It was a bad day for the bookies after Ladbrokes issued a disappointing trading statement this morning.
The company said gross winnings for the 10 months to the end of October rose 8%, but this compares with a 12% rise in the first six months which Ladbrokes reported in August.
Part of the problem was with the Champions League football matches played on October 17 and 18, when 14 out of the 16 matches were won by the favourites. In racing, Newmarket, Aintree and Cheltenham were all poor for the bookies, said dealers.
Ladbrokes also pointed to rising costs, with operating expenses rising 10% in its online gaming business. But there was little more detail about its online plans, nor did the company comment on 888.com, where it has been in early talks about a deal.
The trading news left Ladbrokes 19p lower at 396p and had a knock-on effect on William Hill, down 13p to 643p.
Shore Capital downgraded its recommendation from buy to hold, while Mark Brumby of Oriel Securities said, "We consider this to be a disappointing statement. Retail and, particularly, telephone betting have been weaker that we would have hoped and our profit forecasts will be coming down by something in the region of £25m.
"William Hill has previously said it did not consider it necessary to make a trading statement. That would suggest the group is performing in line with its expectations. This morning's statement from Ladbrokes could prompt a comment from William Hill to that effect."
Overall though the market was heading in the right direction again, with the FTSE 100 index up 25.1 points to 6254.9 and the FTSE 250 32.8 points higher at 10830.0.
An opening rise on Wall Street also helped after US consumer prices fell by more than 0.5% in October, mainly due to lower energy costs.
"The drop in consumer prices is well overdue and will be a relief to the markets," said Martin Slane, head of spread betting at GFT Global Markets.
"After rising eight months in a row we are finally seeing some evidence that inflation is being tamed. The risk of an upside surprise in the core inflation figure was proving a restraint to stocks so this figure could well prove a catalyst for further record highs, with strong hopes that the Federal Reserve will be able to move to a neutral bias early 2007. Assuming this isn't a blip, this should give the Fed some room to manoeuvre if the economy slows down too quickly."
Back on this side of the pond, National Grid put a spark into its shares after unveiling better than expected first-half profits of £872m, up 12%, and announcing it planned to demerge its wireless infrastructure business and return $1.9bn to shareholders. In the wake of the figures analysts at WestLB raised their recommendation from hold to add and their price target from 690p to 750p. Its shares added 47.5p to 746.5p.
But results from Indian mining group Vedanta had the opposite effect, with its shares losing 98p to 1288p. First-half earnings were sound, up nearly four times, but investors were unnerved by plans from Vedanta's majority-owned subsidiary Sterlite Industries to issue $2bn worth of American Depository Receipts to fund a major push into India's energy market.
A trading statement from publishing giant Reed Elsevier also disappointed. The company said its education business would not reach its growth target for the second year in a row, and its shares fell 27p 573.5p.
Panmure Gordon advised holding the shares. It said: "Overall we do not expect to make material headline forecast changes. However the market was pricing in upgrades, in our view."
The London Stock Exchange fell back further as well, down 4p to 1230p on concerns about increasing competition after this week's announcement that a group of investment banks were setting up a rival trading platform. The market is also awaiting news on when 25% shareholder Nasdaq may make a move on the LSE.
British Energy was 16.5p weaker at 468.5p on nervousness ahead of tomorrow's results.
Children's clothing retailer Mothercare fell 17.25p to 370.75p despite first-half profits up 12% and a plan to cash in on the Borat effect by moving into Kazakhstan. It will also expand in Egypt and Belarus. Seymour Pierce said the shares are close to its 400p target, so the broker cut its rating from buy to outperform.
Kingfisher continued to suffer after two analysts downgraded yesterday, and hopes of a bid from US group Home Depot faded. The B&Q retailer lost 1.75p to 264.5p.
Fund management group Schroders was 9.5p lower at 996p after Citigroup cut from buy to hold due to slower earnings and uncertainty about its strategy.
It added: "We estimate Schroders currently has readily-available spare cash of around £420m, or 15% of its market capitalisation. The group will not return the cash to shareholders, but plans to make acquisitions.
"However, the current management has already had this spare cash for five years, without succeeding in closing a sizeable acquisition."
Project management group John Laing fell 18p to 402p after it agreed to accept a £950m offer from Henderson Infrastructure and rival Allianz said it would not raise its own bid.
But Northern Foods continued its recent recovery after this week's results, up another 7p to 100.75p after Credit Suisse gave the shares an outperform rating.
Power equipment hire group Aggreko climbed 19p to 404p, after an upbeat trading statement. The company said profit for the year would be at least £80m, compared to a forecast of £75m from Investec which reiterated its buy recommendation. Citigroup was also positive, increasing its price target for the company from 330p to 400p.
UK Coal added 8p to 406p as Bridgewell successfully placed 7.4m new shares at that price to raise £30m. The money will be used initially to reduce the company's debt.
Among the minnows, broadband business Plusnet added 1.75p to 207.75p as BT agreed to buy the company for £67m or 210p a share. Analysts said the news was positive for rival Pipex, with Dresdner Kleinwort setting a 13.10p price target on the shares on hopes it too may be bought. Pipex added was steady at 12.25p.
Intercede Group, which designs software for the management of ID cards, jumped 9p to 58.5p after winning a contract from a US government department.