Market Report: EMI hits flat note as bearish talk scares off investors

THE MUSIC group EMI hit a wrong note yesterday as whispers of lacklustre trading in its European operations resounded around the stock.

The bearish sounds sent the stock down 4.5 per cent as investors for most of the day as several investors headed for the exit.

A late rebound curbed some of the losses and EMI closed just 4.5p off at 461.5p. However, dealers said that the afternoon rally was somewhat misleading as it was caused by a series of electronic trades just before the closing bell. They pointed out that, in after-hours trading, EMI had resumed its downward path and was trading some 1.6 per cent lower at 458p. The fall came despite an upgrade from Deutsche Bank, which talked of positive developments in EMI's Internet business, and continued talk of a joint distribution venture with Canadian rival Seagram.

The bears' case centres on rumours that the EMI's music sales in some of its core European markets are flagging. According to the rumours, the company is having a tough first half in Germany, where star acts such as Robbie Williams, Janet Jackson and Rod Stewart have failed to catch the imagination of the Teutonic teenagers.

Germany is an important market for EMI and some market watchers believe that the sales slowdown could spread to neighbouring European markets.

Industry experts have pointed out for some time that EMI's roster is not as good as some of its competitors and the feeling is that the European listening public now agrees.

EMI shares have lost nearly 17 per cent over the past couple of months and any further loss will inevitably revive talk of a takeover from Seagram, News Corporation or even Disney.

The overall market toasted the earlier opening hours with a dull performance. Traders, who had to start at 8am to fall in line with their German counterparts, said that the first hour of trading was flat as a pancake as the large players steered clear of the market. Despite the earlier start, most of the large institutions still hold their morning meetings at 8:15am and do not start trading until 9am. The Jewish holiday of Yom Kippur also contributed to depress activity as dealing desks in both London and New York were at less than full capacity.

These series of non-events left the FTSE 100 a mere 16.7 higher at 6,056.5. The second liners were even less active and the FTSE 250 edged 0.7 higher to 5854.8, while the SmallCap firmed 2.9 to 2769.3.

The tank-maker and marine engineer Vickers soared an amazing 80.5p to a 12-month peak of 246p in huge volume of 71 million shares, after firing a broadside at the market with the shock news of a 250p-per-share cash offer from Rolls-Royce. However, Rolls plummeted 10.75p to 215.25p as dealers fretted about the huge premium.

Fellow defence engineer GKN shot 38p higher to 910p after a push by ABN Amro and HSBC. The market whisper is that GKN will counter Rolls' move with its own acquisition.

Engineer Charter joined the party with a 16.5 p rise to 357.5p. The pounds 200m sale of its specialist engineering division to private equity group Candover should be close.

Water utilities were in full flow on renewed bid rumours, a returning passion for defensive stocks and talk of a large research note. Severn Trent gushed 37p higher to 960.5p on vague whispers of a strike from Germany's RWE. Kelda, the old Yorkshire Water, climbed 15.5p to 410p on revived speculation of an offer from Midlands Electricity, while Hyder, another old bid chestnut, rose 16p to 552.5p.

Buying ahead of forthcoming analysts presentation supported Granada and Unilever. The TV and hotels group jumped 32p to 567.5p as CSFB said "strong buy" before the analysts' meeting. The market believes Granada could strike a media deal and buy other stakes in football clubs. Unilever rose 23.5p to 596p ahead of today's bi-annual brokers' presentation. Expect an update on rumoured acquisitions such as France's Revlon.

Retailers had one of their worst days since the invention of shopping. Clothes chains were unsettled by talk of bad trading and imminent profit warnings at Marks & Spencer, 15p lower to 338.75p after a series of downgrades, and Bhs group Storehouse, 8.75p lower to a five-year nadir of 95.25p. Ominous whispers of financial problems is swirling around Storehouse. Next, 36.5p lower to 624.5p and Debenhams, 8.75p down at 311p, fell in sympathy.

