Market report: Monday close

By Mickey Clark for MailOnline
Updated: 12:10 EDT, 10 December 2007

Another day in the City and yet more fallout from the credit crunch for stock-market investors to cope with. This time comes news of losses running intobns of dollars at Swiss bank UBS stemming from the subprime mortgage meltdown.

The news certainly put a damper on share trading today and took the edge of last week's useful rally. The FTSE 100 index fell more than 30 points before paring back to close up 10.4 at 6565.40. Even so, selling pressure was described as light. Fortunately, the news made little impression on the UK's quoted High Street banks, which have already been forced to make some write-offs.

Lloyds TSB rose 16½p to 504p in the wake of its trading update. Citigroup has repeated its buy rating on the shares and Collins Stewart says the update should help to re-assure investors. It reckons the strong trend has continued into the second half and maintains a hold rating and 604p target.

Royal Bank of Scotland rose 6½p to 490p. Goldman Sachs says last week's £1.3bn writedowns were lower than expected and that market concerns remain. It has raised its target from 601p to 614p.

Yellow Pages publisher Yell led blue-chips higher with a rise of 23½p to 419¾p as more than 5m shares changed hands. Merrill Lynch has repeated its buy rating and 520p target following Friday's investor day. The broker said there was little in the way of fresh news, but the company had allayed City fears about a bearish trading update.

Satellite broadcaster BSkyB firmed 7p to 608p. It faces competition from US cable sports network ESPN when offers for the next round of Premier League television rights come up from grabs in 2009.

Disney-owned ESPN says it is interested in acquiring the rights as part of its international expansion programme. Last year BSkyB paid £1.3bn for the largest of the packages of live games as part of a three-year deal.

Autonomy jumped 37p to 838½p on further reflection about last week's licensing agreement with Cox Communications. Cox is a multi-service broadband and entertainment specialist with sixm residential and commercial customers. Seymour Pierce has repeated its buy rating on Autonomy and 1038p target.

A four-year contract to supply EDF's giant power stations at Cottam and West Burton with coal, at approaching current market prices, is set to save 500 miners' jobs at Thoresby, Nottinghamshire, which was due to close next year.

For investors in Thoresby's owner UK Coal - the quoted rump of the old state-owned British Coal - that means £55m can be spent on accessing new, deeper coalfields and increasing reserves by 12m tonnes. After their recent drift downwards-UK Coal shares resurfaced on the news, up 19½p at 416½p.

Oxford BioMedica remained unchanged at 22p with phase three trial for its TroVax renal cancer product set to continue without modification after an independent review concluded there were no safety or efficacy issues. The speciality biotech company expects the trial to report in 2009, with the enrolment of 700 patients - there are currently 500 in the trial - to be completed next year.

Seymour Pierce reckons there is a 50% possibility of success for the trial, but rates the shares a buy because of their 40% discount to fair value. Rival Investec rated Oxford BioMedica a sell earlier this year, partly over concerns about the TroVax phase three data.

Citigroup has downgraded Blue-Bay Asset Management, off 20p at 358p, from buy to hold and slashed its target from 540p to 410p on valuation grounds. Citigroup said its downgrade reflects two key issues - a reduction to its estimates and stock overhang risk.

TOMORROW'S AGENDA

• Cadbury Schweppes issues a full-year trading update. The world's biggest sweetmaker has been struggling in recent months because of rising dairy prices, and forecast that profitability would not improve until next year. However, a leaked memo earlier this week showed a massive jump in sales in October. While the demerger of its US drinks business will enable Cadbury to focus on its confectionery division, recent estimates suggest it will be facing a £1 billion bill from the move.

• Online bookmaker Sportingbet reports firstquarter 2008 figures. Last year's crackdown on internet gambling in the US hit the Paradise Poker owner hard and sent its shares crashing. It was forced to sell its entire Stateside operations for $1 to avoid the $14m (£6.9m) cost of closing down the business. Sales have begun to improve as it targets customers outside America, but Sportingbet admitted it would take five to 10 years to make up the shortfall in profits caused by its US exit.

• Leisure group Whitbread delivers third-quarter figures, with analysts fearing that trading in the UK at the Costa Coffee and Premier Inn owner will suffer because of the recent slump in consumer confidence. The company has shed its chain of fitness clubs, David Lloyd Leisure, and most of its restaurants to concentrate on its hotel and coffee chain units. Whitbread last month announced plans to step up the Chinese expansion of Costa and to open its first Premier Inn sites in Dubai next spring.