due to a significant deterioration at its Turkish advertising agency RPM Radar.

Printing group Xaar posted slightly higher interim profits but warned that lower sales in China could impact second half profitability. The group said it is not immune from the current international economic issues affecting the global printing market.

Building contractor Tolent's first half profit fell to £1.1m (2007: £1.53m) in tough trading conditions and after a £750,000 bad debt. Revenue rose to £85m (£76m) but the first half saw a slowing of inquiries and conversion of these inquiries into firm orders. The interim dividend is reduced to 4p from 5p.

Northwest Biotherapeutics has less than six weeks to raise extra cash to keep the day to day business in tact despite just agreeing a $1m loan from Toucan Partners.

Zambezi Resources has reported significant drill results from its 100% owned Kangaluwi copper project following first systematic drilling at the Chisawa prospect. It said reverse circulation (RC) drilling returned substantial mineralised widths and grades from surface including 14m at 1.52% copper, 12m at 1.36% copper, and 10m at 1.23% copper.

Shares in Vision Media rallied after the outdoor media contractor said it has signed contracts or heads of agreement with shopping mall owners that will more than double the size of its UK network and increase sales by £7m per year.

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