Stock market report: Tuesday close
Shareholders in Royal Bank of Scotland will no doubt be hoping things can only get better in 2009.
Movers: Latest on the last full day of trading in 2008
The shares today bounced off the bottom with a rise of 1.9p to 43.3p, putting them among the better blue-chip performers for a change.
Reports that the bank came within hours of going bust in the dark days of October will have hardly come as a surprise to most City folk.
But while bargain-hunters were happy to snap up shares and ferret them away, they will be under no illusion that any recovery will take some time to achieve.
Elsewhere in the banking sector, HSBC put on 7¾p to 620p. The shares have slumped from 927¾p since the start of October, and have been beset in recent weeks by talk of a £9bn rights issue or possible dividend cut.
Shares generally were squeezed higher in thin trading, the FTSE 100 index gaining 6.8 points to 4255.98. Evidence that the UK economy had contracted even faster than originally thought during the third quarter failed to put a damper on things.
But Marks & Spencer didn't join in the fun, sliding 7½p to 213¼p. Brokers remain worried about the possibility of further heavy discounting before the New Year sales get under way.
BAE Systems rose 12¾p to 355¼p after Goldman Sachs repeated its buy rating despite the prospect of a hefty cut in US defence spending, the lower oil price, the strained UK defence budget and a growing pension deficit. Goldman shrugs all this off, saying the City is being too pessimistic.
But it has downgraded rival Cobham, down ½p at 198.9p, from buy to neutral, and Ultra Electronics, down 6p at 1148p, from buy to sell.
Rolls-Royce responded to news of a major order from Etihad airways of Dubai with a rise of 5¾p to 320p. UBS has slashed its target for Smiths Group, up 13p at 899p, from 1350p to 1200p and initiated a "black-skies" scenario for the more cyclical parts of the aerospace group.
It also calculates Smiths has a net pension liability of £200m, but says additional cost savings from restructuring will help drive strong profits growth over the next few years. It has repeated its buy rating on the shares, saying the strong cash generation and possibility of a break-up bid make them attractive.
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Dresdner Kleinwort has cut its target for Chrysalis, unchanged at 51p, from 103p to 55p but keeps the rating on hold, claiming the shares offer substantial scope for recovery longer-term.
Full year results announced by the music publisher last week were disappointing but Dresdner says the group is now well placed to weather the storm, with the balance sheet containing minimal debt. Oil and gas explorer Dana Petroleum, down 15½p at 928½p, has received interests in eight new offshore blocks under four production licences issued by Norway. These extend its exploration programme in proven oil and gas areas. The company now holds a substantial position off Norway, with 14 production licences covering 25 blocks.
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