Market update - 16 April

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The FTSE 100 was 29.4 points ahead at 3996.8 while the FTSE 250 advanced to 7199.3, up 89.2 points, at around 11.55am today.

Although firm, the market was off earlier highs, with the benchmark retreating after breaching the 4000-point mark as investors digested an earnings report from JP Morgan, the American banking giant which this morning said its first-quarter profit had fallen as it set aside more money against losses in its consumer banking divisions. Profits retreated to £2.1bn, compared to $2.4bn a last year, while revenue increased to $25bn, compared to $16.9bn in the same period in 2008.

The headline figures, although ahead of analyst estimates, impacted American stock market futures, which turned lower amid concern about rising credit costs as the recession gathers pace.

Moving up

British banks behaved much like the market, remaining firm, but off earlier highs, as news of the results filtered through – Lloyds Banking Group, for example, was 7.7 per cent or 6.5p ahead at 90.6p, well clear of a morning high of 93p, while Royal Bank of Scotland, which touched a high of 29.9p, was up 1.4p at 29.1p.

Elsewhere, Fresnillo, the silver miner which posted an upbeat update in the previous session, rose to 461.25p, up 3.3 per cent or 14.5p, after Merrill Lynch moved the stock to “buy” from “neutral”.

ICAP, the blue-chip inter-dealer broker (IDB), was 3.5 per cent or 13p higher at 388p thanks to Evolution Securities, which upped its target price for the stock to 385p from 290p in a new sector review.

“Amongst the IDB’s, we prefer ICAP, believing its industry leading position, product diversity and post-trade exposure position it well to be a long term winner,” the broker said, “Also, there is currently a gap between initial management comments on [the outlook for 2010] and consensus, which could result in upgrades post the 2009 results.”

Moving down

Bunzl tumbled to the bottom of the FTSE 100, losing 10.1 per cent or 54.2p to 483.75p after disappointing the market with its interim management statement.

Commercial property issues were unsettled, with Liberty International sliding by almost 4 per cent or 18.75p to 455p, after Morgan Stanley warned that it was too early to turn positive on the sector.

“Our reasoning is dictated by the UK market, where we estimate institutional grade property values are set to fall around25 per cent from December 2008 levels as the correction to the date, albeit precipitous, has been due to demand effects – we have yet to see pressure on property values from distressed sales,” the broker said,

“Our strong belief that pan-European quoted and UK direct property markets broadly peak and trough together underlines our view that it is too early to turn positive on the quoted sector.”