Market report: Thursday close
Just when banks thought it was safe to start looking at the state of their share prices again, along comes Goldman Sachs to ruin the mood.
After nervous signs of recovery this week, the banks were charging back downwards today, with a Goldman note fingered by brokers as one of the culprits. The note was far from devastating, but these days it doesn't take much.
Goldman downgraded Lloyds TSB to a sell and UBS joined the fray, saying Lloyds is the 'least preferred' of the UK banks. The shares tumbled 20½p to 462¾p. UBS does like the look of Barclays, down 17p at 487p, but Goldman remains a seller, though with less conviction than previously according to a note.
The biggest victim of sentiment, not for the first time, was Alliance & Leicester, where bid hopes have risen and faded for the fiftieth time in the past 100 days.
A&L was one of the biggest FTSE fallers, off 21½p at 536½p. At that price, to the amusement of some, the shares are already below the 544p at which the executives have just granted themselves fresh share options.
The London Stock Exchange gave back some recent gains, down 50p at 1283p. Although it is now assumed that no other banks will join Northern Rock in the bin, some stockbrokers are still advising clients to use any bounce in financial stocks as an opportunity to sell.
Miners and energy houses were moving up as investors again played defensively-BG Group added 39p to 1164p while Tullow Oil was up 11p at 649½p and BP gained 2p to 522½p.
The FTSE 100 index fought to stay in positive territory early on but was tonight down 24.6 points to 5891.3.
A pre-close trading update from Halfords got the thumbs-up from Shore Capital, which thinks sales will rise in the next quarter. The car accessories and bicycles chain reported a 4.2% uplift in annual sales.
It is still searching for a chief executive to replace Ian McLeod, who stepped down after three years to move to Australia. The stock added 1¼p to 296p.
Mothercare had a strong fourthquarter trading update, thanks to rapid sales growth at the international arm. Landsbanki said: 'The many actions taken over the past few years now seem to be coming together nicely.' It maintains a buy on the shares, up 11p at 415p.
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The market hated news that Peter Gill is stepping down as finance director of bingo group Rank. Gill indicated that his work is largely done in terms of restructuring the business, but with rumours, surely unfounded, of trouble with the banking covenants, the timing is not great. Broker Kaupthing said: 'Peter had only been with Rank for a few years and so we are slightly surprised by this move.' Genting has been rumoured to be preparing a bid for Rank, though Guoco seems a more likely aggressor.
Rank shares fell 10¾p to 89p, the biggest FTSE 250 plunger.
Pub shares have been flat at best for some time and even a bouncy note from Panmure Gordon couldn't help JD Wetherspoon. Panmure was full of praise for the cheapness of JD's drinks and reckons its fish and chips (£2.99, buttered bread included) are a definite buy. Investors aren't sure about the shares, however, which lost 9p to 271p.
Trading volumes were again light, with big players sitting on their hands despite the best efforts of dealing houses to drum up business. Even those simply trading the index were waiting for a clearer sense of direction from America before deciding which way to jump. Wall Street was tonight down 54.9 at 12,551.0.
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TOMORROW'S AGENDA
• In the US, all eyes will be on March's nonfarm payrolls, which are expected to drop for the third consecutive month. Economists predict a more moderate decline than February's 63,000, at around 50,000, on the back of other labour surveys hinting at further weakness in the employment market. The data will influence the Federal Reserve's next rates decision. Meanwhile, the unemployment rate is forecast to rise from 4.8% to 5%.
• Friday is the last working day of the financial year before a raft of changes are brought in on Sunday. In a bid to simply the system, income tax bands are being redrawn, with the 10% band scrapped and the basic tax rate cut from 22% to 20%. Taper relief is being abolished, meaning many people will be rushing to sell shares while the allowance still stands. Finally, the countdown is on for those wishing to benefit from their cash Isa allowance for this tax year.
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