Stock market report: Thursday latest
Banks led the way on the stock market today, with over 600m shares in Royal Bank of Scotland changing hands, adding more than £2bn to its value, even though it reported a record £24.1bn loss.
Reasons to be cheerful?: Traders will be watching for service sector results
The shares climbed 5.9p to 29.0p, with dealers claiming a line has now been drawn under its toxic assets, and the Government-controlled bank can focus on cutting costs and rebuilding its balance sheet.
RBS was followed by Lloyds Banking Group, up 17.6p to 75p on hefty turnover of more than 130m shares.
The UK's biggest mortgage provider, which reports tomorrow, has already declared that losses from its HBOS subsidiary are expected to reach almost £11bn.
The two banks are expected to dump a total of £500bn of toxic assets into the Government's proposed asset protection scheme, which it is hoped will leave them to start with a clean sheet.
Panmure Gordon says the favourable pricing of the asset protection scheme will remove immediate concerns about capital and an additional capital injection by the Government.
Barclays, which remains outside the Government's golden circle, celebrated with a rise of 7.4p to 113p on turnover of 95m shares while HSBC, which reports next week, jumped 34½p to 527p.
The move by the banks provided renewed impetus among City investors, although shares traded below the best levels of the day. The FTSE 100 index rose 66.7 points to 3915.6.
Wall Street opened high this afternoon, clawing back some of yesterday's losses despite more gloomy economic news. The Dow put on 87.7 at 7358.6.
Insurer RSA responded to its latest trading update and news of job losses with a rise of 17.8p at 143.8p.
Shore Capital has repeated its buy rating on the shares and described the group's 2008 performance as 'powerful'.
The results helped boost Legal & General, up 9.6p at 44½p, and Old Mutual, 6.4p better at 47p. Prudential, which has endured some wild price swings in the past few days, gained 37¼p to 305p.
Hammerson showed a gain of 4.33p at 231p as trading began in the nil-paid at 78¼p. It follows the property developer's move to raise almost £600m by way of a seven-for-five rights issue at 150p.
British Land rose 29¼p to 451½p, and Land Securities added 15½p to 543p. Both companies have chosen to tap shareholders for extra cash.
Goldman Sachs has repeated its neutral rating on Land Securities, but dropped its target from 714p to 671p in the wake of its rights issue. Goldman says the extra £755.7m will give the group significant protection from entering the final tier three level of its debt covenant structure.
Property companies have been forced to raise extra funds because of falling property values, which have forced up debt levels.
Segro, formerly slough Estates, has successfully renegotiated banking covenants on loans totalling £1.7bn and begun selling assets. Numis has raised the shares, up 9½p at 107¼p, from sell to buy and says the company is now in a good position to launch a rights issue of its own. However, it has lowered the target for the shares from 245p to 125p.
Dunelm put on 30½p to 194p. The homeware retailer has been having a good recession, helped by its value-for-money appeal. Like-for-like sales grew by 4.4% in the eight weeks to 21 February, boosted by a successful winter sale. Pre-tax profits edged up £100,000 to £27.3m.
Topps Tiles spiked 2¼p to 23¼p on whispers Lord Harris's Carpetright, down 23½p at 468p, may bid. Topps hit a low of 15p earlier this month after credit insurance was withdrawn.
Children's television producer Entertainment Rights, which owns characters such as He-Man, Casper The Friendly Ghost and Postman Pat, is in advanced talks with bidders for the sale of certain parts of the business.
Neither a sale nor the alternative of a bank-supported restructuring would result in any value being attributed to the shares, down 0.37p to 0.18p.
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Tomorrow's agenda
Eric Daniels will try to calm investors' fury when he delivers dire results from Lloyds Banking Group.
Only four months ago, the Lloyds chief executive was hailed as a hero for rescuing HBOS but backlash against the takeover has grown, particularly after an admission that his staff rushed due diligence.
The bank has already flagged up that the Lloyds TSB unit made pre-tax profits of around £1.3bn last year, but that the HBOS side of the business sank into the red by about £10bn.
The market will demand further details about the factors that led to the losses. Daniels' comments on outlook and future plans will also be scrutinised, particularly on how the group intends to position itself in the mortgage market.
Willioam Hill is expected to announce a cash call and the scrapping of its shareholder payout when the bookie publishes full-year figures. The fund-raising, which is thought to be fully underwritten, will help to shrink its £1.2bn debt mountain. Analysts predict the company will report strong trading, with profits of about £210m last year.
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