Yesterday's trading: All hail Buffett
The Daily Mail's stock market team reports on yesterday's stock market trading in London.
The Daily Mail's Geoff Foster
Many a good tune is played on an old fiddle. Traders on both sides of the Atlantic happily sang the praises of Warren Buffett after the 78-year-old billionaire investor offered, via his Berkshire Hathaway holding company, to bail out troubled monoline bond insurers by offering reinsurance on up to £400bn in municipal bonds.
It raised hopes that perhaps the Sage of Omaha's move could effectively draw a line under the credit crisis. It sparked a classic bear squeeze and even tempted some brave fund managers to bottom-fish in oversold areas of the market.
Desperate for some good news for a change, the Footsie surged 202.3 points to 5910 on Buffett's intervention. The FTSE 250 soared 304.8 points to 10,040.2. Wall Street jumped 229 in early trading, before ending 133.4 points up. Sentiment was boosted by General Motors' cost-cutting measures, offsetting news of an awful £361m loss.
Continuing to thrive in current volatile trading conditions, Michael Spencer's giant money broker ICAP topped the leader board with a leap of 47p at 703p.
Probability, the Aim-listed mobile phone gambling specialist, edged up ½p to 59½p after placing 3.4m shares at 50p with IPGL, a company in which Spencer and his family trusts are majority shareholders.
Bradford & Bingley, which kicks off the banks annual results season today, rose 4¼p to 243¼p. Credit Suisse expects all banks will take additional write-downs against their Treasury portfolios.
In December, B&B said its pretax profit before write-downs and profits on disposals would be in line with consensus which at the time was around £357m. CS forecasts £359m and expects a charge of around £55m.
Ahead of next Tuesday's full-year figures, Barclays rallied 26½p to 455¾p. The bank in November said it would take a £1.7bn pretax write-down relating to its US sub-prime, structured investment vehicles and leveraged buy-out positions.
Dealers fear trading conditions at its Barclays Capital offshoot have since deteriorated and were not getting too carried away with yesterday's rally.
Rescue bid hopes helped beleaguered mortgage bank Northern Rock rise 8p to 105p.
Higher commodity prices and sector consolidation rumours lifted miners. Rio Tinto jumped 283p to 5523p on hopes that BHP Billiton (72p better at 1555p) will return with a knock-out offer.
Vedanta Resources added 128p at 2022p and Lonmin 194p at 3300p. After rejecting a takeover bid from Brazilian mining group Vale - pitched at just under £40 a share - Xstrata was sold down to 3685p before bouncing back to close 14p dearer at 3819p.
Vague talk of a bid from 22.6% shareholder 3i helped software group TeleCity advance 26¾p to 219p.
Off the back of government data showing that house prices actually rose in December and hopes that UK interest and mortgage rates will continue to fall for the rest of the year, housebuilder Barratt Developments erected a gain of 23¼p at 402p.
Social housing group Mears put on 12½p to 269p on hearing that an independent investigation has confirmed that it did not falsify information relating to the repairs service for the Family Mosaic Housing Association, its flagship branch in Hackney and Islington.
The shares were heavily sold and plummeted to 270p from 320p in July following a BBC 5 Live investigation into its business practices in Hackney after a former employee alleged that it had misled the housing association with fabricated monthly repairs performance figures.
Motor dealer Pendragon was back in the fast lane as rumours of a bid approach refuse to lie down. The close was 3¾p better at 36¼p. Inchcape, often mentioned in the same breath, accelerated 16¼p to 365¼p.
Business-class only airline Silverjet continued to lose altitude and ended 5p off at a low of 17p. Already unsettled by the Reuben Brothers' decision not to turn a £10m loan to the group into shares because of market conditions, competition concerns took their toll.
Rival US carrier Eos Airlines plans services between London and both Dubai and New York's Newark, two routes operated by Silverjet.
Following a positive update on the Kambuna Field Development in Indonesia, Serica Energy rose 12¾p to 81¾p. Brokers reiterated its buy stance and increased its net asset valuation to 111p per share.
• Punters will not shout 'house' at Rank until after next month's budget. Broker JP Morgan believes that the bingo and casino group will eventually be taken over, possibly by 6% Malaysian shareholder Guocco, but any potential bidder will wait until after March 12 when the VAT position on bingo will be clearer. Genting, which already owns Stanley Leisure, also owns 11% of Rank, ¾p easier at 98¾p.
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