Market Report: Morgan Stanley claim Mike Ashley's propensity to wade into sticky situations knocks 20% off Sports Direct's value

Without Mike Ashley there’d be no Sports Direct – but just how much does he cost the company? Morgan Stanley thinks it has the answer.

The investment bank says Mr Ashley’s fondness for complex bets on businesses such as Debenhams and propensity to wade into sticky situations such as the one currently engulfing Rangers Football Club knocks 20 per cent off Sports Direct’s value – a discount for risk. That works out at around £1bn by Morgan Stanley’s calculations. Still, the prospect of the budget sports chain conquering Europe means it’s worth a punt, with Germany and the Netherlands key targets for Sports Direct, which rose 11.5p to 620.5p.

Elsewhere Morgan Stanley’s thoughts on the banking sector proved influential, sending Barclays climbing 6.7p to 249.3p and Standard Chartered falling 11.5p to 1,082p as it named the pair among its top and bottom picks in Europe.

News of B&Q store closures announced earlier in the week by owner Kingfisher was thought by traders to be a prudent move. But analysts weren’t as convinced. HSBC yesterday downgraded the DIY company, while Nomura trimmed its target price, saying more details of its turnaround plan are needed. Kingfisher slipped 12.6p to 368p.

Delays in Iranian nuclear talks led to a gold and oil prices spike, with miners and producers benefiting. Randgold Resources climbed 108p to 4,801p; Fresnillo put on 17.5p to 700p; and BG Group improved 22.4p to 851.4p. The FTSE 100 rose 36.46 points to 6,809.5.

Insurance software specialist Innovation Group tumbled 4p to 24.25p as it admitted that despite selling £4m-worth of contracts forecasts are unchanged, with gains offset by contract delays.

Innovation was the brainchild of Rob Terry and another of his businesses was in the news. Quindell, which he founded but was forced to leave last year, was red-faced after admitting it misprinted the profit of the legal business it is selling to Slater & Gordon. The figure was undershot by more than £15m in two instances. Quindell slipped 0.25p to 134.75p.