Market report: Wednesday close

By Mickey Clark for MailOnline
Updated: 12:02 EDT, 29 August 2007

Investors in ReneSola were relieved to hear that the share price bounced back this afternoon to close up 7p at 217p.

Shares of the Shanghai-based company, which makes wafers for solar panels out of old computers, had slumped by more than a quid since last week's profits warning and peaked at 639p in February.

When they floated last November, the shares were valued at 79p, and the company was boasting about a significant increase in production targets for 2007. Then, last week, came the shock news that things were not going according to plan. The group again downgraded its 2007 guidance of 150 megawatts of production output to between 120 and 125 megawatts.

It blamed delays in deliveries of crucibles for its new furnaces, which have put back the start date for multi-crystalline production. This is now expected to make a big dent in full-year numbers. The characters pushing the shares on the way up have been noticeable by their absence on the way down.

Shares generally staged an impressive 77-point turnaround, clawing back early losses that had been generated by another nervy overnight performance on Wall Street, where the Dow lost more then 2% of its value.

The FTSE 100 index, which had been down almost 46 points at one stage, rallied strongly to close up 30 points at 6132.2. Turnover remained low, which might go some way to explaining how the market could turn on a sixpence in such a short space of time.

The US Federal Reserve had warned overnight that the slump in the American housing market was set to get worse, with a knock-on effect for the rest of the economy. The Fed made no mention of a move to cut interest rates.

In London, Whitbread led the way higher, putting on 54p to 1612p despite delaying a big cash return to shareholders. Deutsche Bank has subsequently raised its earnings forecast by 10% for the current year and by 6% for 2008.

Mining giant Antofagasta traded 8½p dearer at 692p. Its results were in line with expectations although the group warned of a drop in copper production.

ISoft dipped 3p to 68½p after CompuGroup warned it would not increase its cash offer of 66p a share. It said it would only raise the terms if another bidder were to emerge, other than the 69p-a-share offer already on the table from Australian outfit IBA Health. ISoft has now said it will back IBA's terms.

Goldman Sachs has raised its target price for Intertek, 12½p better at 957p, from 870p to 1027p after a review of the European business services sector. The broker remains lukewarm on Intertek, and sees better value elsewhere in the sector.

Petrofac, 9½p better at 423¼p, has exchanged its 29% interest in North Sea block 9/28a, which contains the Crawford field, for an additional 3.11% of block 211/18a with Valiant Petroleum. The oil and gas facilities service provider now holds 43.11% of the block, which contains 64.25% of the West Don field. Petrofac has concluded a deal with the owners of the adjacent block that will give it a further 27.7% stake in West Don.

TAKING STOCK: Sectors at a glance

Banking & finance
Cheyne Finance, a £3.3bn investment vehicle of Cheyne Capital, was today working on recapitalising and said it had raised enough for the next few months. Yesterday it said it faced a possible wind-down due to crisis in credit.

Building & property
Aussie property group Westfield reported a fall in interim net profit, but raised operating income by 7.5% and said its A$17bn (£7bn) development programme, which includes the White City shopping centre, would boost profits.

Consumer
Samedaybooks.co.uk has pulled its £500,000 bid for some assets of online bookseller Country Bookshop, announced on 23 July. Both companies have decided the deal would not maximise shareholder value for either company.

Economy
The forest fires sweeping through Greece will wipemore than 0.6% off the country's gross domestic product, the Greek government said today. Deputy Finance Minister Christos Folias said it was too early to put a final figure on the impact on the budget deficit.

Engineering
Volvo chief executive Leif Johansson today predicted the car market in North America would improve towards the end of the year. He added that Volvo sales had not yet seen any impact from the stock and credit market turmoil.

Health
Dutch regulators have approved AstraZeneca's once-a-day schizophrenia drug, Seroquel. It is Astra's second-biggest drug with global sales of $3.4bn (£1.7bn) last year. Seroquel was approved by US regulators in May.

Industrials
Profits at India's Tata Steel surged more than sixfold in theApril-June quarter, thanks to its takeover in January ofCorus, the former British Steel. Post-tax profits rose to 63.88bn rupees (£773m) from 10.1bn rupees a year earlier.

Leisure
Brewer and pub manager Greene King has been downgraded by Numis from add to hold ahead of next week's AGM trading update. The broker remains positive but expects the shares to demonstrate weakness short-term because of tough trading conditions.

Media
Yorkshire Post and Scotsman owner Johnston Press said print advertising could see growth in the second half after two years of gloom. Printbased ad revenues, down 9.2% in the first half of 2006, fell 2.9% in the first half this year and 0.2% in July.

Natural resources
Batiss Investments has bought a further 630,000 shares in Xstrata at an average of 2900.56p each, through the equity capital management programme. This raises its stake to 6.18m shares, worth £179m, or less than 1% of the miner.

Retail
Exane BNP Paribas has raised Kesa Electricals from neutral to outperformbut cut its target from 362p to 348p. The broker says the UK retail sector's problems have hit Kesa but profitable operations in France can continue to grow.

Support services
ABN Amro has raised Wood Group from add to buy on the back of yesterday's 64% jump in interim profits. The broker says that, with the oil industry services group taking on more higher-margin work, it considers the potential for growth to be significant.

Technology
Computer services group Logica CMG's shares tumbled today after it warned that first-half profit margins dropped because of a disappointing UK performance and a decline in France. First-half revenues grew 36% to £1.5bn.

Telecoms
Supermarket chain Lidl is to offer budget mobile phone rates in Germany from next week, bringing pressure on the likes of Deutsche Telekom and Vodafone. SIM cards will be €9.99 (£6.80), texts 9.9 cents and calls 9.9 cents per minute.

Transport
Discount airline Air Berlin today posted a 60% plunge in secondquarter profits. This was branded 'a disaster' by UniCredit's Uwe Weinreich, who sees the shares as a buy. The carrier blamed the slump on its price war with Ryanair.

Utilities
Standard & Poor's has lowered its long- and short-term credit ratings on gas and electricity utility National Grid to from A-1 and A to A-2 to A- respectively following its acquisition of KeySpan in the US for £3.7bn. It expects continued solid financial performance.