Market Report: Logica breathes easy after corporate spending boost

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Investors in Logica were breathing easy yesterday as promising signs of corporate spending in Europe appeared to put fears of an imminent profits warning to bed.

The IT outsourcer has been hit recently by bearish whispers it could be about to slash its forecasts, but yesterday it finished high up the mid-tier index after business software giant SAP released expectation-beating results.

Revealing sales figures well ahead of predictions, the German company claimed that – contrary to concerns of a slowdown – businesses were continuing to invest in information technology.

Although voices in the City said there wasn't a direct read-across between the two, they added that positive news from the software manufacturers was promising for Logica and its peers. In response, it was driven up 4.5p to 89.55p, with traders pointing out the group has also been helped by strong results earlier in the week from India's Infosys.

As finance ministers met in Paris to discuss the Eurozone sovereign debt crisis, the FTSE 100 jumped 62.98 points to 5,466.36, continuing a run that has seen it climb nearly 11 per cent over the last eight sessions. However, despite the benchmark index setting a new two-month record, City voices remained wary, citing the low trading volumes behind the rally.

With positive economic data from China showing a dip in inflation over September, the miners were also in for a positive session. Antofagasta shifted ahead 40p to 1,118p while Xstrata and Kazakhmys climbed 29.5p to 974.1p and 21.5p to 900p respectively.

Elsewhere in the sector, bid chatter continued to surround Ferrexpo, with gossips returning to vague rumours – which emerged last week – that the Ukranian iron ore producer's billionaire founder and 51 per cent stakeholder Kostyantin Zhevago could try to take it private.

UBS, however, was talking down the mid-cap miner's bid potential, saying it did "not see Ferrexpo as a takeover candidate". However, the broker's scribblers also helped it tick up 23p to 339p by upgrading their advice to "buy", saying they expect iron ore prices "to remain high on continued supply constraints from India".

Reheated takeover tales were also doing the rounds on the blue-chip index, where BG Group advanced 30.5p to 1,343.5p after rumours of a potential approach from the Far East reappeared. The latest tale, suggesting a possible price of 2,300p a share, saw Chinese state-owned energy company Sinopec as the newest name in the frame, with rumours also claiming it could band together with a buyer from the Middle East.

A further boost for the explorer came from reports that the chief executive of Brazilian oil group Petrobas has expressed an interest in taking a stake in BG's oil fields in the country if they come up for sale.

After closing at an eight-year low on Thursday, Man Group was left in pole position as the world's largest listed hedge fund manager bounced 7.6p to 157.6p.

Commodities giant Glencore International was left holding the wooden spoon, dipping 13.2p to 422.5p, in the wake of mutterings of a $175m convertible bond being placed by Goldman Sachs. Meanwhile, GlaxoSmithKline stayed steady at 1,378p after vague speculation the drugs maker could be about to make an acquisition.

Home Retail slumped to the foot of the FTSE 250, falling 6.8p to 124.6p ahead of its half-year results next Thursday. Noting that the City expects its pretax profits to drop 70 per cent, Panmure Gordon's Philip Dorgan said he was finding it "increasingly difficult to see a quick path to recovery" for the retailer's struggling Argos chain.

The return of vague takeover speculation lifted up 3.2p to 103.5p, although there was little detail on who was supposed to be taking a look at the price-comparison website. Bid talk also helped Misys, with Espirito Santo saying it "remains an acquisition target" in the wake of Fidelity National Information Services abandoning its takeover attempt back in August. Predicting a rush of takeover activity in the software sector, analysts from the broker also highlighted the attractiveness of Fidessa (up 30p to 1,630p), although they said Sage (up 4.1p to 278.8p) had "little scope ... to become an acquisition target".

Investors in Bowleven were celebrating after the explorer announced it had struck more oil and gas off the shore of Cameroon. The lure of black gold saw the company rocket up 45.5p, or 60.47 per cent, to 120.75p on the Alternative Investment Market, although Fox Davies sounded a note of caution, warning that "much more appraisal work is required"

Meanwhile, on the small-cap index Alterian was knocked back 11.01 per cent to 50.5p as a major reshuffle at the software company saw the resignation of four directors.

FTSE 100 Risers

Ashmore 327.8p (up 9.8p, 3.08 per cent)

Investment house rebounds after disappointing with its update on Thursday in which it revealed a 10.5 per cent drop in assets under management over previous quarter.

Unilever 2,109p (up 52p, 2.53 per cent)

Consumer goods giant advances thanks to positive reaction to €500m (£437m) deal to acquire the Russian cosmetics company Concern Kalina.

FTSE 100 Fallers

Lloyds Banking Group 33.25p (down 1.01p, 2.95 per cent)

Bank finishes as one of blue-chip index's major fallers following Standard & Poor's downgrade of Spain's credit rating, announced late on Thursday.

Kingfisher 259.5p (down 2.8p, 1.07 per cent)

B&Q-owner knocked by Oriel Securities cutting its recommendation to "reduce" from "hold", citing caution on sales growth in the UK.

FTSE 250 Risers

Jupiter 224.4p (up 18.6p, 9.04 per cent)

Fund manager climbs after attracting roughly £300m of new money over the last quarter, although its assets under management did end up dropping £2.5bn.

Hunting 643p (up 33p, 5.41 per cent)

Oil services company helped by Goldman Sachs initiating coverage with a "buy" rating, saying its recent "acquisitions have enhanced the group's presence in the US market".

FTSE 250 Fallers

Computacenter 365.4p (down 16.8p, 4.4 per cent)

IT company drops after revealing its third-quarter sales in the UK fell 15 per cent, although its overall revenue for the period climbed 5 per cent to £652m.

Ophir Energy 235p (down 0.7p, 0.3 per cent)

Oil and gas group, which on Thursday announced £118m, all-share deal to buy Dominion Petroleum, falls as HSBC cuts its target price to 290p from 301p.