Market Report: Sky falls - HSBC thinks the current price is too optimistic

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The Independent Online

Sky was the worst performer on the Footsie yesterday, after HSBC warned that securing Premier League rights could be more trouble than anticipated.

The bank thinks Sky's current price is too optimistic, with share-holders overlooking the risks around the next football rights auction, likely to be within a year. HSBC says BT's investment in its sports channel means the future bid will either result in even split between BT and Sky, or BT winning a larger share. The first scenario would force Sky to spend more than ever on football, pushing up costs; the second would erode its ability to raise subscription charges.

Sky fell 27p to 892.5p.

Sentiment on the top-flight index was subdued yesterday, after a weaker than expected stimulus package from resources hungry China. Miners knocked 4.57 points off the FTSE 100, which closed down 9.90 points at 6,649.14.

Tullow Oil managed to make gains after a positive note from UBS, which said it was "acquirable at an attractive price while the cycle is not currently in its favour". Tullow pumped up 47p to 800p.

Fellow African oil and gas explorer Bowleven was on the end of a big sell-off, with volumes around four times higher than this week's average. Bowleven rose 0.5p to 30p.

Oven cleaner and soap-maker McBride fell to a five-year low after revealing a drop in sales and warning on profits. The small-cap firm fell 9.75p to 95.75p, a level not seen since 2009.

LZYE became the second Chinese firm in two days to propose delisting from AIM. It follows Rare Earths Global, which proposed its cancellation on Wednesday.

LZYE, which runs educational clubs for kids in Hong Kong, had frozen activities while talking about a "strategic partnership" with a Chinese company, but yesterday admitted that the talks were unlikely to conclude any time soon. LZYE fell 0.55p to 0.22p.

ITM Power charged up 5p to 33.62p after signing a £2.8m contract with the Mayor's office to supply three hydrogen refuelling stations in London.

Cairn Energy is still being investigated by the Indian tax authorities. It dropped 0.2p to 166.8p.