Market Report: Little love for Eros as it puts US move on hold

 

Wall Street will have to wait – Eros International is not in a New York state of mind quite yet. While the Bollywood film company hasn't given up on its dreams of the Big Apple, the news it is delaying its move across the Atlantic meant the group bombed in the Square Mile yesterday.

Earlier in the year the movie producer and distributor – whose recent hits include superhero film RA.One, starring Shah Rukh Khan – revealed it was going to leave the junior stock market Aim and relist on the New York Stock Exchange.

The idea is that the change will prompt a rerating thanks in part to finding itself among more similar companies. However, Eros' admission that it had not yet fixed a date for the move saw it knocked back 54.5p to 199p.

The group blamed "market conditions" for its uncertainty, and Facebook's recent, disastrous float has certainly caused some to worry over the reaction new entrants will receive. However, traders were attacking the move as overdone, highlighting the fact that Eros is now lower than before the switch was first announced.

Steve Liechti of house broker Investec rushed to the company's defence, pointing out that there was no comment on its trading performance and saying he still expected it to meet expectations.

He added that Eros "appears keen to progress its US listing, in our view, when Facebook wake turbulence has subsided and markets move more to a positive frame of mind".

Over in the States, having come in for heavy criticism over its involvement in the social media giant's IPO, there was some much needed good news for Nasdaq. Wall Street's second-biggest exchange has managed to tempt Cadbury-owner Kraft Foods to switch its listing from rival NYSE.

Having rallied nearly 190 points over the past two days, the FTSE 100 ended the week on a downer as the top-tier index closed 12.71 points lower at 5,435.08. Poor export data from Germany didn't help while all eyes were on Spain – which had its credit rating downgraded by Fitch's late on Thursday – ahead of the weekend.

Having risen sharply earlier in the week on China's shock decision to cut interest rates, many of the commodity stocks were giving back some of their games. Vedanta Resources and Rio Tinto retreated 50p to 935.5p and 146p to 2,869p, although mid-tier digger Bumi shot up 38.9p, or 12 per cent, to 365p – just a bounce, said traders, following its recent torrid run.

Marks & Spencer – which revealed plans to launch 50 bank branches – slipped 5.3p to 335.2p after Investec's scribblers highlighted the fact its womenswear ranges have lost market share.

"Women are typically the main household shoppers and thus womenswear share movements can be leading indicators," they fretted.

A number of defensive stocks were rising, including drugs maker GlaxoSmithKline, up 14p at 1,444p, which extended its offer to buy US partner Human Genome Sciences.

Capita, 18p higher at 649.5p, took pole position after the outsourcer was chosen as the preferred partner for a £154m contract with West Sussex County Council.

Meanwhile, an upgrade from JP Morgan Cazenove to "overweight" helped BSkyB up 15p to 696p.

Lamprell took a battering on the FTSE 250. After the oil rig manufacturer late on Thursday released its second profits warning in three weeks, the stock slumped 24.2p to 84.5p yesterday, meaning it has now lost more than 75 per cent since May.

The announcement that WSP had agreed to be bought by Canada's Genivar for £278m, which saw the small-cap group jump 175p to 435p, helped lift the mood around its fellow support services companies. RPS and WS Atkins advanced 5p to 202p and 41p to 694.5p while Hyder Consulting finished 12p stronger at 362p.

Cable & Wireless Worldwide ticked up 0.45p to 35.38p as Orbis, its largest shareholder, said it was still unsure about whether to back the 38p-a-share approach from Vodafone (2.55p higher at 171.5p) for the telecommunications group.

Down on Aim, an upgrade to the oil and gas reserve estimates for its North Chapman Ranch project in Texas prompted explorer Range Resources to spurt up 1.34p to 8.7p.

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