Market report: Monday close
CITY investors are confident share prices will breach the 6000 level before the weekend, and are even prepared to put money on it.
One firm of bookies was still offering odds today as traders and investors piled in. Spread better IG Index is quoting odds of 11-2 that the FTSE 100 will rise above 6000 before the close of business on Friday night.
Today, it was back above 5900 for the first time since Labour was re-elected with a 167 majority in May 2001, putting on 39.1 points to 5897.8. This was despite a nervous start to trading on Wall Street this afternoon.
The market was underpinned by another big move in Vodafone, which led blue-chips higher with a jump of 3½p to 125p. Remember, every penny rise in the mobile phone giant's price is equivalent to a three-point rise in the index.
Friday's news that Vodafone is in talks to sell its troubled Japanese operation for £7bn to internet service provider Softbank - just weeks after the company denied any such move - has gone down well with investors. Vodafone plans to hand £5bn of the proceeds back to shareholders in the shape of a special dividend. Turnover in Vodafone reached almost abn shares compared with total market turnover of 2.63bn.
Sentiment was also bolstered by record profits from the UK's biggest bank HSBC, up 14½p at 989½p, and confirmation of Linde's agreed offer of 1600p a share for BOC, 1p lower at 1543p.
Lloyds TSB rose 1½p to 547p in heavy turnover of 72m shares. This included a line of 50m at 550½p, which was described by traders as a dividend wash. Life assurer Aviva continued to respond positively to Friday's trading news with a jump of 19p to 830p. Deutsche Bank has raised its target for the shares from 883p to 935p, but keeps the rating at hold.
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British American Tobacco put on 35p to 1443p as US broker Citigroup lifted its target from 1330p to 1550p. Supermarkets chain Wm Morrison extended its recent rally with a rise of 2¼p to 209½p. Broker Chevreux has added the shares to its European sector top picks list, and raised its target by 21% to 260p. It has also raised its pre-tax profit forecast for 2007 by 16.6% to £385m and by 22% to £660m for the following year.
BT was again in demand, rising 11¼p to 231¾p on more talk of a bid by a consortium of private-equity companies. Deutsche Bank is not convinced and has downgraded BT from buy to hold. Retailer Mothercare dipped 5¾p to 358¾p despite director Neil Harrington buying 5000 shares at 362p. Former bid target the London Stock Exchange rose 4p to 863½p. Chairman Chris Gibson-Smith has bought a further 50,000 shares at 859p, taking his total holding up to 60,214.
Home shopping retailer N Brown jumped 16½p to 214p on talk of a bid. The Manchester-based group is currently valued at around £635m, but any offer for the company would have to carry along the Alliance family, which accounts for almost half the shares and appears to be in no rush to sell. The company says it knows of no reason for the share-price movement.
Another retailer on the move was discount stores group Matalan, up 7¼p at 198p, which is being linked with a bid by venture capitalists pitched around 220p. The shares are trading at less than half their peak of 557p five year ago.
Big turnover was seen in electronic equipment supplier Raymarine, down 1¼p to 312½p, as more than 19m shares changed hands. A line of 7.24m shares went through at 300p followed by 3.4m and 1.59m at the same price. Director Terry Carlson has sold 335,090 shares (£1.03m) at prices between 309½p and 310p.
Newcomer Absolute Capital Management has almost doubled since its debut on Friday. Placed at 140p, the hedge fund operator's shares climbed a further 67½p to 277½p.
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