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.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
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

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'