Food retailers were hammered by the price war started by Wal-Mart-owned Asda. Tesco, 5.5p lower to 183.5p, said it would also slash prices, and troubled J Sainsbury, down 7.5p to 405.25p, and Safeway, 5p lower to 250p will have to follow suit to survive. Fears of a price war on toiletries sent Kingfisher, the owner of Superdrug, 22.5p lower to 652p and Boots 21p down to 725.5p.

Travel group Airtours rose 9.5p to 410.5p on rumours - confirmed after the close - it could sell some more businesses in exchange for the regulatory approval of its bid for First Choice, 1p higher at 148p.

Metal trader MG was rusty on its first trading day. The stock fell 15.5p below the bottom-of-the-range flotation price of 205p to 189.5p. Ofex- traded Hilfe, a political consultancy group, had a better debut, rising 0.5p to 3.5p, amid talk of a couple of deals in Holland and Germany. The one-time star stock Freeserve dropped 9.25p to 146 - below its 150p offer price amid fears that the Internet bubble is about to burst. Parent Dixons plunged 53p to 1056p.

Drug group Medeva firmed 4.5p to 136.5p amid whispers of a hostile bid from spurned merger partner Elan, down 27.5p to 1975p. AIM-listed SR Pharma soared 23.5p to a yearly record of 406p on talk of imminent licensing deals for its asthma drug.

Independent Radio tuned in to a 18.5p rise to 109.5p on rumours of a bid from Talk Radio while packaging group Waddington wrapped up the rumoured management buyout bid and rose 31.5p to 233.5p.

Oil explorer Sibir lost 1.5p to 10.25p despite talk of positive drilling news at its forthcoming results, while engineer Haden Maclellan plunged 6p to 47p after a profit warning.

SEAQ VOLUME: 1.03BN

SEAQ TRADES: 75,755

GILTS INDEX: 103.86 - 0.39

THE MEDICAL equipment maker Tepnel Life resumed its upward path yesterday with a 3.5p rise to 46p in hefty volume of nearly 2 million shares.

Punters believe that a major licensing deal is in the offing. The company is in talks with a number of large medical companies over the licensing of its revolutionary DNA-purifying kit. The market's talk is that a deal, possibly with the US giant Thermo Electron Corporation, could soon be announced.

THE TAKEOVER buzz around the electrical contractor T Clarke is growing by the day. The shares yesterday touched an all-time high of 228.5p, after a 4p rise as buyers continued to talk of an imminent strike.

The rumour is that the group might have attracted the attention of a large construction group. Names of possible predators abound, but the market favourite seems to be John Mowlem, 0.5p lower at 124.5p.

Suggested Topics
Life and Style
tech

Sales of the tablet are set to fall again say analysts

News
A Brazilian wandering spider
news

World's most lethal spider found under a bunch of bananas

Life and Style
fashion

British supermodel and hitmaker join forces to launch a 'huge song'

News
news

The Duke and Duchess of Cambridge announce they are set to welcome second child in spring

PROMOTED VIDEO
Life and Style
gaming

I Am Bread could actually a challenging and nuanced title

Sport
Mario Balotelli pictured in the win over QPR
footballInternet reacts to miss shocker for Liverpool striker
Voices
Sol Campbell near his home in Chelsea
voices
News
i100
News
Kimi the fox cub
newsBurberry under fire from animal rights group - and their star, Kimi
Sport
Fans of Palmeiras looks dejected during the match between Palmeiras and Santos
footballPalmeiras fan killed trying to 'ambush' bus full of opposition supporters
News
ebooksAn unforgettable anthology of contemporary reportage
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

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Project Coordinator - 12 month contract

£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

Day In a Page

Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

How We Met: Hugh Bonneville & Peter James

'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

Bill Granger's heavenly crab recipes

Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
Radamel Falcao: How faith and love drive the Colombian to glory

Radamel Falcao: How faith and love drive the Colombian to glory

After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

Terry Venables column

Premier League managers must not be allowed to dictate who plays and who does not play for England
The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

Michael Calvin's Inside Word

Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past