LONDON (ShareCast) - The Footsie made a valiant attempt to break back through the 5,800 barrier but fell just short, despite a strong performance from banks.

HBOS led the banking sector higher after positive comment in the Lex column of the Financial Times, much to the relief of the underwriters of the bank’s £4bn rights issue. The shares hoisted themselves back above the 275p rights issue price.

Royal Bank of Scotland, which recently got its own monster rights issue away, advanced on further consideration of its trading update yesterday. However, mortgage lender Alliance & Leicester failed to participate in the sector’s advance.

A rally by housebuilders ran out of steam a touch in the afternoon but strong gains were still to be seen on Taylor Wimpey, Bovis Homes, Bellway and Barratt Developments - the latter after its reiteration of full year profits guidance yesterday.

Among resource stocks, BP got a lift from Lehman Brothers, which upgraded the stock to “equal weight” from “underweight” while Vedanta Resources got the thumbs-up from Goldman Sachs, which now rates the stock as a “buy” and has a target price of 3095p.

British Energy fell back after it was confirmed that Spain’s Iberdrola has pulled out of the race for the nuclear power giant.

The major faller on the day, however, was Carphone Warehouse, despite headline pre-tax profit surging by 75% to £216m. The group’s shares weakened 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. 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.

Meanwhile suggestions in the FT’s Alphaville blog that BHP will lift its bid for rival Rio Tinto to 4 BHP shares for every 1 Rio share has the latter advancing strongly. BHP is currently offering 3.4 of its shares for every share in Rio Tinto.

Confectioner Cadbury benefited 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 was wanted after Altium upgraded its rating to “hold”. Defence and support service firm VT Group advanced 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 was 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.

Software specialist Flomerics was buoyant after it said any offer from computer aided design firm Autodesk will be satisfied solely in cash. The company continues to advise shareholders to reject the offer from Mentor Graphics.

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.

Interactive media and games group Mirada has landed a new deal with ITV to provide interactive televised bingo.

FTSE 100 - Risers
HBOS (HBOS) 283.00p +9.69%
Royal Bank of Scotland Group (RBS) 229.00p +7.89%
Enterprise Inns (ETI) 443.00p +7.46%
Standard Chartered (STAN) 1,630.00p +6.89%
Lloyds TSB Group (LLOY) 353.50p +6.24%
British Airways (BAY) 240.00p +5.38%
Xstrata (XTA) 4,232.00p +4.88%
Prudential (PRU) 638.50p +4.84%
Rexam (REX) 439.00p +4.77%
Wolseley (WOS) 486.00p +4.52%

FTSE 100 - Fallers
Carphone Warehouse Group (CPW) 202.50p -11.09%
Kingfisher (KGF) 118.90p -4.27%
Alliance & Leicester (AL.) 305.50p -4.16%
Home Retail Group (HOME) 215.00p -3.91%
Scottish & Southern Energy (SSE) 1,454.00p -3.52%
SABMiller (SAB) 1,200.00p -3.07%
Severn Trent (SVT) 1,417.00p -2.14%
United Utilities (UU.) 737.50p -1.86%
WPP Group (WPP) 549.00p -1.79%
Royal Dutch Shell 'B' (RDSB) 2,029.00p -1.46%

FTSE 250 - Risers
Taylor Wimpey (TW.) 61.00p +16.19%
Johnston Press (JPR) 58.00p +16.00%
Savills (SVS) 244.00p +10.53%
Bradford & Bingley (BB.) 72.50p +9.85%
Bovis Homes Group (BVS) 348.00p +9.78%
Aberdeen Asset Management (ADN) 128.25p +8.69%
F&C Commercial Property Trust (FCPT) 85.75p +7.52%
Yell Group (YELL) 97.00p +7.18%
UK Commercial Property Trust (UKCM) 74.50p +6.81%
Bellway (BWY) 478.25p +6.63%

FTSE 250 - Fallers
Forth Ports (FPT) 1,865.00p -5.81%
DSG International (DSGI) 46.75p -5.08%
Debenhams (DEB) 51.25p -4.65%
Randgold Resources (RRS) 1,919.00p -4.19%
COLT Telecom Group S.A. (COLT) 160.00p -4.05%
Dairy Crest Group (DCG) 355.25p -3.86%
ARM Holdings (ARM) 93.50p -3.86%
Aga Rangemaster Group (AGA) 214.00p -3.71%
Game Group (GMG) 265.25p -3.19%
HMV Group (HMV) 122.50p -2.39%

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