London close: Footsie rallies to close in blue
London rallied near the close to end the day ahead after a day of mixed trading that at one point had seen Footsie down 28 points.
Yesterday's big losers led the fightback. Northern Rock is the best performer after Virgin Group was stripped of its preferred bidder status last night after rival Olivant threatened to walk away unless it was put on an equal footing with Sir Richard Branson's company.
Rentokil recovered from the share price beating it took yesterday when it warned fourth quarter profits from its express parcels delivery business City Link are expected to be up to £10m below expectations. Exane BNP Paribas upgraded its view on the pest control group to "outperform" from "neutral", though it lowered its target to 160p from 180p.
Rexam is another attracting bargain hunters after the can maker's share price crumpled yesterday in the wake of an announcement that the weaker dollar and the higher price of oil will hit profits this year. HBOS, however, saw more losses piled on to yesterday's reverses.
Shire edges higher on a buy recommendation from Merrill Lynch, with a 1370p price target.
British Gas owner Centrica says it will hit profit targets this year despite challenging market conditions, but said high wholesale prices will create a more difficult environment in the new year.
Miners are the big losers today after Goldman Sachs produced a review of the sector. The investment bank downgraded Vedanta to 'sell' from 'neutral' and cut its price target to 2,240p fro 2,545p and dropped its target on Lonmin to 3,675p from 3,900p. Xtrata had its price target cut to 4335p from 450pp.
Properties and housebuilders were also out of favour, with Liberty International the worst affected among the former and Taylor Wimpey suffering the most among the latter.
Among the mid-caps, GKN claws back some of the losses suffered as a result of its poorly received results yesterday. ABN Amro has initiated coverage on the engineer with a "buy" recommendation.
Shares in Mondi rise after Citigroup said its exposure to emerging markets would help fuel the paper and packaging company's growth. The broker maintained its 'buy' recommendation and 593p price target on Mondi, saying it could grow by around 20% a year over the next two years.
Keller retreats after it emerged yesterday that Goldmach Sachs has reduced its stake in the company below 3% from 5.97%.
Buy-to-let mortgage specialist Paragon is down in the dumps again after UBS downgraded the stock to "neutral" from "buy".
Elsewhere, overall trading for the second half is in line with expectations at publisher United Business Media, with underlying revenue growth seen at between 6% and 7%, significantly ahead of the first half, it says.
Investors have an appetite for Northern Foods this morning after the group announced its intention to buy back up to 5% of its issued ordinary shares. The buy-back will be financed from existing bank facilities. The group said that since its half year results were announced on 13 November it has continued to make steady progress across its businesses.
Laundry and workwear company Davis Service has had a good first three quarters and reckons full year revenue growth will top 15%. Broker Investec has set a price target of 565p following the trading update.
Semiconductor group Wolfson Microelectronics is sharply lower after Goldman Sachs changed its verdict on the stock from "neutral" to "sell", and set a 9-month price target of 180p.
Outsource specialist Xchanging expects its trading performance for 2007 will be in line with expectations. "Based on the high degree of visibility of 2008 revenues from existing contracts and our pipeline of opportunities, Xchanging looks forward to continued strong growth in the year ahead," it added.
PartyGaming's financial performance in the fourth quarter to-date has been in line with expectations, the online gambling group said in a brief update. It added that the group remains confident about the prospects for the current year. In October, the company reported a 24% hike in the third quarter revenue to $115.7m, helped by strong growth in casino games where sales rallied by 158% to $36.7m.
US-based children's entertainment company DIC Entertainment has lost more than half its value on news that results for 2007 will not meet current market expectations. The shortfall in profits is "solely due to the decision to take non-cash write-downs in the carrying values of certain properties contained in the company's animation library," the company said.
Vehicle tracking company Trakm8 lost its way after swinging into a pre-tax loss at the half year stage due to delays in orders and the impact of problems with a component supplier.
Foods group Ukrproduct is in demand after revealing trading performance in the second half is ahead of management's expectations with expected profit after tax for the year likely to reach £3 million.
Product testing business Inspicio has agreed a cash offer worth 225p per share from Angus Newco. The offer values Inspicio at approximately £229m.
Japanese insurer Tokio Marine and Nichido Fire Insurance has made a £442.2m, 150p per share, bid for Lloyds of London insurer Kiln.
Retail software group NSB Retail is going well after it announced a bid approach just before the close of play last night.
IT solution provider Electronic Data Processing is wanted after it ramped up pre-tax profit by 57% and said it is seeing increased demand for its software products and hosting services.
Losing contracts seems to be becoming a habit for North Midlands Construction. The group warned of problems with two contracts when it declared its interim results, and since then the company has experienced further losses on two contracts within the civil engineering division. Accordingly results for the full year are now expected to be below management expectations.
Fellow media company Burst Media is punished, however, after confirming that full year profits will be lower than expected, primarily due to poor performance by the Burst Network.
Film distribution company Works Media gets a lift from news that its chairman has purchased a million shares to raise his stake to 21.22%.
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FTSE 100 - Risers
Northern Rock (NRK) 91.90p +6.86%
Rexam (REX) 424.00p +3.67%
Shire (SHP) 1,126.00p +3.59%
Rentokil Initial (RTO) 118.20p +3.41%
Reed Elsevier (REL) 640.50p +3.22%
National Grid (NG.) 842.00p +2.62%
FTSE 100 - Fallers
Antofagasta (ANTO) 702.50p -4.29%
Anglo American (AAL) 3,072.00p -3.40%
Hammerson (HMSO) 968.00p -3.01%
Whitbread (WTB) 1,355.00p -2.94%
Lonmin (LMI) 3,029.00p -2.35%
Rio Tinto (RIO) 5,176.00p -2.23%
FTSE 250 - Risers
Close Brothers Group (CBG) 950.50p +9.82%
Northern Foods (NFDS) 91.00p +8.98%
Collins Stewart (CLST) 180.50p +8.41%
Autonomy Corporation (AU.) 867.00p +7.04%
Dimension Data Holdings (DDT) 62.25p +6.41%
JD Wetherspoon (JDW) 380.25p +5.55%
FTSE 250 - Fallers
Keller Group (KLR) 638.00p -8.33%
Morgan Sindall (MGNS) 1,064.00p -5.08%
Pendragon (PDG) 33.50p -4.96%
Benfield Group (BFD) 272.25p -4.56%
Debenhams (DEB) 81.25p -3.85%
Aquarius Platinum (AQP) 550.00p -3.85%.
