Market Report: Broker downgrade decimates Trinity

Bad broker comment bore on Trinity Mirror, the newspaper publisher, which closed down almost 10 per cent, or 11.25p, at 102.25p last night.

Deutsche Bank, which published a bearish media sector review yesterday, sparked the sell-off, downgrading the stock to "sell" from "hold" with a reduced 45p target price.

"We believe that fallout from the global credit turmoil will have a greater impact on earnings, undermining global growth and consumer spending," the broker said. "So we have downgraded again ... our 'sells' are concentrated on those stocks which still have the highest [earnings] and/or structural risk combined with inappropriate valuations."

Beside Trinity, the broker advised investors to "sell" Johnston Press, which was down 9.55 per cent, or 3.75p, at 35.5p, and Daily Mail & General Trust, which slipped to 350p, down 8.79 per cent or 33.75p.

Overall, the FTSE 100 was down 100.14 points at 5,136.12 while the FTSE 250 lost 298.43 points to 8,454.58.

The Financial Services Authority's ban on short selling failed to protect the banking sector, which traded lower amid worries about the United States government's $700bn plan to purchase toxic mortgage backed assets.

Traders said that investors were selling on concerns that the measures may be held up by a protracted debate between the executive and the legislature in Washington.

"If this [the American bailout plan] is delayed, then quite frankly the feeling that we have reached bottom looks wrong," said one market source, adding: "We may see equities turn lower than they did last week." One theory doing the rounds suggested that the sell-off exemplified a flaw in the FSA's short-selling rules – it was said that the ban removed the possibility of covering, i.e., the buying of shares, thereby leaving financial securities exposed to selling.

This was met with scepticism among a number of traders, who said that there were genuine concerns underpinning the selling. One said: "It does not look so unusual and technical to us – at least not today. We will probably learn more about how this playing after data from a few more sessions."

Beside concerns about the American plan, the sector was under pressure from a new British Bankers' Association report, which said that mortgage approvals had touched a fresh a low in August. As a result, HBOS, which is the subject of an all-share offer from Lloyds TSB, was down 13.78, or 28.8p, at 180.2p. Lloyds was down 4.82 per cent, or 13.25p, at 261.75p and Barclays lost 4.22 per cent, or 15.75p, to 357.25p. HSBC, which is seen as one of the most defensive banks in the UK, was the lone riser in the sector, up 8p at 874.5p.

London Scottish Bank, which was the subject of the first short-selling disclosure under the new FSA rules, was down 7.97 per cent, or 0.47p, at 5.43p after Timothy Babich's Fortelus Capital said that, as of last Friday, it had a short position in 5.33 per cent of the company's stock.

Elsewhere, British Energy was down 4.5p, at 724p, despite talk that the EDF board was due to decide on a 774p-per-share offer at a meeting last night.

"It's had little effect on the stock because I think the market is just tired of these rumours. There have been so many," said one trader, explaining the weakness in the stock.

The heavyweight resource stocks fell back after commodity prices eased and Anglo American was down 8.21 per cent or 191p at 2,136p. Xstrata lost 187p to 2,235p while its bid target, Lonmin, was down 53p, at 2,540p.

Vedanta Resources was down more than 10 per cent or 177p, at 1,527p, after reports in the Indian press indicated that The Children's Investment Fund, the London-based hedge fund, was planning legal action against the miner on the grounds that its recent restructuring proposals were skewed against minority shareholders.

A disappointing trading statement from Mitchells & Butlers, down 6.24 per cent or 17p at 255.5p, struck pub companies and Punch Taverns was down 13.04 per cent or 27.75p at 185p while Enterprise Inns, which is due to update the market next week, slipped back to 186p, down 7.23 per cent or 14.5p.

The BBA's report on mortgage lending sullied sentiment in the housing sector and Barratt Developments was down 7.56 per cent or 10.75p at 131.5p. Bellway slipped to 630p, down 7.35 per cent or 50p, and Taylor Wimpey lost 2.25 per cent or 2.5p to 45.5p.

On the upside, positive comment from Goldman Sachs took business outsourcing specialist Xchanging 254.25p, up 5.25p.

"Outside sections of Xchanging's procurement and HR [human resources] business, cyclicality is limited; we expect these operations to prove relatively stable in difficult economic times," the broker said, initiating coverage on the stock with a "neutral" rating.

Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Life and Style
The veteran poverty campaigner Sir Bob Geldof issues a stark challenge to emerging economies at the Melbourne HIV/Aids conference
Arts and Entertainment
Benedict Cumberbatch and John Malkovich talk Penguins of Madagascar at Comic-Con
comic-con 2014Cumberbatch fans banned from asking about Sherlock at Comic-Con
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
filmGuardians Of The Galaxy should have taken itself a bit more seriously, writes Geoffrey Macnab
Sir Chris Hoy won six Olympic golds - in which four events?
Life and Style
People may feel that they're procrastinating by watching TV in the evening
ebookA unique anthology of reporting and analysis of a crucial period of history
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 Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Graduate Recruitment Resourcers - Banking Technologies

£18000 - £25000 per annum + OTE £40,000: SThree: Huxley Associates are looking...

Associate Recruitment Consultant - IT

£20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

Business Analyst

£300 - £350 per day: Orgtel: Job Title: Business Analyst Rate: £300 - £350 per...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform