Stock market report: Tuesday close
A big seller sent Lloyds TSB's stock tumbling 17.8p to 177.4p as more than 13m shares changed hands.
Latest: Updated share prices
The seller was said to have attempted to dump a large parcel of shares on the recently introduced Chi-X trading platform, as opposed to the recognised London stock market. Such was the speed of the markdown that traders were caught on the hop.
Word is hedge funds have been short of Lloyds and HBOS, down 8½p at 99.2p, as they straddled both stocks. They have now begun unravelling those positions, which means they have been dumping Lloyds stock.
The sale of shares coincided with another report that Lloyds proposed £7bn takeover of HBOS, which has been arranged by the government, may have run into further opposition. Word is bank of China may link with former HBOS chief executive Jim Spowart and investment company European American Capital over a possible counterbid to the offer from Lloyds TSB.
Over the weekend, HBOS rejected an approach by former bankers Sir Peter Burt and Sir George Mathewson to take over the running of the mortgage lender.
They argued the takeover by Lloyds was unfair to HBOS shareholders. Other banks also came out in sympathy with Lloyds and HBOS. HSBC fell 39p to 696½p, Barclays 6p to 179p and Royal Bank of Scotland 3½p to 57½p.
Shares generally slammed into reverse, with only four stocks in the top flight managing to stay in the black. In an other day of exceptionally thin trading, the FTSE 100 index closed 157.2 points down at 4246.7. By lunchtime, total stock market turnover was just 1.1bn shares. Wall Street was likewise subdued, as investors marked Veterans Day, but the Dow also witnessed a heavy sell-off, sinking 229.47 points to 8,641.07.
In London, Imperial Energy stood out among second-liners with a rise of 126p to 1126p. India's ONGC says it has met all the conditions required to complete its $2.6bn (£1.67bn) takeover of imperial, worth 1250p a share. Some speculators feared the deal would be scuppered by a falling oil price.
Morgan Stanley has slashed its target for Man Group, the UK's largest hedge fund operator, from 455p to 260p in the wake of last week's disappointing drop in profits. it reckons the move to reduce debt on the remaining $19bn of structured capital guaranteed product portfolio could drive assets under management to $37bn.
Man, down 32¾p at 248p, is also vulnerable, along with the rest of the hedge fund industry, to increased redemptions by clients as the stock market continues to falter.
News of stakebuilding lifted UTV Media 10¼p to 92¼p. Irish venture-capital outfit TVC Holdings has paid £2.2m for a further 3% of the shares, raising its total holding 18%.
At the same time, Organo investments has bought a further 2.8m shares in the Ulster TV broadcaster, lifting its holding to 9.54%.
Back in July, TVC raised its stake to 15% and Organo to 6.57%. But the UTV share price was then trading at around the 135p level - way down from the 321p at which it started the year.
Not all retailers are finding the going that difficult in the run-up to the important Christmas trading season. Automotive parts supplier Halfords, 8½p lighter at 250¾p, is regarded as a relatively safe way to play a sector recovery, due to its diverse and low product mix and potential for new store openings.
UBS has raised its rating on the shares from neutral to buy with a 297p target. It reckons Halfords' share price should trade at a 10% premium to the sector.
The drop in new car sales is good for the group, because it means drivers are making their existing cars last longer, and these therefore need more maintenance.
Punch Taverns lost ground on renewed fears over its £4.5bn debt mountain after comments from inter-Continental Hotels boss Andrew Cosslett, who warned the financial crisis is making finances harder to come by. Punch, whose debts stand at over 10 times the market value of its shares, dived 18½p to 151¾p.
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