Market Report: If it doesn't rain it pours on UK shares

Buy everything. Sell everything. The eurozone is rescued. It's doomed. Banks will be fine. They're all about to fail. That was a 10-second snapshot of a trader's brainwaves yesterday, on a day when the only constant in the City was rain.

While the deluge continued, Monday morning's shoots ofeurozone optimism dissolved into outright pessimism; the banks — which surged at the start of the week on hopes that the Spanish bailout might fix, well, everything — floundered as solid plans for a "Grexit" emerged, and anyone who failed to whip profits off the table on Monday had their head in their hands.

"People have woken up to the idea that the Spanish deal is only a short-term solution," said one City suit. "Everyone with half a brain grabbed yesterday's early gains as an opportunity to take a profit. I didn't."

Safe haven was the phrase. The defensive stocks were flying high, with fag firms dominating the benchmark index.British American Tobacco, maker of Lucky Strike, put on 45p to 3156p, while JPS firm Imperial Tobacco was close behind, up 28p to 2406p. Drugs were in favour too: pharmaceuticals giant GlaxoSmithKline put on 12p to 1451.5p as the market liked the sound of its £146m eczema drug purchase.

Dividend payers were also in demand, with Unilever, which is the world's biggest ice cream maker thanks to Ben & Jerry's and Cornetto, up 17p to 2055p, BP ticked up 2.55p to 417.45p and Vodafone was 3.65p higher at 174.7p.

Also surging ahead in the FTSE 100 was interdealer broker ICAP, up 9.2p to 346.5p, after analysts suggested it could do well out of a "Grexit".

David Lowery at Faraday Research said: "More volatility and uncertainty would lead to more trades, which in turn leads to more commission for the company. Right now looks to be the calm before the oncoming storm. With a potential spike in volatility just around the corner, ICAP is perfectly placed to see earnings and profits increase over and above current forecasts."

The FTSE rose just 41.37 points to 5,473.74 by the end of the day.

"Whilst Spain's news gave a glimmer of hope yesterday morning, later on the really intelligent people worked out it was just a pretty weak sticking plaster, and we decided to listen to them," one trader said.

Although Apple impressed techies with the new operating system and "retina display" laptop announced at the Worldwide Developers Conference in San Francisco, the lack of a major product launch gave chip designer ARM Holdings a kicking. The Cambridge company which makes Apple's processors had risen ahead of hopes of a big announcement, but yesterday lost 1.5p to 504p.

Both Glencore and Xstrata put on weight after Jefferies analysts said — in contrast to speculation that Ivan Glasenberg's group could have to shell out more cash to seal the deal — that the merger plans were likely to go ahead on their original terms.

Christopher LaFemina, Jefferies analyst, said: "We have become much less convinced that a bump is coming," flagging up a "recent deterioration of seaborne thermal coal fundamentals, significant earnings downgrade risk for Xstrata, geopolitical risk in Peru and Argentina, [and] the risk to Xstrata's copper growth pipeline," among other issues to have eased the pressure on Glencore to sweeten the terms of its proposed merger. Glencore was up 3.3p to 366.85p whilst Xstrata ticked up 8.4p to 970p.

Things have come to a pretty pass when just telling the market you won't be missing your forecasts boosts your share price. But that was the case for Premier Foods, the indebted Hovis bread giant whose shares have halved since late March. Yesterday they leaped a hefty 6 per cent, or 4.75p, to 91p, after the company issued a statement declaring that "full-year expectations for 2012 remain unchanged". So stop selling our shares. Now. Alternatively, consider its numerous refinancing efforts, the recent loss of its chairman and the risks involved with its restructuring programme and keep baling out.

Amlin, the biggest of the Lloyd's of London insurers, jumped 3.2p to 326.7p — its biggest rise in four months — after a chunky upgrade from Deutsche Bank analysts. Price rises for insurance premiums and better underwriting should set the firm fair after arguably taking on too much catastrophe risk last year — a painful mistake given that awful time for natural disasters.

Deutsche praises chief executive Charles Philipps for buying more reinsurance — just in case...

Suggested Topics
people Emma Watson addresses celebrity nude photo leak
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
Boris Johnson may be manoeuvring to succeed David Cameron
peopleHis band Survivor was due to resume touring this month
people'It can last and it's terrifying'
In this photo illustration a school student eats a hamburger as part of his lunch which was brought from a fast food shop near his school, on October 5, 2005 in London, England. The British government has announced plans to remove junk food from school lunches. From September 2006, food that is high in fat, sugar or salt will be banned from meals and removed from vending machines in schools across England. The move comes in response to a campaign by celebrity TV chef Jamie Oliver to improve school meals.
Arts and Entertainment
Life and Style
fashionModel of the moment shoots for first time with catwalk veteran
Life and Style
fashionPart of 'best-selling' Demeter scent range
ebooksAn unforgettable anthology of contemporary reportage
Tom Cleverley
footballLoan move comes 17 hours after close of transfer window
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
footballRadamel Falcao and Diego Costa head record £835m influx
Life and Style
fashionAngelina Jolie's wedding dressed revealed
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

Executive Assistant/Events Coordinator - Old Street, London

£35000 - £38000 per annum + benefits: Ashdown Group: Executive Assistant/Event...

HR Generalist (standalone) - Tunbridge Wells - £32,000

£30000 - £32000 per annum: Ashdown Group: HR Generalist (standalone) - Tunbrid...

Derivatives Risk Commodities Business Analyst /Market Risk

£600 - £800 per day: Harrington Starr: Derivatives Risk Commodities Business A...

Power & Gas Business Analyst / Subject Matter Expert - Contract

£600 - £800 per day: Harrington Starr: Power & Gas Business Analyst/Subject Ma...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering