Yesterday's trading: Banks boosted by US glory
Wonderful Wall Street led the charge as buyers made their presence felt on both sides of the Pond. News that the pace of sales of existing homes in the US rose a better-than-expected 5.1% in February, the largest percentage gain since July 2003, lifted the Dow Jones by a dramatic 337 points in early trading.
Geoff Foster: One eye on the market
Stabilisation in the housing market is critical for the economy, and skyscraper-high hopes that the improving sales trend will continue in the coming months had overweight bears running for cover.
The bullish housing data followed hard on the heels of Treasury Secretary Timothy Geithner's long-awaited plan to cleanse toxic assets from US banks' balance sheets. Details of the £345bn Public-Private Investment programme sent bank shares into orbit. Citigroup rocketed 25% and Bank of America 15%.
Back in London, the Footsie happily bathed in America's glory, rising 135 points before closing 109.96 points better at 3,952.81. The FTSE 250 rose 118.8 points to 6,391.21.
Home banks took their cue from their American counterparts. Barclays ended 16½p up to 121½p as speculation intensified that a consortium led by private equity giant Hellman & Friedman will soon fork out £3bn for Barclays' exchange traded fund business iShare.
HSBC jumped 46¾p to 417¾p and Lloyds Banking Group 6.2p to 61½p.
Still buoyed by last week's better-than-expected figures from Prudential (up a further 15½p to 348¼p), insurance stocks attracted strong support. Old Mutual leapt 7½p, or 17%, to 51.3p and Aviva 26p to 264p. Even Legal & General, which could slash its dividend for the first time tomorrow, firmed 2.1p to 44.9p.
As the price of copper touched a four month high on evidence of robust Chinese import demand, mining stocks marched forward. Lonmin, which along with Fresnillo (42¾p dearer at 457¼p) also celebrated a return to the Footsie, climbed 163p to 1530p. Rio Tinto put on 264p to 2292p.
Oil and gas producer Venture Production gushed 9½p more to 797p on rumours of a 950p a share cash bid from 22.3% shareholder Centrica. Fears that it could end up eventually paying too much for VP left the latter's share price 5p off at 243p.
Heartened by evidence of a recovery in the US housing market and hopes that the bottom-of the domestic housing market is not far away, housebuilders erected useful gains. Barratt Developments rose 8½p to 89¼p and Taylor Wimpey 1¼p to 20¾p. Property group Segro, the former Slough Estates, were quoted ex-rights at 112p, down 24½p.
Punters chased Caledon Resources, in which Polo Resources (0.05p better at 3.45p) has a 26% stake, 6¼p higher to 32¼p on takeover hopes.
The company announced in January it had received several bid approaches. Word is it has given a three-week deadline to interested parties, which apparently include an Indian steelmaking group and a US investment company, to put up or shut up. Meanwhile, Polo is getting back into the uranium business by subscribing for 10m shares in Berkeley Resources.
Energy services group Cape closed 13p better at 78½p on hearing that its Australian subsidiary had won a £29.2m contract to provide support to the construction of Woodside Petroleum's Pluto liquified natural gas project.
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Ceres Power advanced 6¼p to 101¼p after securing a 50,000sq ft site in Horsham, Sussex, as the location for its 'mother plant' manufacturing facility for its fuel cells. Evolution Securities has a target price of 125p and hopes that this will soon be followed by news that British Gas has verified its CHP product works as specified.
Pleasing 2008 annual results helped Publishing Technology add 7½p at 52½p. The largest provider of digital and print solutions for the publishing industry - its systems handle the royalties of famous authors such as JK Rowling - reported revenues up 7% at £15.4m and profits up over £1m to £0.9m.
Sensor company ViaLogy soared 2p to 4¼p after revealing its QuantumRD oil exploration technology has located a major new oil discovery in Texas.
Atascosa Exploration used QuantumRD to find a reservoir at the Galba prospect containing 153,000 barrels of oil. The entire field could contain as much as 2m barrels of oil, and ViaLogy is in line for royalties worth 5% of future sales.
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