Shares attempted a comeback as nerves about the southern Europe's debt woes eased last night, but Wellstream was held back after losing out on a major contract in Brazil.
The oilfield services group, which specialises in flexible pipes and is listed on the FTSE 250, fell to a session low of 588p, down almost 10 per cent, before closing more than 7 per cent or 50.5p lower at 602p. Traders sold out on news that Wellstream's French rival, Technip, had beaten it to a contract to supply flexible pipes to the Brazilian oil giant Petrobras.
The deal, which will see Technip supply the Tupi field pilot project off the Brazilian coast, prompted a wave of profit-taking around Wellstream. Analysts at Oriel said the shares "had been anticipating good news – or a bid – and are too far ahead of events".
Evolution also weighed in, hinting that the lack of major contract awards so far this year could put forecasts at risk. Citing the raft of deal rumours that have driven up the share price in recent months, the broker lowered Wellstream's stock from "buy" to "add".
Overall, the benchmark FTSE 100 index gained 31.23 points to 5,617.84, while the FTSE 250 added 93.92 points to close at 10,392.96 as European and International Monetary Fund officials stepped up moves to devise a bailout plan that would save Greece from having to restructure its debt.
Overnight news from the US, where central bankers at the Federal Reserve pledged to hold back from raising interest rates, also drove sentiment as fears of an early move towards monetary tightening subsided.
Metals prices firmed up as Wednesday's worries took a back seat, with mining plays rising in tandem. Additional support was forthcoming from the copper miner Kazakhmys, which rose by 53p to 1,432p after posting a positive production update. Other notable risers in the heavily weighted sector included Lonmin, which closed up 40p at 1,943p, and Anglo American, which was 72.5p stronger at 2,880p at the close of play.
In a sign of the caution lurking just beneath the surface, gold prices continued to gain ground as investors kept piling into the safe-haven metal. The strength boosted Randgold Resources, which rose by 90p to 5,420p last night.
Elsewhere, the commercial property group Land Securities gained 13.5p to 656p after Panmure Gordon turned positive, labelling the stock an "attractive play" thanks to the recovery in the central London office market.
"There is growing tenant demand for new space [in the central London office market and in parts of the West End], coupled with a scarcity of new schemes scheduled for delivery in the next two years and this should translate into continued rental growth," the broker said. It expects Land Securities, a major landlord in the capital, to benefit from this trend.
Hammerson also did well, adding 7.9p to reach 386.2p after reporting improvements in its retail assets. Panmure Gordon, although pleased with the update, kept the stock at "hold", noting Hammerson's exposure to the French market, which has lagged behind the UK, and its lack of gearing to the central London office market. In the wider sector, British Land was 4p ahead at 469.4p, and Liberty International rose 6.8p to 493p.
Further afield, news that the annual percentage increase in house prices had hit double digits drove sentiment throughout the housing sector. Taylor Wimpey stood firm at 41.76p, a rise of 0.34p, and Barratt Developments was up 0.5p at 127.1p. The property website Rightmove led the way, swelling by 31p to 700p, partly because of the strength in house prices, and partly thanks to Panmure, which raised its target price for the stock from 650p to 800p.
Besides highlighting the improvement in market conditions, the broker played down the prospect of competition. "Site traffic remains very strong and there is no evidence of any diminution of market share," it said, repeating its "buy" view ahead of Rightmove's update next week.
"In our view, it is unwise at this level to factor in either the Digital Property Group or Google as any sort of meaningful industry threat."
Also on the upside, HSBC came out in support of Drax, the owner and operator of the Drax coal-fired power station near Selby, North Yorkshire. Its shares rose by 9p to 363.5p after the broker told clients to "buy", saying the market was only pricing in the negatives.
"The market's appraisal of Drax has tended to fluctuate unduly, usually based on short-term commodity price volatility. At times it has placed the value of Drax above that of a new-build but at other times it has valued the stock below the price at which its assets could be sold," the broker said, setting a 425p target price. "We believe the latter situation currently applies."
On the downside, Carpetright, which fell after disappointing the market with its year-end pre-close update on Wednesday, remained under pressure. It eased back by 1.5p to 858.5p after UBS scaled back its target for the stock to 750p, and Investec switched its stance to "sell".
"Short term trading risks prevail, as performance is typically subdued for three months after a general election," the analysts at Investec said, lowering their target price to 675p.
FTSE 100 Risers
Up: Intercontinental Hotels 1,136p (up 65p, 6.1 per cent) Rises after Lazard Capital initiates coverage with a "buy" stance.
Up: British Sky Broadcasting 625p (up 29p, 4.9 per cent) Third-quarter results evidence continued strength in HD demand.
Up: Eurasian Natural Resources Corporation 1,256p (up 55p, 4.6 per cent) Miners gain ground as commodity prices firm up.
FTSE 250 Risers
Up: Galiform 81.55p (up 4.05p, 5.2 per cent) Interim management statement pleases; Investec sticks to its top of the range pre-tax profit forecast.
Up: Yell 55.65p (up 1.65p, 3.1 per cent) Maintains place on the "most preferred" list of European media stocks at UBS.
Up: Croda International 990p (up 15p, 1.5 per cent) Target price raised to 1,170p at JP Morgan Cazenove, and to 1,100p at UBS.
FTSE 100 Fallers
Down: BP 584.2p (down 40.8p, 6.5 per cent) Slumps on news that the Gulf of Mexico oil spill is worse than initially thought.
Down: Whitbread 1,545p (down 38p, 2.4 per cent) Eases as traders bank profits on the back of well-received full-year figures.
Down: British American Tobacco 2,085p (down 22.5p, 1.1 per cent) Downgraded to "hold" from "buy" at S&P Equity Research.
FTSE 250 Fallers
Down: Gartmore 157.3p (down 6.7p, 4.1 per cent) Falls back as traders move to bank profits from Wednesday's strong gains.
Down: BBA Aviation 207p (down 4.7p, 2.2 per cent) Posts an interim management statement; cut to "hold" from "buy" at Panmure Gordon.
Down: Go-Ahead 1,446p (down 27p, 1.8 per cent) Posts an interim management statement; maintains full-year guidance.