Also supporting WPP was Credit Suisse First Boston, which was heard telling investors that upgrades to forecasts for the advertising giant are likely in the coming months. The broker is believed to have highlighted comments from Sir Martin Sorrell, the boss of WPP, at the recent World Economic Forum in Davos where he indicated that trading at the group is strong. WPP closed up 9.5p at 592p.
Outside the media sector, GlaxoSmithKline jumped 22p to 1,232p before today's fourth-quarter results from the pharmaceuticals group. The numbers are expected to show a 5.5 per cent rise in pre-tax profits to pounds 1.3bn. Smith & Nephew added 7.5p to 557.5p as vague takeover rumours again surrounded the company.
On the merger and acquisition front, Somerfield soared 22.5p to 184.5p after the supermarkets group admitted it had received a 190p-a-share offer from Iceland's Baugur. Numis Securities urged investors to sell into the strength in Somerfield's share price, warning them there is no certainty that Baugur will complete the deal. The broker also pointed out that the Icelandic group could lower its bid price as it did during its takeover of Big Food Group.
JJB Sports, up 8.75p to 220.25p, was tipped by traders as the next in line in the retail sector to be bid for. They believe a private equity offer is just around the corner.
Scottish & Newcastle dropped 0.5p to 455.5p after Dresdner Kleinwort Wasserstein played down the takeover speculation that has surrounded the company since the start of the year. The German broker argued that the purchase of S&N by one of its major rivals would not generate enough in the way of cost savings to make the deal attractive. It also pointed out that S&N shares now trade at a premium to the wider European beer industry, making the company too expensive to be attacked by a predator.
Bradford & Bingley lost 2.75p to 337.25p as Deutsche Bank told investors to sell the stock and urged them to switch into its rival, Northern Rock, steady at 796.5p. "B&B is the UK bank most dependent on the buy-to-let market, where we believe slowing house price inflation is likely to quell volume growth," the broker warned.
The FTSE 100 flirted with 5,000 for most of the session but closed just short of that psychologically important level at 4,990, down 5 points. In fact, a few hours before the end of business, the blue-chip index stood at 5,003 but was undermined by a weak start to trading on Wall Street. Nevertheless, brokers expect the index to close above 5,000 soon, most probably before the end of the week.
Citigroup Smith Barney called time on the awesome performance of insurer Britannic, off 15p to 495p. Shares in the group have soared by 70 per cent over the past 12 months but Citigroup believes they are now up with events and so cut its stance to "hold" from "buy".
Richmond Foods rose 10p to 652.5p on talk that the ice-cream maker continues to win market share. Robert Wiseman gained 6p to 268.5p on whispers that the milk producer is close to securing a major contract from a supermarket chain. XP Power added 5p to 526p despite news that its chief executive, Duncan Penny, had exercised options over 25,000 shares and then sold the stock at 522p. Who can blame him? Shares in the group have doubled in the past 12 months.
City legends Leonard Licht and Harry Soloman, who have kick-started the once-sleepy Falkland Island Holdings into action, were busy yesterday cashing in on their success. Mr Licht sold 400,000 shares at 450p while Mr Soloman, also a director at FIH, disposed of 200,000 at the same price. FIH, a major retailer on the islands, recently spun-off various natural resources assets on AIM, which has set its stock price alight. It is also in the process of acquiring the Portsmouth Harbour Ferry Company.
Brewin Dolphin ticked 0.25p higher to 125.25p on talk that business is booming at private client stock brokers, thanks to the recent strength in equity markets on both sides of the Atlantic. Finally, P&MM added 12p to 76.5p after a bullish trading statement from the marketing services specialist. Brokers rushed to upgrade their earnings forecasts for P&MM after the statement.Reuse content