Market Report: New boys provide hope of strong end to year

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The Independent Online

'Twas the night before Christmas and all through London, few traders were stirring. Yet despite the quiet day, hopes of a positive end to the year grew in the wake of a strong showing by the miners and a few of the market's new boys.

On its first day among the blue chips, Tui Travel became one of the premier risers. It was one of seven stocks to be promoted as part of last week's index reshuffle and ended 2.82 per cent higher at 292.25p. Another stepping up, and also in the same sector, was Thomas Cook, itself up 2p at 278p.

It may not have been all about gold, frankincense and myrrh, but rising metals prices helped spark a good day for the miners. Antofagasta was the pick, rising 3.57 per cent to 740p.

It was also a strong day for housing stocks. The sector has taken an almighty hammering this year, but a bit of the festive spirit softened sentiment towards it on Monday. Persimmon, a stock that has fallen almost 40 per cent in four months, closed top of the leaderboard, 4.05 per cent higher at 796p.

While the London market operated for only half a day, the volume of shares traded still came in underweight. Volumes hit 500 million, with the usual average day hits somewhere around 3 billion.

The banks looked stronger, led up by Barclays, 2.38 per cent stronger at 516.5p. This came on the day that reports in India said the UK banking giant was planning to set up a business process outsourcing unit in the country. Standard Chartered also edged up, rising 25p to 1,860p as it revealed that the Singapore investment group Temasek had lifted its holding in the financial group from 17 per cent to 18 per cent.

The defence group BAE Systems looked strong as it announced it had bought the military support services group MTC Technologies for $448m. Investors reacted well to the group's latest drive into the US market, sending the stock up 4p to 494p.

There were few big fallers on the top tier, but it was another of the new boys that propped up the table. Admiral Group was by far the weakest on debut, down 3.27 per cent to 1,095p. Otherwise, the power companies weren't looking great. British Energy Group was the worst, down 1.52 per cent to 488p. Compass Group had also lost direction, retreating 1.32 per cent to 318p.

On the mid tier, the soaraway riser was UK Coal, which stoked up 17.65 per cent to 450p. The gains came on the back of reports that Austria's Meinl International Power had bid for the group. UK Coal released a statement on Monday morning saying that while it receives preliminary expressions of interest from third parties "from time to time" no discussions were anticipated in relation to Meinl International. The reports linked the Austrian group with a bid for 100 per cent of its coal business and power generation division.

The funeral services group Dignity was looking perky as it rose up the second flight on its first day after promotion from the small caps. The group climbed 3.94 per cent to 739p.

One company that was looking more dead and buried was Carpetright after its founder, Lord Harris of Peckham, failed to come up with a takeover bid. The consortium headed by Lord Harris revealed on Friday that it had been unable to make a bid stack up given the current credit conditions, and pulled out. The market hit it on Friday evening, before hammering it even more on Monday. It ended the day bottom of the second tier fallers, down 5.8 per cent at 829.5p.

Southern Cross Healthcare, the care homes group, was another faller, down 5.5 per cent to 546p. This came on the day it said it had completed the divestment of its freehold interest in four care homes for 22m. Top of the small caps was Sagentia Group, a technology consulting company. It announced on Monday that TurfTrax, a business in which it owns an 8.8 per cent stake, is set to list on AIM. It closed up 31.5 per cent at 2.63p.

Also up was Alphameric after its struggling joint venture, TurfTV, landed a contract with Gala Coral. The deal, which will see the channel in more than 1,500 betting shops, sent the stock up 25.8 per cent to 28p.

It was a strong first day of dealing for Hertford International Group. The money remittance group raised 20m in a placing at 20p, and by the end of the day was up 18 per cent to 23.5p.

Among the worst performers on the small caps was tiddler IMS Maxims. The healthcare tech group was down 14.29 per cent to 0.75p after revealing on Friday that interim pre-tax profits had dropped from 163,000 to 16,000.

Another company hit by interims was Strathdon Investment. It was a pretty disastrous Christmas Eve for the group as it announ-ced widening losses in the first half, a lower net asset value and that the chairman was to step down. It closed 8 per cent lower at 11.5p.

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