Market Report: Microchip comments inject life into Arm

Its rapid rise may have stalled in recent months thanks to concerns over a slowdown in the semiconductor industry, but signs that the sector is about to turn the corner prompted Arm Holdings to jump yesterday.

The chip designer, which provides the technology behind Apple's iPads and iPhones, grabbed the benchmark index's top spot after a US peer described as the industry's "canary in the coal mine" claimed the cycle was set to bottom out.

Since reaching 651p last February, after a run in which its share price climbed more than 700 per cent in less than three years, Arm has failed to move higher. Last night, however, it came close, advancing 43p to 645p in the wake of encouraging comments from Microchip late on Thursday.

They were welcomed by Royal Bank of Scotland's Didier Scemama, who noted the Arizona-based group's prediction that the last quarter of the year would "mark the trough of the current cycle".

The analyst said Microchip was "often seen as the 'canary in the coal mine', having been first to see downturns and upturns in past cycles"He added that its comments were therefore "a bullish sign" that supported his "buy" advice for the sector.

Overall, however, it was a downbeat end to the week for the FTSE 100. There was little to cheer investors emerging from the G20 meeting in Cannes, and fears remained that the weekend could bring more bad news from Athens.

The closely watched non-farm payroll figures from the US did not particularly help, with just 80,000 new jobs being added in October. By the bell the top-tier index had fallen 18.48 points to 5,527.16.

Many of the miners managed to power up, however, including Antofagasta (up 21p to 1,211p) and Kazakhmys (up 15p to 951p). The latter was once again being linked in reheated rumours with a possible bid for Eurasian Natural Resources, which slipped down 1p to 675p even though the rumours also suggested that its main shareholders, as well as Glencore, could make an approach.

Also in the red was Anglo American, which edged back 18p to 2,338.5p after announcing it was increasing its stake in the diamond group De Beers to 85 per cent. The deal persuaded punters to rush for other precious metal miners, including Gem Diamonds, which soared up 14.1p to reach 220p.

In a remarkable coincidence, a year to the day that a Rolls-Royce engine exploded in a Qantas plane, the Australian airline was again forced to ground a plane because of engine problems. Last year, the malfunction prompted the engineering giant to drop almost 10 per cent in a mere two days, but this time it dipped a mere 1.5p to 714.5p after reassuring the market that the two events were not linked.

The wooden spoon ended up being taken by International Airlines Group after it nosedived 11.5p, or 6.83 per cent, to 156.9p. The British Airways-owner suffered after releasing its figures for the third-quarter, in which it admitted that its operating profit had slumped to €363m (£312m). It also announced that it had reached an agreement with Germany's Lufthansa to buy the UK budget carrier BMI.

Bad news from Hungary meant International Personal Finance (IPF) finished near the foot of the FTSE 250. The country's government published draft legislation to limit the APR on consumer loans. The proposals suggested a maximum of 24 per cent above the base rate, which is currently 6 per cent.

The average APR of the emerging markets doorstep lender's loans in Hungary – where it banked pre-tax profits in 2010 of £9.1m – is currently 65 per cent. Although some in the City noted that IPF still operates in some countries where a similar cap is in place, it still ended up slumping 13.7p to 225p.

Fears over its operations in Nigeria pegged Afren back 5.15p to 81.9p in the wake of reports seeming to claim that its stake in the country's OML 26 oil field was being passed on other companies. However, the energy group moved swiftly to rebuff the talk, saying its acquisition of the stake was still on course to be finalised by the end of the year.

Nonetheless, it retreated 5.15p to 819p. Canaccord Genuity did not help matters when it downgraded its rating to "sell" and claimed that the group would be "hard pressed" to meet its production target from its Ebok field in Nigeria.

Best of the Best struck it lucky on the Alternative Investment Market after the group, which runs competitions in airports giving away luxury cars, announced it was going to return nearly £1.2m to investors, prompting it to spurt up 77.14 per cent to 31p.

Meanwhile, down on the fledgling index, Record's admission that one of its largest customers, contributing £600,000 in pre-tax profits a year, had decided to end its contract caused the data management group to sink 2.38p to 21p.

FTSE 100 Risers

Wm Morrison 312.2p (up 5.1p, 1.66 per cent)

Supermarket left high up the leaderboard ahead of its third-quarter trading update next week, as Nomura predicts its like-for-like sales will have grown 2.1 per cent.

Royal Bank of Scotland 23.09p (up 0.29p, 1.27 per cent)

Bank enjoys a positive reaction to its latest results, despite announcing its underlying profit for the third-quarter has fallen 63 per cent to £267m.

FTSE 100 Fallers

Icap 350.4p (down 18p, 4.89 per cent)

Bankruptcy of MF Global continues to hit interdealer broker, which has fallen 19 per cent this week, despite low expected exposure to the US group.

Inmarsat 463.1p (down 16.4p, 3.42 per cent)

Satellite company is knocked back, having risen more than 7 per cent since announcing an 18 per cent jump in third-quarter earnings on Wednesday.

FTSE 250 Risers

Lancashire 740p (up 30p, 4.23 per cent)

Insurer climbs after its third quarter pre-tax profit of $79m comes in $18m ahead of analysts' expectations, while it also announces a $124m special dividend.

Shanks 115.3p (up 1.2p, 1.05 per cent)

Waste management group continues to rise in the wake of its interim results on Thursday, which saw it post a 20 per cent jump in its first-half pre-tax profits.

FTSE 250 Fallers

Millennium & Copthorne 419.3p (down 13.7p, 3.16 per cent)

Hotels group disappoints investors with a cautious outlook statement, despite its third-quarter pre-tax profit more than doubling.

Kentz 490.8p (down 13.2p, 2.62 per cent)

Engineer closes deep in the red even after it announces it has been awarded a contract for work in Papua New Guinea on LNG facilities in the country.

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