LONDON (ShareCast) - London’s blue chips closed with good gains, helped by Enterprise Inns’ late rally on news that the pub owner is eligible to convert to a low tax REIT status.

Shares in Enterprise Inns soared almost 30% just before the close after the group confirmed it is eligible to convert to real estate investment trust (REIT) status if an internal restructuring of the group is undertaken.

Interest rate optimism lifted housebuilders, with Persimmon, Redrow and Barratt Developments all up.

Plumbers merchant Wolseley, meanwhile, was encouraged by yesterday’s statement from US mortgage buyer Fannie Mae that the worst of the credit market turmoil emanating from the housing market slow-down may be behind us.

Banks also got a lift from Fannie Mae’s comments, with HBOS and Lloyds TSB the picks of the sector. Standard Chartered fell though after it announced a write-off of $97m for asset-backed securities and a further $156m on assets earmarked for disposal.

British American Tobacco lifted first quarter profit by 18% to £807m on revenues up 14% to £2.54bn, boosted by the weak pound and good trading generally. "The year has clearly got off to a great start", chairman Jan Du Plessis added. Imperial Tobacco was also up.

Hotel giant InterContinental Hotels Group posted a decline in first quarter pre-tax profit but says it is well positioned for continued growth.

Directories publisher Yell Group was in demand after Idearc, the US publisher of Yellow Pages phone directories, announced better than expected results yesterday.

Defence firm BAE Systems said trading between January and May 2008 has been consistent with management expectations. It said for the whole group, a further year of good growth is anticipated for 2008.

On the downside, insurer Old Mutual, packaging company Rexam, restaurant group Whitbread and REIT Liberty International all traded lower in ex-dividend form.

Also trading ex-dividend was Antofagasta in a mining sector depressed by lower metal prices. Xstrata, BHP Billiton and Vedanta were also in retreat.

International Power was also lower after announcing plans to raise €500-€600m from a convertible bond issue to fund the acquisition of an additional 40% shareholding in Turbogas, the Maestrale wind portfolio, the Elecgas investment in Portugal. IP added its outlook is unchanged and 2008 will be another year of growth.

No-frills airline Easyjet posted higher first half losses of £48.4m (£41.4m) on revenues up 24% to £892.2m. Fuel costs rose by 24%.

Market research firm Taylor Nelson said it is still in merger talks with GfK, Germany’s largest market research company.

Carillion expects the recent acquisition of Alfred McAlpine to aid strong progress at the construction and support services group this year and deliver materially enhanced earnings in 2009.

Packaging firm Mondi said underlying profit since the year-end is ahead of the comparable period last year but added there is uncertainty over pricing and demand developments.

Bingo club operator Rank fell back as a combination of tax changes and the impact of the smoking ban knocked revenue by 8% in the first four months of 2008.

Property web site operator Rightmove was hit by a downgrade from Cazenove, which now expects the stock to perform “in line” having previously suggested it would outperform.

Savills fared better, however, as the strong performance of its Asian business has helped the estate agent offset the weakness in its European unit.

Accounting and tax advisory group Vantis tumbled as the company confirmed it is no longer in bid talks, having received an unsolicited all-share bid approach.

Branded restaurant chain outfit Restaurant Group said it is encouraged with its trading performance so far this year, with like-for-like sales up 5% for the 18 weeks to 4 May 2008.

FTSE 100 - Risers
Enterprise Inns (ETI) 510.00p +29.20%
Carphone Warehouse Group (CPW) 299.25p +6.68%
Wolseley (WOS) 572.00p +6.22%
Persimmon (PSN) 620.50p +5.44%
Home Retail Group (HOME) 268.00p +5.20%
3i Group (III) 884.50p +4.49%
Kingfisher (KGF) 140.80p +4.45%
Next (NXT) 1,228.00p +4.24%
Thomas Cook Group (TCG) 268.00p +3.98%
HBOS (HBOS) 519.50p +3.90%

FTSE 100 - Fallers
Antofagasta (ANTO) 767.50p -4.30%
Old Mutual (OML) 126.20p -3.66%
Rexam (REX) 464.00p -3.28%
Liberty International (LII) 942.50p -3.13%
International Power (IPR) 422.75p -2.70%
Tullow Oil (TLW) 920.50p -2.44%
Xstrata (XTA) 4,228.00p -1.77%
Land Securities Group (LAND) 1,516.00p -1.75%
Centrica (CNA) 293.50p -1.51%
Aviva (AV.) 643.50p -1.30%

FTSE 250 - Risers
Marston's (MARS) 234.00p +17.29%
Punch Taverns (PUB) 600.00p +11.21%
Greene King (GNK) 590.50p +10.37%
Yell Group (YELL) 189.25p +7.68%
Redrow (RDW) 289.75p +6.62%
Johnston Press (JPR) 138.50p +6.13%
Ashtead Group (AHT) 70.50p +6.02%
Barratt Developments (BDEV) 282.50p +5.61%
Misys (MSY) 174.25p +5.61%
Bovis Homes Group (BVS) 482.50p +5.35%

FTSE 250 - Fallers
Rank Group (RNK) 89.00p -5.57%
888 Holdings (888) 151.50p -4.72%
Inmarsat (ISAT) 443.75p -4.57%
Randgold Resources (RRS) 2,255.00p -4.00%
Trinity Mirror (TNI) 260.75p -3.78%
Rightmove (RMV) 397.00p -3.41%
Aricom (ORE) 79.50p -2.45%
Ferrexpo (FXPO) 367.75p -2.13%
Collins Stewart (CLST) 119.50p -2.05%
JPMorgan Indian Inv Trus (JII) 409.00p -1.92%

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