LONDON (ShareCast) - Banks and housebuilders are hitting the recovery trail today as UK shares set about recouping yesterday’s losses.

HBOS leads the banking sector higher after positive comment in the Lex column of the Financial Times, while Royal Bank of Scotland advanced on further consideration of its trading update yesterday.

Housebuilders are also wanted after Barratt Developments’ statement yesterday that it was sticking with its guidance for full-year profits. Double-digit percentage gains were seen on Taylor Wimpey, Bovis, Redrow as well as Barratt in the morning session.

Oils and miners are also in favour. BP gets a lift from Lehman Brothers, which has upgraded the stock to “equal weight” from “underweight” while Vedanta Resources gets the thumbs-up from Goldman Sachs, which now rates the stock as a “buy” and has a target price of 3095p.

Carphone Warehouse saw headline pre-tax profit surge by 75% to £216m but the group’s shares are sharply lower after it said it remains cautious about the year ahead as inflationary pressures hit consumers.

Argos has started the year as expected, said owner Home Retail Group Thursday, but poor weather in March and April has hurt sales at Homebase. Sales at the firm’s catalogue chain rose 4% to £929m during the 13 weeks from 2 March to 31 May, but flat like for like sales were better than the drop of 2 or 3% analysts had feared. Fellow DIY retailer Kingfisher tumbles in sympathy.

A deterioration of the Kalgoorlie nickel smelter furnace in Western Australia has forced miner BHP Billiton to bring forward the rebuild of the furnace, originally planned for later in the next financial year. The stock moves up following an “outperform” rating from Sanford Bernstein, which has set a price target of 2,500p for the stock.

Confectioner Cadbury is another benefiting from broker comment after Exane BNP Paribas upgraded it to “neutral” from “underperform”, with a price target of 700p.

InBev’s bid for US brewing giant Anheuser-Busch has shaken up the brewing sector. If the deal goes through the merged entity would leap-frog SABMiller to become the biggest brewing company in the world.

Among second-liners Aberdeen Asset Management is wanted after Altium upgrade its rating to “hold”. Defence and support service firm VT Group advances after ABN Amro changed its view from “hold” to “buy”.

Investec has resumed coverage of computer game retailer Game Group but it is bearish on the stock. It rates the company’s shares a “sell” and has set a price target of 233p. Elsewhere in the retail sector Debenhams is unloved following a downgrade yesterday from Citigroup.

Investment firm 3i Infrastructure said it had outperformed its annual targets as it plans to raise almost £115m for new investment opportunities. The £700m fund, which is run by private equity firm 3i Group, said a strong infrastructure market helped it achieve targets.

Over 97% of shareholders have backed Imperial Tobacco’s £4.9bn one-for-two rights issue, the cigarettes giant responsible for Lambert and Butler said today.

Aerospace and defence firm Cobham said its Cobham Aviation Services joint venture has won two contracts worth £55m in total.

Estate agent Savills has sold its 50% share of wind farm site joint venture Infinergy to its JV partner, Koop Duurzame Energie, for £23m. Numis has the stock as a “buy” with a price target of 370p while Brewin Dolphin has upgraded the stock to “buy” and has set a price target of 300p.

Full year profits have fallen at stockbroker Charles Stanley, although revenue rose 8% to a new record at £105.6m and the first two months of the new financial year are going as planned. Sector peer Jarvis Securities is on the slide after it said it has terminated all talks regarding a potential offer for the group or its only trading subsidiary Jarvis Investment Management.

Expro International has agreed to buy the US oil and gas metering business of CiDRA Corporation for $60.5m in cash. The deal will form the basis for a new business that will be called Expro Meters which will develop, manufacture and sell a range of meters for the oil and gas market.

Loss-making IT services provider SciSys is on track to move back into the black this year as the problems witnessed in previous reporting periods have been largely eradicated.

FTSE 100 - Risers
HBOS (HBOS) 273.00p +5.81%
Standard Chartered (STAN) 1,604.00p +5.18%
RSA Insurance Group (RSA) 140.50p +5.01%
Royal Bank of Scotland Group (RBS) 221.75p +4.48%
Shire Ltd (SHP) 809.00p +4.39%
Lloyds TSB Group (LLOY) 346.25p +4.06%
Kazakhmys (KAZ) 1,605.00p +3.55%
Antofagasta (ANTO) 633.50p +3.43%
Xstrata (XTA) 4,165.00p +3.22%
Prudential (PRU) 627.50p +3.04%

FTSE 100 - Fallers
Carphone Warehouse Group (CPW) 209.25p -8.12%
Home Retail Group (HOME) 208.25p -6.93%
Kingfisher (KGF) 117.70p -5.23%
SABMiller (SAB) 1,205.00p -2.67%
Scottish & Southern Energy (SSE) 1,477.00p -1.99%
United Utilities (UU.) 737.50p -1.86%
WPP Group (WPP) 549.50p -1.70%
Vodafone Group (VOD) 148.10p -1.69%
BT Group (BT.A) 208.50p -1.65%
Enterprise Inns (ETI) 405.75p -1.58%

FTSE 250 - Risers
Johnston Press (JPR) 59.00p +18.00%
Taylor Wimpey (TW.) 61.25p +16.67%
Barratt Developments (BDEV) 83.00p +14.48%
Bovis Homes Group (BVS) 356.00p +12.30%
Redrow (RDW) 148.00p +10.24%
Real Estate Opportunities (REO) 86.75p +6.77%
Savills (SVS) 234.50p +6.23%
Aberdeen Asset Management (ADN) 124.75p +5.72%
Moneysupermarket.com (MONY) 123.50p +5.33%
Bradford & Bingley (BB.) 69.50p +5.30%

FTSE 250 - Fallers
Ferrexpo (FXPO) 428.25p -4.41%
Aga Rangemaster Group (AGA) 212.75p -4.27%
Collins Stewart (CLST) 73.75p -4.22%
Debenhams (DEB) 51.75p -3.72%
Game Group (GMG) 264.75p -3.38%
Dairy Crest Group (DCG) 357.00p -3.38%
Pennon Group (PNN) 619.50p -2.90%
COLT Telecom Group S.A. (COLT) 162.00p -2.85%
ARM Holdings (ARM) 94.50p -2.83%
Brown (N.) Group (BWNG) 183.00p -2.66%

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