Market Report: Bargain-hunters put brakes on FTSE fall

The City showed just how capricious it could be yesterday: the market was nearly written-off as another day in the red when buyers came back in looking for bargains during the afternoon session. What would have been the fourth day of falls, prompted by fears of an end to central bank monetary stimulus, was turned around by bargain-hunters who pushed the benchmark index up five points into the green.

Michael Hewson, an analyst at CMC Markets UK, said: "The markets staged a remarkable turnaround after dropping sharply on the open in the wake of the 6.35 per cent decline in the Nikkei overnight."

The FTSE 100 added 5.18 points to 6,304.63 – although it is still back at April levels and May's rally has been wiped out.

William Nicholls, a dealer at the spread-betting group Capital Spreads, said: "We will have to wait and see if this price represents fundamental value to investors or whether the sell-off continues. The markets will now wait with baited breath for [US Federal Reserve chairman] Bernanke's comments next week."

Top of the table was the outgoing Russian miner Evraz. Traders put its 5.8p rise to 119.5p yesterday down to a short squeeze. Hedge funds and investors had been shorting the stock ahead of its reshuffle out of the FTSE 100. These short positions are now being unwound, pushing the price up.

Some of the bargain-hunters were focusing on the oil services group Petrofac. Analysts at Citi rated it a buy and pointed out the company's pipeline of new developments as a reason to pile in.

It has been the seventh-worst performer in the year to date on the blue chips, but Citi's Ryan Kauppila said the shares now stand at a 10 per cent discount to the sector. He made it his most-preferred stock because the large projects that are due to complete will boost earnings. He gave it a 1,600p price target and the shares added 36p to 1,297p.

Royal Bank of Scotland was out of favour – the worst performer on the index, down 10.6p to 315p – following Thursday's news that chief executive Stephen Hester will leave. However, Investec said that rival bank HSBC is worth a look. It raised its target from reduce to buy and reckons punters could be in for a 6.1 per cent dividend yield by 2015.

Investec thinks the reason to buy is clear: it is a "significantly de-risked bank … with surplus capital generation which requires a home".

But HSBC dipped 1.7p to 690.4p, joining other financial stocks in the doldrums.

Scribblers at Goldman Sachs like FTSE 250-listed Aveva – the provider of software for the design of oil rigs, ships, power stations and chemical plants. They recommend it as a buy, and think market concerns of a slowdown in oil services spending "are overdone".

They think a large part of Aveva's exposure is in offshore, where spending "has been very resilient". The endorsement from Goldmans didn't help the shares and it retreated 37p to 2,213.5p.

The student accommodation business Unite has raised £51.2m via a placing of new shares to fund regional development opportunities. It was 12.4p weaker at 335.1p.

On Aim, Ingenious Media Active Capital announced the sale of Digital Rights Group, which owns the licensing rights to hit TV shows such as Doc Martin and The Inbetweeners, for £13.2m. Patrick McKenna's Soho-based Ingenious Ventures manages Imac and sold Digital Rights to the Swedish media group Modern Times Group. Ingenious broadcast a 4.8p rise to 13.75p.

The leather goods brand Mulberry reported an expected 28 per cent slump in annual profit, with profit for the year to April at £26m. It is refocusing its business on overseas markets and taking the brand more upmarket, with new store fits and wider product range.

Philip Dorgan, an analyst at Panmure Gordon, said: "Taking Mulberry up a notch in the luxury sector will take time and involves investment in a more fully rounded global proposition."

The shares edged down 18.5p to 930p after falling 8 per cent on Monday when it was announced that its creative director, Emma Hill, would leave the business after nearly six years.

More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete tomorrow
people'I’d rather have Fred and Rose West quote my characters on childcare'
Kim Jong Un gives field guidance during his inspection of the Korean People's Army (KPA) Naval Unit 167
newsSouth Korean reports suggest rumours of a coup were unfounded
Arts and Entertainment
You could be in the Glastonbury crowd next summer if you follow our tips for bagging tickets this week
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Kylie performs during her Kiss Me Once tour
musicReview: 26 years on from her first single, the pop princess tries just a bit too hard at London's O2
peopleSwimmer also charged with crossing double land lines and excessive speeding
Arts and Entertainment
A new Banksy entitled 'Art Buff' has appeared in Folkestone, Kent
Arts and Entertainment
Shia LaBeouf is one of Brad Pitt's favourite actors in the world ever, apparently
filmsAn 'eccentric' choice, certainly
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style