Market Report: Cantor Fitzgerald upgrade Royal Mail's rating to a 'buy'

George Osborne will raise another £1.5bn by selling the Government’s remaining 30 per cent stake in Royal Mail (E (EPA)

Number crunchers at Cantor Fitzgerald delivered a present to Royal Mail shareholders on its 500th birthday by upgrading their rating to a “buy”.

Analyst Robin Byde said: “We believe that the strengths and value of the company’s established networks and brands ... are under-appreciated.”

He thinks investors are also overly concerned about staff pay disputes, future pension costs and regulation.

The upgrade from “hold”, and rise in the target price to 530p, propelled the shares higher before profit-taking from nervy investors meant it ended just 0.2p higher at 437.2p.

Miners recovered from Tuesday’s beating, with Glencore up 2.99p at 88.26p, but it was Sainsbury’s failed bid for Argos owner Home Retail Group that stole the show. The supermarket was the biggest blue-chip loser, down 13.2p at 242.1p, as investors were sceptical about the benefits of the cash-and-shares deal, while the FTSE 250 listed Home Retail shot up 40.6p to 139.3p on hopes the move will spark a bidding war.

There was a mini-revival from the FTSE 100 after Tuesday’s battering and it ended up 43.81 points at 6,137.24.

Builders’ merchant Travis Perkins put on 56p to 1,992p after Credit Suisse gave it a bullish 2,255p target price based on “decent mid-term growth” for UK construction activity.

Investors sticking with struggling Royal Bank of Scotland will be rewarded with a dividend at the end of this year, according to the broker RBC Capital, which suggested that the bank would pass stress tests and return 10p a share to investors. It reckons that the lender, led by chief executive Ross McEwan, who is two years into a six-year turnaround plan, will be in a position to buy back two-thirds of the state’s stake shortly after.

RBS was 3.7p higher at 297.2p

On AIM, crowdsourcing specialist Blur Group – once a darling of AIM worth more than 800p a share – crashed to new lows, down 3.63p to just 13.13p. In September, Blur was forced to revise down revenues for 2013 after an inquiry by the Financial Reporting Council confirmed it had booked in contracts before their completion.