Yesterday's trading: Time to buy says market ace
It always pays to follow a man with form. When Morgan Stanley's equity guru Teun Draaisma advised clients to effectively fill their boots and 'don't be short' of European equities, they and a lot of other shrewd investors certainly did.
Exciting times: Wall Street surged as Americans went to the polls
Remember, it was Draaisma who called the top of the raging bull market in June 2007 making a 'full house sell signal'. Yesterday, he turned full circle with a 'full house buy signal' basing his decision on four main indicators - valuation, capitalisation, risk and fundamentals.
Timed to perfection ahead of an expected hefty cut in UK interest rates tomorrow and amid speculation that Barack Obama would win the US Presidential election, Draaisma's comments helped the flying Footsie race ahead and close 196.22 points higher at 4,639.5.
It now stands an incredible 20% above its year's low of only a week ago. Not to be outdone, the FTSE 250 soared 334 points to 6,778.7.
As millions of Americans voted to determine the 44th President of the United States, Wall Street soared 391 points.
Bulls believe the election result removes a lot of the uncertainty and with credit markets thawing nicely, the short-term trend should be higher.
However, they shouldn't get too carried away because the average rise in the year following each Presidential election since 1960 has been a paltry 4.5%.
There will not be many winners in the High Street this Christmas as families dramatically curb spending on gifts to conserve cash. Game Group, Europe's leading specialist retailer of PC and video game products, has been bucking the gloomy trend and could yet enjoy a particularly good festive sales period. It continues to benefit from the rapid take up of 'third generation' consoles such as Nintendo Wii and Sony's PS3.
Game's shares zapped 19¾p higher to 149¾p on hopes that a quality line-up of games it will have on its shelves in the lead up to Christmas will see it trade well out of all of its 1,300 stores spanning 10 countries.
It reported record first-half profits of £36.4m in September and like-forlike sales growth of 22%.
Customers have bought best-selling games such as Tomb Raider, Grand Theft Auto and Wii Fit, to play at home as an 'affordable alternative' to other more expensive outdoor activities during the credit crunch.
They have also got involved in discounted 'previously owned' offers which have proved to be a big success for the company. Game's sudden popularity with punters also coincided with vague speculation that it could be planning a £1bn merger with HMV, 10p better at 111¼p.
HMV in September opened its largest store for 15 years in Liverpool. Video gaming continues to underpin underlying sales growth and it plans to launch pre-owned offers in the New Year.
Game and HMV would fit like a glove but talk of a marriage at the this time of year does seem a bit off the wall.
Satellite broadcaster BSkyB, currently in talks to buy Italian group Tiscali, which has 1.2m broadband users in the UK, jumped 34¾p to 425¼p. Sky also secured carriage for its basic channels on Virgin Media from 13 November until June 2011.
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Hedge fund Man Groupadvanced 42¼p to 403p on hopes that tomorrow's half-year results come up to scratch. Michael Spencer's giant money broker ICAP rose 333/4p to 365¾p on hearing that Blackrock now holds 5%.
On hearing that Mears is enjoying strong trading across all divisions, has an order book of £1.6bn and booked 81% of budgeted revenues for 2009, buyers chased the social housing and geriatric care group 16p higher to 250½p. Arbuthnot rates the stock a strong buy and believes it is an ideal defensive investment.
IT group Paritywas sold down to 5½p and closed ½p easier at 8½p after issuing a secondhalf profit warning. Market conditions have deteriorated since August with buying cycles lengthening and client spending getting tighter.
AIM-listed red24, which provides security advice for individuals and corporates travelling abroad, firmed 0.8p to 25/8p after announcing a maiden interim profit.
Director buying lifted China Food Company 2p to 30p. ITE, the international exhibitions group specialising in emerging and developing markets, gained 9½p to 91¼p on an Altium Securities recommendation.
Analyst Roddy Davidson says £60m of 2009 expected revenues have been booked at the September update, more than 10% ahead of last year.
After chief executive Mark Caruso and finance director Frank Terranova banged the drum at investor roadshows in the City, Allied Gold sparkled at 13p, up 2p.
• Russian billionaire Alishar Usmanov holds 23% of Arsenal Football Club and wants to increase that to a 'blocking' 25% plus one share. Somebody splashed out £382,200 on 49 shares on Monday and £32,800 on a further four yesterday.
It could be him as he strives to reach 25% and make it difficult for the Premiership club to do exactly what it wants. Shares closed at £7,950 compared with the peak of £9,250.
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