Market Report: Inmarsat shines as the FTSE 100 slumps

Inmarsat was among a handful of blue-chip shares that managed to rise as the FTSE 100, under pressure amid worries about the recovery, dipped below 5300 points last night.

The mobile satellite operator saw its shares rise by 17.5p to 739p as traders bought in on a read-across from an overnight speech by the US telecoms regulator. Julius Genachowski, the chairman of the Federal Communications Commission (FCC), said he wanted to free up American airwaves for wireless broadband networks in an attempt to keep up with the expanding demand from mobile users.

His proposals, including a more flexible approach to frequency bands, were seen as positive for Inmarsat, Analysts said such a move could in due course make the company's rights over the airwaves more lucrative. Besides the read-across from the FCC, Inmarsat's stock was also boosted by a spot of bid talk, with speculators citing renewed speculation about the prospect of an approach by the US hedge fund group, Harbinger.

Overall, the bears dominated the London market last night, with the FTSE 100 declining by 1.2 per cent, or 64.69 points, to 5278.23 and the FTSE 250 falling by 1.4 per cent, or 132.24 points, to 9226.94.

A combination of factors – such as worries about the fiscal situation in Greece, renewed concern about monetary tightening in China and grim business investment figures from the Office for National Statistics – sparked a flight from risk and investors moved out of equities in droves.

The ONS data, in particular, stoked nervousness ahead of the release of Britain's revised fourth-quarter GDP figures, which are due this morning. Late news from the US, where weekly unemployment claims rose unexpectedly, only served to further dampen the mood in the final hours of trading.

Resources stocks were hit as commodity prices eased back amid worries about the sustainability of the recovery. Xstrata was among the weakest stocks, declining by 50p, or almost 5 per cent, to 1000p, while Anglo American lost 78.5p to close at 2306.5p and Antofagasta fell by 18.5p to 861p. Rio Tinto was down 112p at 3250.5p, Vedanta Resources fell 71p by to at 2464p and Kazakhmys slipped 25p to 1307p.

In the oil and gas sector, Tullow Oil fell by 37p to 1164p as crude oil prices dropped. Cairn Energy lost 9.9p and closed at 329.3p, while BG shed 34p to end on 1130p. Royal Dutch Shell and BP were relatively less weak, easing back by 27p to 1761p and by 8.9p to 567.4p, respectively. The energy services specialist Petrofac was also hit by the sell-off, losing 31p to close at 1000p. Royal Bank of Scotland, boosted by better-than-expected results and some encouraging comments about its bad debts, rallied by more than 6 per cent, or 2.25p, to close at 38.38p.

The RBS update also supported Lloyds, which firmed up by 1.41p to 54.9p as hopes rose ahead of its full-year numbers this morning. The wider banking sector remained in negative territory, however. Standard Chartered lost 24p to close at 1533.5p, HSBC eased back by 7.8p to 710p and Barclays retreated by 3.15p to 306.85p.

The pharmaceuticals company Shire closed 27p higher at 1392p thanks to Bank of America-Merrill Lynch, which raised its estimates and target price for the stock from 1400p to 1630p.

Positive comment from brokers also supported Vodafone, which managed to jump 1.3p to 142.3p after Deutsche Bank reiterated its "buy" view, noting that recent updates from European telecoms operators had added to its conviction "that the third-quarter revenue growth inflection seen at Vodafone is no spurious data point".

Elsewhere, Mondi retreated by 10.4p to 365.4p despite BofA-Merrill raising its target price for the stock from 375p to 410p. "Mondi's European and international performance was good in the second half of 2009 and a firming fourth-quarter order book is encouraging," the broker said. However, it noted that, on the flipside, "South Africa remains a headwind".

Further afield, UBS issued a "buy" note on the video games retailer Game, which closed 0.65p higher at 80p. Noting the recent weakness in the retailer's share price, UBS said any further dips "could be viewed as particularly attractive entry points on a 12-month view". It also weighed in on recent bid talk, saying a stronger US dollar and low valuation made Game increasingly attractive for a potential takeover by its US rival GameStop. McBride, which produces own-brand household goods and personal care ranges for supermarket chains, also edged up 0.6p to 238p after Altium reiterated its "buy" recommendation.

"For those seeking a hedge against a double-dip recession, McBride [has] a proven track record to win market share versus the branders in all of the recessions of the past 20 years," the broker said in a note to investors.

"Over the past 18 months, McBride's input cost pressures have been largely offset by securing selling price increases and cost-cutting.

"Furthermore, contracts with the supermarkets and mass retailers have been renegotiated to a three to six month rolling basis, allowing McBride to force through price rises if raw material prices demand it."