Market Report: Tesco slips despite bullish note from broker

When the stock market decides it is moving in one direction, it can be very difficult for any stock to resist. Even an exceptionally bullish analyst's note from Deutsche Bank yesterday, on Tesco, was not enough to stop its shares falling, although a 4.5p drop to 316.5p was a better performance than the wider market.

Deutsche Bank believes now is "the best opportunity to buy the shares in the last four years", with Tesco's international business significantly undervalued by the market. The broker expects the international retailing business to grow at 20 per cent per year.

The Deutsche Bank analyst James Collins upgraded his price target on Tesco shares from 370p to 400p, noting the company still has "great growth potential" through its non-UK business, which he believes the market is valuing at only four to seven times earnings. Even so, with the rest of the market increasingly looking like a bloodbath, Tesco bulls were powerless to prevent the stock from finishing in the red.

Another retail giant, Marks & Spencer, outperformed the wider market but still fell 8p to 567p. It is due to report full-year figures today, with some traders expecting forecast-busting numbers showing a rise in pre-tax profits of up to 30 per cent. Even so, many traders feel that, in current market conditions, the results will have to be spectacular if more selling is avoided.

Despite the weak market trend, there was enthusiastic support for the mobile telecoms stock Vodafone, although the shares were unable to end the session in the black. Traders are convinced a deal will be struck to sell the company's 45 per cent stake in Verizon Wireless to its joint venture partner, Verizon. The US telecoms group is known to be keen to buy the stake, with Vodafone thought to be thrashing out a price. Even so, the shares lost 3.5p to close at 118p. Elsewhere in telecoms, BT Group beat the market by closing 1p firmer at 224.5p on the back of last week's well-received results.

Weak commodity stocks led to another trading day as gloomy as the weekend weather, with the FTSE 100 quickly moving into triple-digit losses, closing at 5,532.7 - a fall of 124.7 and the lowest close of the year.

Leading a shortlist of FTSE 100 gainers was Alliance & Leicester, after the French banking group Crédit Agricole confirmed the long-circulated rumour that it is preparing a bid for the UK's third-largest mortgage lender. An initial burst of enthusiasm saw A&L shares soar in early trade, peaking at 1,263p, a 148p rise, before profit-takers moved in. A&L finished at 1,143p, a rise of 28p, comfortably the best-performer in the index.

The oil exploration and production stock, Soco International, was among the leading second-line fallers, 157p lower at 1,115p. Despite bullish broker reports and upbeat drilling newsflow from its Vietnamese operations, the shares have lost 31 per cent from the high of 1,610p hit a couple of weeks ago. Petrofac was not far behind, dropping 32p to close at 259.75p.

Also in the red was the entire housebuilding sector. After a big bounce-back in Friday's session, when Thursday's losses were regained, it was back to selling pressure as investors' concerns over a rising interest rate environment pegged the sector back. George Wimpey led the way, 30.5p lower at 427.5p, followed by McCarthy & Stone, 32p worse at 727.5p and the FTSE 100 representative, Persimmon, down 68p to 1,132p. Some traders believe the US housing market is due for a substantial correction that could spark a similar reaction in the UK. The mortgage broker Kensington was also out of favour on house market worries, falling 125p to 930p.

Watford's win over Leeds United in the play-off final gave the owners Watford Leisure a boost, 5.5p better at 38p. As previously mentioned in this column, investors seem to believe getting into the Premier League through the back door of a play-off win is a better guide to survival than by winning automatic promotion. Shareholders of Sheffield United must be wishing their club had not won automatic promotion - shares in Yorkshire's only representative in the top flight are still languishing at 16.5p, unchanged, more than 30 per cent lower than the 23.75p they were trading at when the club clinched promotion.

The network service provider Netservices reported a first-half pre-tax loss and said converting new orders was slowing, and its shares closed23p lower at 53.5p as investors deserted the stock.

The tightly held China Real Estate Opportunities continued to display volatility, with the shares again showing big falls on very light volume. Market-makers blamed the small free float, with the directors thought to be locked into 90 per cent of the shares. As a result, they fell 137.5p to 762.5p on volume of only 1,619 shares.

PROMOTED VIDEO
News
ebooksNow available in paperback
Arts and Entertainment
tvStrictly presenter returns to screens after Halloween accident
News
peopleFormer civil rights activist who was jailed for smoking crack cocaine has died aged 78
News
i100
News
Boxing promoter Kellie Maloney, formerly known as Frank Maloney, entered the 2014 Celebrity Big Brother house
people
Sport
Dwight Gayle (left) celebrates making it 1-1 with Crystal Palace captain Mile Jedinak
premier leagueReds falter to humbling defeat
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin