Market Report: Centrica up on talk of Russian bid in pipeline

British Gas-owner Centrica was in focus last night as speculators piled in on rumours regarding the possibility of a bid from Gazprom, the Russian energy giant.

The Russians were said to be mulling an offer of as much as 400p per share, a significant premium to last night's closing price of 256.7p, up 4.5p, with some suggesting that a proposal may be forthcoming before the end of the year. Traders, although careful not to discount the possibility of an approach, were generally unconvinced. Similar rumours in the past have amounted to nothing, they said.

In the wider utilities space, Morgan Stanley issued a new circular, scaling back its target prices on a number of companies on account of its expectation of a tough outlook for the water sector. "We differentiate the two stocks we see as having greater regulatory risk – United Utilities and Severn Trent – from those that do not – Pennon and Northumbrian Water – by setting our price target for United and Severn midway between our base and bear cases," the broker said, setting a 420p target on United, which closed 1.7p higher at 477p, and a 905p target on Severn, which was flat at 1005p. The target for price for Pennon, up 6.2p at 480.2p, was moved to 460p, while that for Northumbrian, up 1.5p at 243p, was reduced to 225p.

Overall, the FTSE 100 was broadly unchanged, edging lower by 3.8 points to 5342.13. The mid-cap FTSE 250 fared better, rising by 29.9 points to 9431.05. Given the paucity of significant economic data, traders said it was natural for the market to remain range-bound for the time being. Much depends on the US weekly jobless figures, which are due later today, they said, adding that any signs of a recovery could help to push the FTSE 100 through the 5400-point barrier.

The mining sector led the way on the benchmark index, with leading stocks tracking further gains in the price of leading commodities. Fresnillo, the Mexican silver miner, stood out, climbing to 920p, up almost 5 per cent or 43p, while Lonmin, the platinum producer, swung to 1744p, up 3.6 per cent or 61p. Xstrata gained 4.8 per cent or 52p to 1127p, and Rio Tinto was 77.5p heavier at 3310p at the end of the day. Vedanta Resources was also strong, rising by 62p to 2452p after UBS reiterated its "buy" recommendation, with a revised 2750p target price, compared to 2250p previously.

Elsewhere, Cobham, the defence group, rose to 236.2p, up 6.2p, following some words of support from Morgan Stanley, whose analysts began covering the stock with an "overweight" stance. The broker said the company was its "new top pick in the sector", as its exposure to hi-tech communications, surveillance, cyber warfare and intelligence segments fits well with the changing priorities of the US Department of Defense. "Our view is reinforced by Morgan Stanley strategists, who rate Cobham as the sixth best stock in their European reliable growth screen," the broker added, setting a 300p target price on the stock.

On the downside, the supermarket group Morrisons lost almost 5 per cent or 14.6p to 280.9p after it emerged that chief executive Marc Bolland was leaving to take over the same position at Marks & Spencer, which, with a 5.9 per cent or 21.7p rise to 390p, was perched at pole position on the FTSE 100.

Analysts welcomed the news, with Execution's Caroline Gulliver saying that while Mr Bolland lacked experience in the clothing and online arenas, "his motivational leadership style and FMCG [fast moving consumer goods] marketing experience should stand him in good stead".

James Monro at S&P Equity Research also welcomed the news, saying: "Bolland will take over faced with what could be a potentially very difficult 2010, but we believe it offers a very good opportunity for new blood to reinvigorate M&S."

Changes were also afoot at ITV, up 1.8p at 53.75p, which announced the appointment of the former Asda boss Archie Norman as chairman. Royal Bank of Scotland said the news should be well received by investors, noting that besides his track record in business, Mr Norman, a former Tory MP, "is also politically well connected with the Conservative Party, which could prove useful given they are potentially the new UK government and that ITV could benefit from deregulation".

Back on the upside, and Cadbury, up 9.5p at 797.5p after climbing as high as 802.5p at one point in the day, was in focus after Hershey and Ferrero responded to speculation regarding a possible joint offer to trump Kraft's advance. In separate statements, the two companies said they were reviewing their respective options, adding that there was no certainty that any proposal will be forthcoming.

Ladbrokes rose to 133.1p, up almost 5 per cent or 6.1p, after Bank of America Merrill Lynch weighed in, upping its stance on the stock to "buy" from "underperform" on the view that the worst may be past in terms of recent customer-friendly football results that have pressured margins. "The proportion of draws has risen through the season which should lead to a normalisation of margins," the broker said, revising its target price to 160p, compared to 140p previously.

PROMOTED VIDEO
News
Bryan Cranston as Walter White, in the acclaimed series 'Breaking Bad'
news
News
There have been various incidents of social media users inadvertently flouting the law
news

Sport
footballChelsea 6 Maribor 0: Blues warm up for Premier League showdown with stroll in Champions League
Arts and Entertainment
Princess Olga in 'You Can't Get the Staff'
tvReview: The anachronistic aristocrats, it seemed, were just happy to have some attention
Life and Style
tech

Board creates magnetic field to achieve lift

News
Renee Zellweger as Bridget Jones
i100
News
ebooksAn unforgettable anthology of contemporary reportage
News
Those who were encouraged to walk in a happy manner remembered less negative words
science
Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
News
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
i100
Sport
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
Environment
Sudan, the last male northern white rhino
environmentThe death of a white northern rhino in Kenya has left the species with a single male. These are the other species on the brink
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth