Market update - 1 April

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The FTSE 100 was 29.2 points behind at 3896.9 while the FTSE 240 advanced to 6417.6, up 43.7 points, at around 11.50am today.

Leading equities came off the boil amid thin volumes and a touch of profit taking from last night’s run. Anglo American was the weakest, losing 44p to 1142p, as traders banked gains from the previous session.

Royal Dutch Shell led the oil issues lower, sliding by 68p to 1503p, with traders citing a large share placing by an unnamed broker.

Moving up

Retailers, buffeted by Marks & Spencer’s better than feared sales update, supplemented the previous sessions gains – Home Retail Group fared the best, rising by 12.75p to 237.5p, while Kingfisher, which was amongst the strongest of the blue chips last night, traded up by 4.9p to 154.6p.

The banks were firm, with Barclays, which this morning was again rumoured to be closing in on a deal to dispose of its iShares business to CVC Partners, edging up by 1.5p to 149.5p.

On the second tier, Punch Taverns, 20.5 per cent or 12p ahead at 70.5p, was said to be drawing stream from a round of short covering as the bear squeeze prompted by Enterprise Inns’ update persisted.

Debenhams rebounded, gaining 7.2 per cent or 3.5p to 51.5p as the effect of last night’s share placing wore off. HSBC had placed around 13 per cent of the retailer’s stock, clearing the stake previously held by Baugur, the collapsed Icelandic investor.

Moving down

BT retreated to 76.1p, down 2.1p, after Goldman Sachs switched its stance on the telecom group’s stock to “sell” from “neutral”.

“We expect BT to underperform the sector as the company might be forced to cut its second half 2009 and 2010 dividends to zero in order to shore up an overleveraged balance sheet and pay down a forecast £8bn (gross) pension liability, while simultaneously trying to fix likely deep and long-lasting challenges to profitability in [its] Global Services [division],” the broker said,

“BT screens as a structural laggard on our risk index, given low broadband market share in a competitive market, while economic risks are rising because of the company’s [more than] 60 per cent exposure to enterprises.”