FTSE close: Vedanta up, Ladbrokes down
Shares in London managed to hang on to most of the gains from early in the session as US markets managed to open in positive territory.
The Footsie rose 45.7 points to 5,154.6 by the afternoon close, as the Dow Jones gained 92.7 points to 9,818.3. Sentiment was lifted by figures today showing the number of US workers filing new jobless claims last week fell more than expected to a nine-month low.
Simon Schaffer, a trader at Shore
'The financials are reporting next week and they are the ones that can really affect this market. It feels like there is more room to move up and investors are looking for a reason to breakout of this tight trading range,' he said.
Vedanta Resources set the pace with a gain of 4% or 85p to 2190p, after posting a 15.6% rise in second-quarter output of refined zinc and a 27.3% increase in iron ore, its two most important minerals.
Antofagasta followed with a climb of 37p to 834.5p and Anglo American put on 84.5p to 2,182p.
One of the biggest moves from a non-mining stock came from BT Group after Exane BNP Paribas said the telecom sector deserved to be viewed more positively. It lifted its price target on BT from 95p to 180p, causing shares to rally 3% or 4p to 134.8p.
It also upgraded Carphone Warehouse, which said today it added more subscribers than expected to its TalkTalk broadband business. With Carphone also reiterating guidance for the year to March, shares lifted 1.5p to 206.5p.
Luxury goods firm Burberry rose 28p to 532.5p amid a recent round of positive broker comment.
Lloyds Banking Group, however, missed out on the rally, shedding 1.35p to 94.3p. The Financial Times reported the part-nationalised lender was sounding out investors about a £15bn rights issue to help it avoid a government scheme to insure against credit losses.
In the FTSE 250, Halfords rallied 7.05%, up 25.7p to 390p, after it reported a 2.2% rise in second quarter like-for-like sales and forecast half-year profits well above market forecasts.
Bookmaker Ladbrokes moved in the opposite direction, down 5.4% or 9.8p to 171.4p, after it announced plans to issue new shares and said an unfavourable run of football results had caused profits to slide.
Rival firm William Hill was impacted by the trading statement as its shares fell 5.2p to 171p.
Shares in Carillion rose 20p to 298.3p after the construction and support services firm said earnings will grow in 2009, and that it will cut debt in the second half.
Andy Brown at Panmure Gordon rates the company a 'buy': 'We continue to believe that the growth opportunity in the Support Services division, plus the ability to be selective on its construction-related work, provides a key differentiator for the group.'
Autonomy shares rose 3% immediately after the software firm said it expected third-quarter results ahead of market expectations.
The company, whose software helps companies search data across phone calls, email, videos and instant messages, said it anticipated reporting earnings per share of between 20 and 23 cents, compared with a company-supplied consensus of 19.8 cents.
Panmure Gordon raised its target price from 1808p to 1867p and retained its buy rating: 'Autonomy has one of the most exciting technology franchise ... and a good product will always out.' But shares later closed 11p down at 1,606p.
In small caps, ATH Resources took a 0.5p hit to 52p after the coal producer said a shortfall in full-year sales volumes is expected to hurt its profits.
'Despite its best efforts to make up the shortfall in production caused by the problems at (Scottish mine) Muir Dean from elsewhere, the company has come up just short of its target,' Seymour Pierce analyst Asa Bridle says.
'On the back of the lower production level, our 2009 pretax profit forecast falls by 23% to £5.5m and earnings falls by 9.4p a share,' the broker says in a note.
The broker, however, says that despite the downgrades, ATH continues to look attractive on a range of multiples and dividend yield and maintains a 'buy' rating on the stock.
Oil prices
The price of crude oil climbed higher today despite signs in the US of huge surpluses. Crude added $1.40 to $70.97 in New York while Brent crude gained $1.43 to $68.6 in London.
Natural gas and heating oil prices were also on the rise. Analysts were startled by the rises given that the Energy Information Administration in the US said earlier this week that the country continues to sit on massive surpluses of petrol. Distillate fuels, which have industrial uses including being the key fuel for power stations, have seem stocks grow to their highest level since 1983.
Today's rises were said to be due to weakness in the dollar. Energy prices rises as the dollar falls and international investors gain more buying power.
CITY DIARY FOR TOMORROW:
• Oil services company Wood Group updates the market on trading. Analysts at UBS believe the company could still be on the hunt for acquisitions after buying US group Baker Energy last week. UBS predicts an 11% drop in second-half revenues to £1.5bn. • John Lewis posts its weekly trading figures tomorrow. Soaring clothing sales helped the department store chain to report a 4.7% jump in sales last week.
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