Market report: Wednesday close

By Mickey Clark for MailOnline
Updated: 12:07 EDT, 28 March 2007

Insurance broker Catlin, which bought rival Wellington Underwriting earlier this year for £591m. slipped below 500p today after one big seller dumped £69m worth of stock.

The price fell 18¾p to 493½p as Goldman Sachs picked up 13.75m shares, or 5.5% of the company, as a late principle trade at 500p. It then tried to place them with various institutions at a higher price.

One block of 2.1m shares went through on the ticker at 501p and another of 2.3m at 500p. The seller is reckoned to be US private equity outfit Cypress. Catlin, which came to market three years ago, is currently valued at around £1.2bn.

Shares generally drifted lower on lack of support with fresh falls on Wall Street this afternoon adding to investors' woes. The Dow lost 57.10 to 12,340.20 as it stretched its losing streak to three days. The FTSE 100 index closed down 25.4 to 6267.2.

Next led blue-chips higher for the second day in a row with a jump of 51p to 2353p. Talk of a leveraged offer at 2500p a share persists. There is also evidence that stock market bears, who were caught out by last week's betterthanexpected full-year numbers are still trying to cover their open positions.

Retail analyst Richard Ratner at broker Seymour Pierce confesses: 'We don't know whether the story of a takeover is true or not, but on fundamentals, it continues at outperform.'

He points out that Next has only £70m of freehold property on its books, and is not an obvious choice for a leveraged buyout. The pension deficit is just £47m and debts of £444m are comfortably covered by the securitisation of the Directory debtors book. Another broker, Exane, says even if the share price reaches 2700p, it will still be underperforming others in the sector.

A big rise in the oil price overnight lifted BP, 8½p to 552p, Royal Dutch Shell, 14p to 1694p, and BG Group, 7½p to 731p, making them among the best blue-chip performers. The growing tension between Iran and the West saw crude prices spike $5 overnight in the US. In London, Brent crude was up $1.59 a barrel to $66.19, its highest since September.

Plumbing equipment supplier Wolseley was again on the slide. It lost 20p to 1197p, reflecting its exposure to the worsening US housing market. The slump in new starts and falling house prices has dragged the market to its lowest level in seven years.

Trains and buses operator First Group says it enjoyed a strong trading performance last year, despite having to absorb a big increase in fuel costs. Results should be in line with management expectations. The company has been shortlisted for a further three rail franchises - InterCity East Coast, New Cross Country and East Midlands - worth an additional £1bn of revenue a year. The shares rose 10p to 667½p.

Soft furnishings retailer Laura Ashley firmed 1¼p to 29p after posting doubled pre-tax profits of £12.2m as sales rose 6.6% to £225m. The company says it looks to the future with 'full confidence' and has declared a final dividend of 0.5p, doubling its full year payout to 1p. Like-for-like sales for the eight weeks to 24 March fell 4.8% but total retail sales grew 8.4%.

It was the first day of trading on Aim for cross-border financial services provider STM, following a placing of 15m shares at 50p, which values the company at £17.6m. The price opened at 52½p, before touching 57p.

A near-doubling of pre-tax profits to £12.68m last year, and some bullish comments about current trading prospects, gave a boost to shares of Vislink, the maker of microwave and satellite video and data links.

They rose 2¼p to 90¾p. Chairman Bob Morton says the order book stands at £34.7m and the group is now on the lookout for acquisitions.