FTSE 100 week: Rally runs out of steam
The Footsie's rally appears to be grinding to a halt as more and more investors conclude that share prices might have run ahead of the recovery.
The FTSE 100 index was 44.97 points, or 1% lower, on the week at 5251.41.
The index is still up 50% since hitting six-year lows in March but is still some 2% below its level prior to collapse of Lehman Brothers bank in September 2008.
Analysts at SociÈtÈ GÈnÈrale on Thursday caused some anxiety as they issued a note envisioning a worst-case scenario in which Europe's economies struggle to claw their way into recovery, echoing Japan's 'lost decade' of the 1990s.
Marks & Spencer managed to shrug off the gloom however, rising by 2% to 380.2p as the City approved Marc Bolland's appointment as chief executive. Sir Stuart Rose will remain as chairman to ensure a smooth transition.
Bolland's departure from Wm Morrison left the supermarket group 5% down over the week at 275.6p. Rival Sainsbury dropped 4% to 329.4p on fears it could now lose its trading director Mike Coupe to Morrison. Former Asda boss Archie Norman's appointment as chairman of ITV helped the broadcaster rally 2%, or 0.95p to 52.25p.
Morgan Stanley considers Cobham, 2% dearer at 230.1p, to be the top pick in the defence sector and has moved to overweight with a £3 price target.
Plumbing supplies group Wolseley was the big faller of the week in the top flight, with a drop of 11% to 1250p, after predicting earlier this week that conditions would continue to worsen towards the end of the year.
And Lloyds Banking Group, despite Wednesday's announcement that the European Competition commissioner Neelie Kroes had finally approved the lender's receipt of state aid from the taxpayer, dropped 2% to 88.15p. However, the bank is still significantly ahead of its March low of 40.3p.
Rumours were rife on the German bourse that ubiquitous Austrian internet bookmaker bwin is on the verge of a major fundraising and has the online gaming group 888 at the top of its Christmas shopping list.
It recently acquired Gioco Digitale, the leading Italian online poker and gaming operator, and now wants to add 888 to further strengthen its hand in Europe. 888's shares firmed 6% to 108p over the trading week.
A revival of the ancient Gazprom takeover story made Centrica one of the stronger risers over the week. The shares went 5% higher at 257.2p on reheated gossip the Russian giant would soon launch a £4-a-share cash offer for the British gas operator. The Russians have often said they wanted to expand in the UK but dealers are still waiting.
Miners however filled the top two slots as the gold price nudged towards the $1,150-mark. Lonmin and Xstrata were both 6% higher at 1,693p and 1,070p respectively.
Lupus specialist ImmuPharma's shares tumbled following mid-stage data for its Lupuzor drug, leaving analysts and its chief executive saying the market has misunderstood the results.
Chief executive Dimitri Dimitriou explained there were two sets of figures, and one included people who should not have been counted. His comments did little to pacify the market and Immupharma closed down 9% at 107p.
A stonking first-quarter trading performance by market-makers Winterflood Securities, forever considered to be the jewel in the group's crown, helped Close Brothers rise 2% to 710.5p. Collins Stewart's target price is £10 after seeing the number of bargains per day executed by Winterflood increase to all time highs in the first three months of the year, supported by the strong market rally.
SMALL CAPS ROUND-UP
• Oil and gas exploration company Melrose Resources slumped 8% to 321p despite an upbeat trading statement which highlighted a 25% increase in production for the third-quarter.
• Altona Energy soared 22% to 5.13p after signing a binding agreement to enter into an Unincorporated Evaluation Joint Venture with China National Offshore Oil Corporation, one of the three largest state-owned oil companies in the People's Republic of China.
• Petra Diamonds dropped 1% to 65.5p, after entering into an option agreement to double its stake in the iconic Cullinan mine in South Africa to 74% from 37%.
• Canadian film producer Entertainment One jumped 16% to 45.25p following a trading update. Evolution Securities has a target price of 70p and says all the risks are on the upside.
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