Market Report: Risk-averse clients glad of a guide on stocks to avoid

 

How about this for a sign of the times: while many brokers have
already released their top buy recommendations for 2012, Panmure
Gordon decided yesterday to do something a little different and
publish a list of its least-favourite stocks. A rather unusual
move, the firm's "top sells" list for the year came in the wake of
increased demand from clients who wanted to know what they should
avoid amid the current market uncertainty.

Some of those chosen were hardly a surprise, with Argos-owner Home Retail and online grocer Ocado – both of whom have few friends in the Square Mile – making the cut. They were pegged back 5.55p to 86.65p and 2.05p to 56p, while plumbing giant Wolseley was 39p lower at 2,080p after also being picked out.

Perhaps more surprising was Shire's presence. The pharma group was the top-performing blue-chip stock in 2011, but Panmure's analyst Savvas Neophytou claimed it was now overvalued, although it still firmed up 20p to 2,170p.

Ironically, one stock investors would have benefited from giving a miss recently is Panmure itself. With the broking sector having been hit by the volatility of the markets, the firm has lost over two-thirds of its share price during the past 12 months. Yesterday, however, it was on the up, shifting 0.38p higher to 0.62p in the wake of reports over the weekend claiming it could be a target for rival Cenkos Securities.

Despite a bright start, the FTSE 100 ended at its lowest level for the year so far, retreating 37.42 points to 5,612.26.

With talk Greek debt holders may have to take a bigger haircut than previously thought, traders were unimpressed by yet another meeting between Angela Merkel and Nicolas Sarkozy on the eurozone crisis, instead preferring to focus on German bonds being sold at a negative yield.

"Merkozy" did continue to talk up the so-called "Tobin" tax on financial transactions, and despite David Cameron's reiterating his opposition over the weekend, the banks were among the main losers. Lloyds slipped back 0.92p to 26.19p on boss Antonio Horta-Osorio's first day back from sick leave, while Royal Bank of Scotland slumped 0.44p to 20.07p.

Power firm Essar Energy (down 8.7p to 162p – a new all-time low) and hedge fund Man Group (down 5.4p to 107.35p) took the bottom two positions, as both extended their recent terrible runs.

Elsewhere, GlaxoSmithKline declined 62p to 1,435p after disappointing data from its lung drug Relovair, although it will still attempt to get approval later in the year.

Rival AstraZeneca was feeling a little foolish after admitting it had accidentally sent out confidential data to analysts last week in an email.

The drugs giant quickly moved to limit the damage, claiming that the numbers were "out-of-date planning information" and reiterating both its guidance for 2011 and outlook, although it still tumbled 33.5p to 3,009p.

At the other end, Burberry was in fashion again, bumping up 28p to 1,278p as market gossips returned once more to the well-worn idea it could attract a suitor, although dealers were unimpressed by the vague speculation.

The Kurdistan oil explorers were still in focus, with Heritage Oil falling 11.1p to 182.4p on the FTSE 250. RBC analyst Al Stanton downgraded his rating to "underperform", blaming his caution over the semi-autonomous region of Iraq on the worsening unrest in the country.

Gulf Keystone Petroleum, however, ticked up 8.6 per cent to 221p on AIM following an update on its search for oil as vague takeover rumours around the retail punters' favourite refused to die.

Back on the main market, Tesco was 0.45p weaker at 390.43p ahead of its trading statement on Thursday as Morrisons (up 0.2p to 311.5p) failed to get the supermarkets' reporting season off to a good start. Sainsbury's is set to update the market on its performance over Christmas tomorrow, and it advanced 1.2p to 300p.

JD Sports was in pole position on the mid-tier index after rising 40p to 700p. The sportwear chain announced it was in "advanced discussions" over buying a number of assets from troubled Blacks, although Seymour Pierce was not keen, warning its management "may be... overstretching themselves".

AGI Therapeutics was looking rather healthy down on AIM, rising 60 per cent to 7.2p after the pharma firm announced it had agreed to be bought by Aravis for €6.6m (£5.4m). Still, long-time punters will hardly be ecstatic considering AGI was worth €85m when it floated in 2006.

Espirito Santo was urging caution over reports suggesting Sony and Microsoft could soon reveal their next game consoles, saying that although such news would give a boost to retailer Game – which was 0.15p worse off at 6.75p – it was "too early to get excited yet".

FTSE 100 Risers

* National Grid 624p (up 14.5p, 2.38 per cent) After three straight sessions on the slide, power supplier ends up in pole position on the blue-chip index as its employees buy nearly 46,000 shares.

* InterContinental Hotels 1,195p (up 21p, 1.79 per cent) Deutsche Bank helps hotel operator by raising its recommendation to "buy" from "hold" on hopes a special dividend could be announced next month.

FTSE 100 Fallers

* Schroders 1,256p (down 39p, 3.04 per cent) Asset manager retreats in the wake of Singer Capital Markets cutting its price target to 1,450p from 1,550p, although broker keeps its "buy" advice.

* Antofagasta 1,234p (down 36p, 2.83 per cent) Chilean miner finishes as one of the Footsie's worst performers after Citigroup cuts its recommendation to "sell" and predicts copper volume growth will slow.

FTSE 250 Risers

* Persimmon 506.5p (up 25.5p, 5.3 per cent) Housebuilder jumps in the wake of a bullish statement in which it predicts underlying full-year pretax profit will have increased by 50 per cent.

* EnQuest 106.8p (up 2.8p, 2.69 per cent) North Sea oil explorer rises on news that it has bought 20 per cent stake in Kraken discovery off the Shetland Islands for a sum that could rise to $90m (£58.3m).

FTSE 250 Fallers

* Jupiter Fund Management 188.5p (down 7.5p, 3.83 per cent) Asset manager finishes in the red for the fourth consecutive session, over which time its share price has shed more than 14 per cent.

* Mitchells & Butlers 245p (down 4.8p, 1.92 per cent) Investors choose to bank profits in pubs company in the wake of it being helped last week by analysts returning to the idea of a potential new bid from Joe Lewis.

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