Market Report: Barratt demolishes rumours of rights issue

Barratt Developments, the housebuilder besieged by fears of an emergency rights issue last week, led a housing sector recovery yesterday.

The company's shares had suffered after some ugly rumours, suggesting that it was close to breaching its banking covenants, began circulating on Thursday. While some weekend newspaper reports made similar claims, wary investors were placated by the company, which dismissed the speculation and denied it was planning to raise funds via a rights issue.

The support took the company's shares, which lost more than 7 per cent of their value in January, up by 6.98 per cent or 25.75p to 394.75.

The rest of the sector, invariably depressed since the first fears of an economic slowdown were aired in public, also had a good start to the week.

Persimmon, which saw its share price slump by about 3.6 per cent last month, rose 2.35 per cent or 16.50p to 718p, while Taylor Wimpey, which lost almost 12 per cent last month, was up 2.73 per cent or 4.60p to 172.90p. Others, including Bovis Homes, which gained 4.59 per cent or 25.50p to 581p, Berkeley Group Holdings, which gained 4.83 per cent or 49p to 1,063p, and Bellway, which gained 1.25 per cent or 9.50p to 770.50p, were also up yesterday.

Elsewhere, the banking sector, after suffering under the pressure of some bad results from Bradford & Bingley last week, recovered from its depression yesterday.

Stocks were buoyed by reports that Barclays and Lloyds TSB, both of whom are slated to publish full-year results this week, were preparing to unveil higher dividend payments for shareholders.

The sector also got a boost from news that Northern Rock, the embattled high street lender, was finally going to be nationalised – investors and traders were pleased to be rid of the uncertainty surrounding the company, and also hopeful that the next time the Bank of England is faced with a case of a company strained by liquidity problems, it would likely be less reticent when asked for support.

The (relatively) happy mood took Barclays' stock, up 7.60 per cent or 32.50p to 460p, to the top of the FTSE 100 leader board. Lloyds TSB was just behind, claiming the number two spot, as its share price swelled by 7.26 per cent or 28.75p to 424.50p.

Others in the sector, including Bradford & Bingley, which gained 2.41per cent, or 4.25p, to 180.50, HBOS, which gained 5.01 per cent or 30.50p to 639p, and the Royal Bank of Scotland, which gained 2.92 per cent or 10.25p to 361p, were also up.

Alliance & Leicester, pegged by some to make the worst showing of the big banks due to update the market this week, was up too, gaining 3.90 per cent or 20.50p to 545.50p.

Strong banking stocks helped the FTSE 100 index stay buoyant all day and it closed at 5946.60, up 159 points or 2.75 per cent.

The benchmark index was also helped by the miners, who continued to rally on the back of firm commodity prices and sector consolidation hopes. Vedanta Resources was the best of the lot after its Hindustan Zinc subsidiary raised the price of lead. Vedanta's shares gained 5.21 per cent or 108p to 2,180p, claiming fifth place on the leader board, while sector counterpart BHP Billiton climbed to 1,618, up 4.32 per cent or 67p at 10th place on the leader board.

The FTSE 250 also had good start to the week and rose to 10,084, up 1.88 per cent or 186.10 points.

On the FTSE 250, profit taking and a reduction in Credit Suisse's target price for its stock hurt Ladbrokes, the betting and gaming group which was boosted by bid speculation last week. In a note on the sector, while upgrading its recommendation from "under-perform" to "neutral", Credit Suisse cut its target price to 350p, from 380p. The company's shares were down 1.50p to 327.50p.

Also on the FTSE 250, pub group Mitchells & Butlers was at the centre of speculation suggesting that it may be the subject of a bid from Blackstone and CVC Capital Partners, who may attempt to counter an offer by Punch Taverns, a rival pub company. The speculation helped lift M&B's shares by 2.25p to 445p. Shares in Punch Taverns were also up, and gained 5p to 646p.

On AIM, nanotechnology specialist Oxonica had a spectacular start to the week. The company's shares climbed an astonishing 120 per cent or 27p to 49.50p after it said that trials of its Enirox fuel catalyst by its largest customer Stagecoach Group had revealed "significant" fuel savings.

Also on AIM, Cape Lambert Iron Ore continued to rally on the back of positive test results from its Pilbara iron ore project in Western Australia. The company's shares closed up 16.67 per cent or 2.50p at 17.50p, claiming seventh place on the AIM-All Share index.

Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind-the-scenes to watch the latest series
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
Winchester College Football (universally known as Winkies) is designed to make athletic skill all but irrelevant
Life...arcane public school games explained
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
i100(and it's got nothing to do with the Great British Bake Off)
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
news It's not just the world that's a mess at the moment...
footballPremiership preview: All the talking points ahead of this weekend's matches
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
ebooksAn evocation of the conflict through the eyes of those who lived through it
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Mario Balotelli pictured in his Liverpool shirt for the first time
Life and Style
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

Data Scientist (SQL,Data mining, data modelling, PHD, AI)

£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone