Market report: Yesterday's trading

 

Miners dug the Footsie out of a hole yesterday. News of Freeport McMoran's stonking £13.7bn cash and shares offer for Phelps Dodge - a deal which will make Freeport the world's largest publicly traded copper producer - sparked heavy buying of the heavyweight sector on hopes of further consolidation.

The excitement helped London's premier index rally from 43.7 points down to finish 12.5 better at 6,204.5. Numis told clients the world's biggest-ever mining bid supports its view that many mining firms remain significantly undervalued on a fundamental view of the cash flow.

Anglo American, which recently hit the headlines when Chinese tycoon Larry Yung bought a 1% stake in the South African gold and diamond producer from the Oppenheimer family, retrieved an 18p loss to close 47p higher at 2445p. Rio Tinto jumped 63p to 2732p and last night was again mentioned as a possible merger partner for Anglo.

Antofagasta touched 493p and closed 18¾p higher at 476½p, while Kazakhmys ended 19p up at 1156p and Xstrata 41p ahead at 2195p. BHP Billiton, currently in talks with several buyers for its flagship Optimum SA coal mine, rose 12p to 972p.

Properties were popular with Hammerson leading the charge at 1484p, up 35p. It has sent a circular to shareholders explaining the board's decision to become a tax efficient Real Estate Investment Trust and has convened a special shareholder meeting for December 13.

British Land advanced 42p to 1604p in anticipation of today's interims and hoped for an 8% increase in net asset value to around 1609p a share.

European takeover gossip lifted insurer Legal & General 3½p more to 153½p. Resolution firmed 2p to 660p despite Swiss Re saying it has no intention of launching a bid for the company.

Turnover in Argos-to-Homebase DIY chain Home Retail more than doubled to 17.5m as punters pinned their hopes on a mega cash bid from private equity firms Blackstone and KKR. The close was 9½p up at 426p. Today's maiden interim figures are expected to reveal pre-tax profits of around £110m.

Extremely vague gossip of private equity interest helped fashion retailer Next climb 40p to 1936p. 'More like wishful thinking,' said one fund manager. Competition on the High Street remains cut-throat and the Christmas trading period will again be crucial to share price performance in the New Year.

Struggling broadcaster ITV shed 1¼p to 114½p as NTL's takeover hopes were destroyed by BSkyB's (4p off at 533p) audacious share raid on Friday. Sky's shock purchase of an 18% stake at 135p a share cost it a cool £940m. Without any bid premium, some say ITV stock is worth only 90p top whack.

The London Stock Exchange was the top FTSE 250 performer, soaring 73p to 1291p in response to 28% shareholder Nasdaq's £2.7bn bid. The LSE's board led by Clara Furse rejected the offer and Nasdaq's call for an immediate chinwag about the bid. Typical!

The LSE has effectively been 'in-play' since May 2000 so Furse & Co have therefore had six years to find their own solution, or bedfellow. But no, like Diana Ross, we're still waiting. Equity guru David Buick at spreadbetter Cantor said: 'The ramifications of dismissing Nasdaq's overtures could be serious.'

Meanwhile, Michael Spencer's Icap, which held tentative merger talks with the LSE in the summer before walking away, firmed 4p to 486½p.

London Scottish Bank lost an early 6¼p gain to finish 1p cheaper at 116p. Cattles Holdings confirmed it is in talks with LSB over a possible recommended share exchange offer although it is unlikely to make a move until after LSB's results are announced in January 2007.

Ariana Resources firmed 1p to 11½p after bullish initial drilling results from its Kiziltepe gold prospect in Turkey.

Profit-taking following the interim figures left pig farmer Cranswick 24½p off at 839½p. Profits were a shade above expectations at £15.2m, up 12½%, before property profits of £300,000.

The shock departure of chief executive Stuart Graham and profits alert at its linen business put shares of Johnson Services through the ringer and the close was 35½p down at 393p.

The laundry and work-wear supply company put its drycleaning unit up for sale in July but has decided to keep it after failing to receive any worthwhile offer.

• News that its services division had failed to win a sizeable contract dragged Supporta 5p down to 75p. The interim message was otherwise bullish, with both care and property services remaining in the best of health.

New care boss Bernadette Walsh is making waves and has won some new contracts. The forward order book is £85.2m - some 60% up on last year. Investec forecasts a full-year profit of £1.9m, rising to £3.4m in 2007 and says buy.