Market Report: Budget hopes boost the mood around William Hill

William Hill was among the risers as the London market ended the week on a negative note, snapping its seven session-long winning streak last night.

The bookmaker was marked up by 6.6p to 184.2p after UBS, lamenting the sharp share price falls since the end of March, urged investors to buy into the stock. Beyond valuation, the broker said William Hill faced fairly limited risks from next week's emergency Budget. VAT might rise, and would be passed on to customers, but there is little prospect of significant changes to gaming duties.

"Under the previous administration, there were discussions on whether there would be a change in the methodology in the duty levied on gaming machines, but whether the new administration has had time to assess such a change in format is unlikely," UBS said, switching its stance on the stock to "buy" from "neutral", while keeping its target for the stock unchanged at 215p.

Overall, the FTSE 100 fell back, easing by 3.05 points to 5,250.84 as the recent rally finally ran out of steam. The FTSE 250 fared better, booking a rise of 88.9 points to 9,952.7. The move down came despite news that EU authorities were planning to publish the results of bank "stress tests" in a bid to calm sentiment around the euro. The losses were capped by the mining sector, which was mostly higher, with the Mexican silver producer Fresnillo, up 3.4 per cent or 35p at 1,060p, leading the way on the benchmark.

BP was 2.25p lower at 357.45p amid late reports that it was seeking up to $7bn in loans from seven banks. Earlier, the stock touched a session high of 379.5p, up 19.8p, on feeling that the company may have dealt with the worst of the political pressure in the US, with recent days seeing top bosses visiting the White House, agreeing to set up a Gulf of Mexico claims fund, suspending the dividend and testifying in front of lawmakers.

In the wider oil and gas sector, the services group Petrofac, though 12p lower at 1,242p as crude prices softened, was in focus after Deutsche Bank said it was among the least exposed to a slowdown in engineering and construction activity in the Gulf of Mexico. Wood Group, down 3.3p at 321.3p, screens as among the most exposed, according to the broker.

Elsewhere, the broker recommended Amec, which was 6p stronger at 851p, with Deutsche labelling it a "net beneficiary" of the implications of recent events on the energy sector. "Its heavy bias toward (high value) environmental and engineering consulting leaves it well positioned to benefit from renewed demand for improved safety practices and the ultimate reengineering of offshore projects," the broker said.

The banks were mixed, with Lloyds Banking Group retreating by 0.87p to 56.32p as traders banked profits from Thursday's gains, but Royal Bank of Scotland, up 0.3p at 47p, and Barclays, broadly unchanged at 312.35p, down 0.3p, fared better. HSBC was also broadly flat at 648.6p, down 0.3p, after Oriel Securities said it was a "logical dividend income replacement for BP", as it is both heavily weighted on the FTSE 100 and makes payouts every quarter.

The outsourcer Capita was among the losers, shedding 13.5p to 786p after UBS moved the stock to "sell". The broker also weighed in on sector peer Serco, which was 6.5p lower at 621.5p after UBS lowered it to "neutral". The broker said that while it fully expected outsourcing revenues to continue growing, the pace of growth may ease under pressure from factors such as waning contract wins, lengthy bid cycles and increasing competition.

"For both Capita and Serco, we see good growth and much good news priced in at current levels," UBS explained, noting that while current valuations look reasonable in terms of Serco's and Capita's historical ranges, "such multiples were achieved in a different growth environment and represent a full market premium".

Further afield, BBA Aviation was marked up by 5.7p to 195.8p after Citigroup, returning from a company presentation, reiterated its "buy" view. The broker said management had put on a "solid" show, confirming that the US aviation market, though still around 25 per cent off its peak, was continuing to make a gradual recovery.

Cape continued to strengthen, swelling by another 12.1 per cent or 27.5p to 255p as punters bought in on overnight confirmation of a "very preliminary" bid approach. The energy support services company didn't name the suitor, only saying that the approach may or may not lead to an offer, but speculators pegged their hopes on interest from a trade buyer. Private equity buyers were also mentioned, with the rumour mill anticipating a potential bid price in the range of 290p to 325p.

The Collins Stewart analyst Michael O'Brien said interest from an established energy services company such as Bilfinger Berger or from a construction business looking at increasing its energy exposure were the most likely possibilities. Private equity is also a possibility, as Cape has held talks with such groups in the past. "We believe Cape's footprint and reputation is highly attractive, particularly in the Middle East where relationship barriers to entry are very high," he said.

FTSE 100 Risers

Vodafone 143p (up 1.75p, 1.2 per cent)

Gains ground on the possibility of Verizon Wireless dividend payments from 2012.

Xstrata 1,027p (up 16.5p, 1.6 per cent)

Rises with other miners; Ambrian initiates coverage with a "buy" rating and target price of 1,430p.

Intercontinental Hotels 1,215p (up 9p, 0.8 per cent)

Continues to rise as traders highlight growing hopes of recovery.

FTSE 100 Fallers

British American Tobacco 2,177p (down 21p, 1 per cent)

Defensives out of favour as the market's appetite for risk holds up.

London Stock Exchange 635p (down 4.5p, 0.7 per cent)

Loses ground ahead of relegation to the mid-cap FTSE 250 index.

Shire 1,445p (down 7p, 0.5 per cent)

Like British American Tobacco, comes under pressure as investors keep clear of defensive plays.

FTSE 250 Risers

Lamprell 227.6p (up 19.1p, 9.2 per cent)

Rallies on news of $129m contract win; Bank of America-Merrill Lynch reiterates "buy" view.

Bluebay Asset Management 298.8p (up 13.8p, 4.8 per cent)

KBC Peel Hunt initiates coverage with a "buy" recommendation, 440p target price.

Ashmore 253.1p (up 9p, 3.7 per cent)

KBC Peel Hunt initiates coverage with a "buy" recommendation and target price of 305p.

FTSE 250 Fallers

Victrex 1,140p (down 35p, 3 per cent)

Falls back after analysts at Citigroup switch their stance from "buy" to "hold".

Tate & Lyle 494p (down 2.8p, 0.6 per cent)

UBS raises target price for the stock from 460p to 515p but maintains "neutral" rating.

Bodycote 203.9p (down 1p, 0.5 per cent)

Eases amid profit-taking as traders to move to secure the gains achieved on Thursday.

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
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

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones