Market Report: Cold water poured on Pennon bid talk

Bullish comments from "Super Mario" may have seen the Footsie gush higher yesterday, but not everyone managed to stay afloat. Pennon was one of the nine blue-chip stocks to finish in the red after a bucket of cold water was poured over the utility's takeover hopes.

With Hong Kong billionaire Li Ka-shing's purchase of Northumbrian Water last year leaving just three major independent water companies, many have speculated there could be further bid activity ahead in the sector.

Pennon has been one of the groups suggested as a possible target, but yesterday Credit Suisse played down the likelihood of major takeovers. Saying that while affluent sovereign wealth funds are likely to snap up unlisted companies, analysts from the broker warned they did "not expect appetite for large-scale, hostile buy-outs".

They went on to add that if "a buyout were to take place we would view Severn Trent as the most likely candidate", as the group ticked up 19p to 1,713p. However, Pennon was left 9p weaker at 754.5p, with the scribblers also downgrading their advice on the stock by two notches from "outperform" to "underperform".

In addition, the scribblers cut their advice on United Utilities to "underperform" – although it still advanced 13p to 701.5p – and claimed there was a "murky outlook" for the sector with major regulatory changes likely.

Actions may speak louder than words, but that didn't stop the FTSE 100 shooting up after bullish comments from Mario Draghi regarding the eurozone crisis. It was on course for a fifth losing session in a row before the European Central Bank (ECB) president told a conference in London that the bank would "do whatever it takes to preserve the euro. And believe me, it will be enough".

With his comments being seen by some as a sign the ECB may restart its bond-buying programme, stocks in Europe and the US jumped higher as the benchmark index closed 74.84 points stronger at 5,573.16.

Still, one didn't have to look far for cautious voices, with analysts at Citigroup announcing they now believed the likelihood of a Greek exit from the eurozone within 12 to 18 months was a whopping 90 per cent.

Saying they feel it is most likely to happen in six to nine months, the scribblers added that they expected both Italy and Spain to receive "some form of" formal bailout and warned that the UK could lose its triple-A sovereign debt rating in two to three years.

With plenty of companies releasing results, Rolls-Royce was one of the most impressive. The engineering giant flew up 55.5p to 885p after revealing a 7 per cent jump in its first-half profits following an increase in demand from airlines for fuel-efficient planes, while bosses said the issue with its engines that saw Japan's All Nippon Airways recently ground five planes would not have a significant financial impact.

The gold medal slot was taken by Polymetal International. The Russian gold and silver miner soared 62p higher to 873.5p after HSBC's scribblers kept their "overweight" advice, although the company has still lost 7 per cent in little more than a month.

On the FTSE 250, Drax was attempting a recovery of sorts, although its climb of 27p to 469p was nowhere near enough to recover the 15 per cent which it lost on Wednesday in reaction to the Government's green energy subsidy proposals. This was despite Liberum Capital saying it still believes the power station operator may become a takeover target, suggesting it "could see an approach from a vertically integrated player once there is fuller clarity".

There was no let-up for Lamprell. The oil rig-maker announced its third profits warning in three months while warning it was trying to get some of its banking covenants waived, all of which knocked the small-cap stock back 38.5p to 84.75p, meaning it has shed more than 75 per cent since May.

The Aga is coming to China. Aga Rangemaster, the maker of the middle-classes' favourite oven, revealed it had signed a tie-up with Chinese appliance manufacturer Vatti that will see the two companies distribute each other's goods. Espirito Santo's Sanjay Vidyarthi said the deal was "a further demonstration of the strength and desirability of the Aga product and brand", although this didn't stop the group closing 3.25p lower at 68.25p.

Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
Sport
Steven Gerrard had to be talked into adopting a deeper role by his manager, Brendan Rodgers
sportThe city’s fight for justice after Hillsborough is embodied in Steven Gerrard, who's poised to lead his club to a remarkable triumph
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
VIDEO
News
The energy drink MosKa was banned for containing a heavy dose of the popular erectile dysfunction Levitra
news
Environment
People are buying increasing numbers of plants such as lavender to aid the insects
environmentGardeners rally round the endangered bumblebee
Sport
Australia's Dylan Tombides competes for the ball with Adal Matar of Kuwait during the AFC U-22 Championship Group C match in January
sportDylan Tombides was diagnosed with testicular cancer in 2011
Arts & Entertainment
Customers browse through Vinyl Junkies record shop in Berwick Street, Soho, London
musicBest exclusives coming to an independent record shop near you this Record Store Day
News
Ida Beate Loken has been living at the foot of a mountain since May
newsNorwegian gives up home comforts for a cave
Extras
indybest10 best gardening gloves
Arts & Entertainment
tvIt might all be getting a bit much, but this is still the some of the finest TV ever made, says Grace Dent
Arts & Entertainment
Comedian Lenny Henry is calling for more regulation to support ethnic actors on TV
tvActor and comedian leads campaign against 'lack of diversity' in British television
News
Posted at the end of March, this tweeted photo was a week off the end of their Broadway shows
people
News
peopleStar to remain in hospital for up to 27 days to get over allergic reaction
Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Telesales & Sales Support Apprentice

£221.25 per week: QA Apprenticeships: This company is a well established Inter...

Client Relationship Manager - SQL, Python

£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

**Financial Services Tax**

£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit