Yesterday's trading: Footsie extends winning streak
Only just and thanks to a late burst by determined buyers, the fabulous Footsie extended its winning streak to 11 consecutive trading days to match December 2003's record.
Geoff Foster: Buyers re-appeared just before the close.
It could have gone either way though as the index lost a 49-point gain to trade 30 lower, but buyers re-appeared just before the close to push it higher in thin trading. The close was 9.52 points up at 4,586.13, but the FTSE 250 failed to join the party and lost 61.58 points to 7,876.86.
Wall Street initially traded lower despite the better-than-expected leap in new US home sales in June.
The collapse of the American housing market was one of the main causes of the credit crisis and growing signs of a recovery in that area has helped fuel the recent strong rally.
However, some traders in New York decided to take profits following disappointing quarterly earnings and news of 8,000 redundancies at Verizon Communications, and the Dow struggled to record any gains.
Lloyds Banking Group, which is 43% owned by the Treasury, closed 5.34p better at 81.9p. Ahead of the bank's interim figures on August 5, Nomura upgraded to buy from reduce and raised its target price to £1. The Japanese broker believes Lloyds has the least downside risk of the major banks.
Rival broker Cazenove kept its 'in-line' recommendation. It believes a combination of low expectations and acquisition accounting will help Lloyds report half-yearly results better than feared.
Lloyds may guide to a lower impairment charge for the second half and give more details to its view of core earnings. Caz forecasts an underlying pretax interim loss of £5.1bn, compared with a £2.8bn profit in the first half of 2008. Selling ahead of its half-yearly figures on Monday left Barclays 11p cheaper at 308.34p.
Leading retailers gave ground after credit ratings group Fitch said that the 'green shoots' in UK retailing are unsustainable. Kingfisher lost 7¼p to 202¾p, Marks & Spencer 10½p to 328½p and Home Retail shed 7½p to 297¾p after Fitch warned that the weak health of the UK consumer may preclude a lasting recovery until 2011.
Recent favourable results from retailers have been boosted by temporary factors such as weather and early aggressive promotional activities and clearance sales.
Unemployment is expected to rise further well into 2010 even as the UK economy stabilises suggesting a recovery of the UK retail sector will lag the broader economy.
Platinum miner Lonmin, of which Xstrata sits on 25%, rose 58p to 1291¼p after Goldman Sachs upgraded to neutral from sell. Following a positive third-quarter trading statement, Lonrho firmed ½p to 8.13p. Turnover soared 226% to £18.5m over the period which is traditionally the company's slowest in trading terms due to seasonal effects.
A revival of the ancient Honeywell takeover story lifted engineer IMI 3¾p to 328½p.
Filtronic cheapened 3½p to 33½p after slightly better-than-expected results were overshadowed by the company's accompanying statement and view that the immediate outlook remains subdued.
After further consideration of Friday's £22.4m share placing at 35p, oil and gas company Nighthawk Energy advanced 4¾p to 43¾p. Broker Daniel Stewart is bullish and says the placing allows Nighthawk to increase the development pace of its core assets, namely the Jolly Ranch and the Revere projects. Its target price is 88p.
Semiconductor company Cyan improved 0.2p to 2.13p after linking up with Future Electronics, one of the three largest electronics distributors in the world. It will supply FE with its microcontrollers - for wireless control of water, gas, electricity metering and streetlamps - to utility companies around the world.
Set top box manufacturer Pace dipped 3¼p to 197¼p despite reporting that revenues for the six months ended 30th June increased to £526.5m from £231.1m and pre-tax profits climbed to £21.7m from £7.9m.
Following a disappointing trading statement, support services group WSP shed 3½p at 243p. The board reported lower annual profits and warned that market conditions would continue to deteriorate with trading remain challenging until at least the end of the calendar year.
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