Market Report: Spain sinks the banks, but US offers a lifeboat

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The Independent Online

The blue-chip index just missed out on registering a fifth consecutive day of rises, as talk about Autonomy being a takeover target made a return.

The software company benefited from the reheating of an old favourite after market gossips speculated that Microsoft was considering a bid for the group. With a price mentioned of 3,000p-a-share, Autonomy made 68p to finish on 1,475p.

However, as traders noted, it was by no means the first time that chatter has linked the two, with the samerumour appearing last month.

Overall, the FTSE 100 edged down 9.03 points to 5,882.18, yet early in the day it looked as if things were going to end up much worse, with initial trading seeing it drop as low as 5,858.81.Investors were spooked by the prospect of Spain's credit rating being downgraded by Moody's, after it said the country was under review.

As expected, the news hit the banks the worst, and Barclays ended up taking the wooden spoon, dipping 10p to 262p. HSBC and Royal Bank of Scotland were also badly damaged, down 10.6p to 661.1p and 0.58p to 40.76p respectively.

By the bell things looked much better, thanks to positive data from the US as figures regarding inflation, industrial production and manufacturing in New York all impressed.

Capital Shopping Centres finished the day at the top of the index as – after rather a lot of back-and-forth – Simon Property made an offer of 425p-a-share for the company.

Simon, which owns just over 5 per cent of CSC, has openly opposed its planned purchase of Manchester's Trafford Centre. That deal would see the Trafford Centre's owner, Peel Group, take a stake in CSC of getting on for 20 per cent.

Matrix guessed that Simon's move "was its only real chance to prevent the deal with Peel and CSC... succeeding", and it looked as if it may have worked, at least for now. CSC – which shot up 19.3p to 415.6p – announced that it was rejecting the bid but delaying the vote on the Trafford Centre acquisition.

Whitbread was in last place on Tuesday in the wake of its trading update, but fared much better yesterday asanalysts lined up to support the owner of Costa Coffee and Premier Inn. It was lifted 34p to 1,774p after Nomura raised its target price to 2,180p while Evolution Securities said that "the future remains bright".

Another high climber was the beverage can manufacturer Rexam, following reports that the group is thinking about selling its closures business. It jumped up 11.7p to 322.6p, with Bank of America Merrill Lynch saying it would welcome such a move.

Meanwhile, the takeover rumours around Scottish & Southern Energy refused to die. The energy supplier was bumped up 16p to 1,166p, with Eon the latest company mentioned.

At the opposite end, British Airways dropped 5.6p to 272.4p after Tuesday's news that it could be facing further strikes from its cabin crew. The dispute has so far cost BA £150m, and management will find out whether they will have to cope with further action when trade union members are balloted next week.

On the FTSE 250, the clothing retailer SuperGroup plummeted 178p to 1,450p despite releasing first-half figures that were mainly in line with forecasts. The owner of the SuperDry brand said profits had risen nearly 70 per cent and added initial Christmas trading signs were "very encouraging", though it did warn of its gross margins potentially being harmed by an increase in raw material costs.

Given that the stock has risen sharply since its 500p starting price when floated in March, profit-taking was cited by some as a reason behind the fall. Analysts certainly did not think there was anything to worry about, as Prime Markets' Richard Curr called it the "IPO success story of 2010" and "a new rising star in serious growth mode".

Taking the gold medal position on the mid-tier index was Michael Page, which made 35.5p to 535.5p after being helped by a recommendation from Morgan Stanley. Elsewhere, Senior's trading update – in which the aerospace company said its adjusted pre-tax profit for the year would just beat forecasts – led it to climb 3.8p to 145p.

Ferrexpo's announcement of a €28.5m acquisition drove the iron ore miner up 13p to 385p, with analysts and the market reacting positively to the news that it is to take control of Helogistics Holdings. The inland waterway transportation company – which operates from ports in the Netherlands and Ukraine – "will secure Ferrexpo's ability to ship its products to existing and new European customers", according to Evolution's Charles Kernot.

On the Alternative Investment Market, Stellar Diamonds was sparkling following a drilling update from its Droujba pipe in south-east Guinea. The mining and exploration company said that three holes had been completed, and that it is awaiting results frommicrodiamond analysis of samples from the drill core, news which prompted it to advance 0.62p to 7.5p.

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