Stock market report: Tuesday close
Shares in ITV reached a new record low of 25½p, with the price softening a further 1p as the fate of BSkyB's 17.9% stake in the ailing independent TV broadcaster continued to overhang the market.
Updated: Latest share prices
But City speculators say the problem may soon be resolved. RTL, which owns a number of satellite and terrestrial channels, such as Five, may make an offer for the entire stake - perhaps as the prelude to a full bid.
BSkyB, up 6p at 487¼p, has been ordered to reduce its holding in ITV below 7.5% by the Competition Commission. It bought the stake for £940m, or 133p a share, back in 2005 in order to block an attempted takeover of ITV by Sir Richard Branson's Virgin Media. If it sells the entire stake, BSkyB could be faced with losses of up to £757m.
The speculators claim RTL wants to move quickly to prevent another takeover attempt by Branson. BSkyB is currently renegotiating the television rights for the Premier League, due to run from next year until 2013.
The continued disruption to public transport, brought by the biggest snowfall in London for 18 years, continued to take a toll both on both attendance levels and on turnover in the Square Mile.
In another day of subdued trading the FTSE 100 index was up 86.7 at 4164.5, despite the setback for Wall Street overnight. But dealers say the absence of any real demand paints a false picture of what is going on in the marketplace. By lunchtime, fewer than a billion shares had changed hands.
Record full-year profits from BP, down 2½p at 487¼p, were offset by the fourth-quarter loss - the first in seven years - due to the falling oil price. In India, Cairn Energy, up 60p at 1814p, has received permission from the state government of Rajasthan to build an oil pipeline. Oriel Securities says the move allows Cairn to start buying land access rights. The broker has repeated its buy rating.
The broking arm of Europe's biggest bank, HSBC, wants to know if it is a case of goodbye, or good buy for the UK's High Street lenders.
HSBC rules out the possibility of full-scale nationalisation for those banks that have gone cap in hand to the Government or overseas investors. 'With the immediate nationalisation threat removed, the risk/reward ratio for the banks looks significantly better,' it said.
It is now clear that the Government does not want to fully nationalise UK banks, it added. It would only occur if there were a run on the banks or they ran out of regulatory capital.
The broker has raised Royal Bank of Scotland, 0.2p firmer at 20.6p, from neutral to overweight and upped its target from 15p to 35p. Barclays, down 2.6p at 92.3p, continues to be rated neutral, with its target dropped 170p to 110p, as does Lloyds Banking Group, ½p cheaper at 88.7p, which is cut from 130p to 90p.
News that Turquoise has been growing its market share of shares trading across Europe and London pulled down Clara Furse's London Stock Exchange. Turquoise was set up by a bunch of investment banks to rival the likes of the LSE, which tumbled 33p to 422½p today. Regulatory changes afoot in the European Union also acted as a drag on the LSE, which was trading at nearly £20 little over a year ago.
Most of the miners had a good day after Goldman Sachs upgraded Vedanta, up 32p at 575p, and said Kazakhmys and Xstrata, up 22¼p at 244p and 61½p at 627p respectively, were the most attractive stocks at current prices.
Rio Tinto gave back some of yesterday's gains as doubters emerged over its plan to sell another big stake of itself to China's Chinalco. Critics are pondering how an 18% stake held by the Chinese would be seen by those considering rio a takeover target?
Citigroup has slashed its target for industrial-materials producer Cookson, 1¾p down at 93¾p, from 275p to 153p in the wake of last week's rights issue. It says the 12-for-one at 10p will raise £240m which should alleviate the balance-sheet risk.
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Tomorrow's agenda
Mining giant BHP Billiton said last week that it was axeing 6000 staff and closing an Australian nickel mine in response to softening global demand for metals. Meanwhile, its shares suffered as a rumour spread that it was trying to guide the City down on expectations for its figures, released tomorrow. But BHP is considered to be in a much better position than rivals Rio Tinto and Xstrata, with a smaller debt burden. Chief executive Marius Kloppers must be thanking his lucky stars that he withdrew the group's offer for Rio. UBS believes investors will get some good news at least, with its shareholder payout maintained. Meanwhile, comments from Kloppers on the outlook for commodity prices will be listened to closely.
Chipmaker Wolfson Microelectronics posts full year figures after enduring a miserable few months. The group issued a profits warning last year and was this month fined by the Financial Services authority for creating a false market in its shares. Wolfson is tipped to report pre-tax profits of £11.6m.
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