Market Report: Financials savaged by wary bears

BEARISH ANALYSTS savaged financial shares, killing any hopes the market may have nursed of making headway. Royal Bank of Scotland tumbled 61p to 827p - Morgan Stanley caution was credited with the fall - and Lloyds TSB lost 28p to 780p as Credit Lyonnais described the shares as a sell on valuation grounds.

Halifax suffered from HSBC comments that the former building society was the most expensive share in the banking sector, and Bank of Scotland was hit by BT Alex.Brown. Despite HSBC's valuation Halifax, after falling 30p, ended 7p higher at 852p as the market decided to dwell upon the possibility of corporate action.

Barclays, off 30p at 1,205p, was dragged back into the Halifax equation after weekend reports they were in talks. Prudential Corporation, another Halifax candidate, fell 16p to 813p on analytical distress after last week's disappointing out-turn from Royal & SunAlliance. CGU, third-quarter figures tomorrow, ended 22p (after 60p) down at 898p. Royal lost 8p at 493p.

The cautious stance - described as "neutral" - adopted by Morgan Stanley surprised the market. The US investment house has long been enthusiastic about the banking sector. National Westminster, down 25p at 960p, was another of its targets; so was Standard Chartered, which fell 28.5p to 610.5p.

Footsie, off 91.9 points just before the market closed, experienced a late flurry, ending 57.1 down at 5,433.9. Trading was lacklustre. Supporting shares also gave ground, with the mid cap off 7.2 and the small cap, 0.3.

Analysts also took shots at Rentokil Initial, the environmental group, with CSFB repeating its sell advice and lowering the shares 14p to 373p. But engineer Siebe shrugged off HSBC unease, heading the Footsie leader board with a 14p gain to 223p.

British Airways offered the expected low-flying performance but ended unchanged at 405p after at one point falling 17p. LucasVarity was little changed at 208p, following an early 14.5p fall. The shareholder rejection of the proposed US move provoked busy trading.

Somerfield, up 23.5p to 448.5p, continued to benefit from Friday's meetings with analysts, and Iceland, ahead of meetings, improved 11.5p to 215.5p.

Chemicals were given a whirl following the merger of Switzerland's Ciba Speciality Chemicals and Clariant. Imperial Chemical Industries added 9p to 599p and Laporte 4.5p to 556p, although few thought the Swiss deal would prompt further corporate action.

Takeover rumours caused flutters of excitement. Blacks Leisure, the sporting retailer, rose 17.5p to 254p; a 320p offer was the popular guess. Save, the petrol retailer, was given another nudge, up 9p to 79p, in busy trading.

Allied Carpets rolled 8p ahead to 54.5p as the market waited in vain for details of the signalled takeover bid. Worries about trading at Liberty, the Regent Street store, lowered the shares 25p to 155p; they were 442.5p two years ago. Marks & Spencer strengthened 8p to 418p as the succession battle intensified.

Talk of bids and deals stirred Rank, the leisure group. John Garrett, former head of the group's leisure division, seems to have acquired the backing for a pounds 900m shot at recapturing his old empire. Others are known to be circling the cinemas to pubs operation, which ended little changed at 264p.

Enterprise Oil rose 17p to 402p. It is expected to announce positive drilling results soon. Updates are expected on developments in the US, Italy and Australia. BT Alex.Brown estimates that around 30p could be added to Enterprise's net asset value, now 554p a share.

Pilkington, the glass struggler, added 3p to 77.5p in active trading. Franklin Resources, the US fund manager, took its stake to 15 per cent. Oechsle, a German investment group, has nearly 3 per cent.

Ladbroke, with a trading statement due on Thursday, slipped 7p to 229p, and department store chain Debenhams ran into renewed profit-taking, off 10.5p to 377.5p.

Computer shares had an uneasy session. Micro Focus, 9p to 121p, lost further strength following its disappointing trading statement and Admiral fell 55p to 990p. CMG softened 55p to 1,525p.

Churchill China was the day's worst performer: the shares were smashed 30p to 87.5p after the third profits warning in six months. William de Broe cut its year's profits forecast from pounds 3m to pounds 1.8m. Last year the shares were 715p.

Storedata Solutions fell 0.5p to 3.5p. A cautious trading statement was accompanied by predictions of a significant acquisition. Jourdan held at 44.5p. Chairman David Abell has raised his shareholding to 15.2 per cent, buying 450,000 shares.

SEAQ VOLUME: 706.7 million

SEAQ TRADES: 64,366

GILT INDEX: 110.85 +0.35

BICC, the cable and construction group around which swirl rumours of corporate action, put on 2p to 56p in keen trading after a meeting with analysts at its Mayfair headquarters.

It would appear that chief executive Alan Jones wants to hold on to the construction division but may be tempted to offload the cables side. After poor figures last month BICC shares fell to a 38p low.

EMERALD ENERGY fell 1.25p to 6p after a mixed report on its Colombian drilling, with "apparent inconsistencies" at the Gigante 1A well. A review is under way, but the well is regarded as a production unit and the rig is being moved.

Nearly 20 million shares were traded, putting little Emerald just behind British Petroleum as the day's most heavily-traded share.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones