Market Report: Online gamers tumble as Germany gets tough

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The Independent Online

Online gaming companies' recent winning streak was abruptly broken yesterday after the Austrian internet bookmaker Bwin looked to have bet on Germany and lost. The German state of Saxony, where Bwin's affiliate in the country is based, is expected to pull its bookmaking licence and ban it from accepting bets from German residents.

Saxony is holding a press conference this morning to outline proceedings against companies that offer illegal sports betting.

This latest attempt by a government to clamp down on internet gaming unsettled investors in London, where PartyGaming fell 6p to 112.25p in the steepest loss by any constituent of the FTSE 100, while 888 eased 8.25p to 156.75p

A solid start on Wall Street - where the Dow was about 50 points higher in early trade - encouraged London to recover from what had threatened to be a third day of losses.

The FTSE 100, down almost 40 points at its nadir, closed 42.4 higher at 5,860.5. With many traders on holiday, business was light. Fewer than 2.6 billion shares changed hands. Many of those companies enjoying the steepest gains did so after pushes by brokers. Goldman Sachs and UBS told clients to buy British Airways shares, which were chased 11.75p higher to 390p.

Banking analysts picked their favourites in the sector in the wake of the interim reporting season. Deutsche Bank liked Barclays (which is also the subject of reheated, but tired, rumours of US bid interest). The No 3 lender advanced 11p to 644p.

Merrill Lynch, Citigroup and Lehman Brothers were among those to back Standard Chartered, up 29p at 1,303p as the emerging markets specialist confirmed its $413m (£216m) acquisition of 81 per cent of Pakistan's Union Bank.

JP Morgan set a target price of 330p on International Power shares, which added 7.75p to 306.25p.

The brewer Scottish & Newcastle, 11p higher at 530p, and the Anglo-Dutch publisher Reed Elsevier, up 11p at 545p, were among a smattering of other companies to climb on broker recommendations.

Meanwhile, the South African financial services group Old Mutual rose 2.5p to 158p before interim results this morning.

The Anglo-American fund manager Amvescap revealed that assets under management stood at $422.2bn at the end of July, up from $413.8bn a month earlier. That spurred the shares 7p to 507.25p.

It was not a good day, however, for those stocks that have been buoyed recently by bid speculation. Punters were spooked by the collapse of takeover talks at the kitchen equipment maker Enodis, only a day after a failed move for the telecoms group Telent.

Britvic, the soft drinks maker, slipped 1.5p to 210.75p, the car hire group Avis Europe fell 3.5p to 67p and Photo-Me International, which operates photo booths, lost 0.5p to 102.25p.

An apparent signal from the Bank of England that interest rates here may need to be lifted fuelled fears for consumer spending and unsettled retailers. Tesco lost 3p to 361p while the rival supermarket group Wm Morrison edged 1.75p lower to 218p.

JP Morgan Cazenove placed ABN Amro's 17.5 millionJessops shares, some 17 per cent of the company, at 120p each. They eased 5p to 122p. The Dutch financial services group floated the British photographic retailer at 155p a share two years ago.

ABN's broking arm, Hoare Govett, was itself busy placing 21 million Elementis shares at 82.5p each on behalf of a client, said to be the US value investor Hanover Investments. Hoare was reckoned to have made 1.5p per share placed, or £31,500. Elementis edged 1.5p higher to 87p. One of the directors of Hanover is Edward Bramson, who also controls Sherborne Investors, a specialist in making money from turnaround situations. Earlier this week, it emerged Sherborne had taken a 9.6 per cent stake in the struggling telecoms equipment group Spirent, 0.5p lower at 41.5p.

Also in the FTSE 250, decent quarterly results from the American IT giant Cisco lifted Dimension Data 1.5p to 33.5p. Reselling Cisco kit remains a significant part of DiData's business.

Numis lifted its target price for the engineering group Rotork to 789p from 750p and again urged clients to add to their holdings of the shares. They advanced 14.5p to 727p.

On the Alternative Investment Market, Personal Screening rose 0.19p to 1.25p on news its test for nicotine levels in pregnant women is to be trialled by Aylesbury Primary Care Trust.

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