London close: Footsie tumbles in Bear market

14.03.2008

A respectable gain became a big loss this afternoon as London tumbled over 150 points from its best levels on news that US bank Bear Stearns needs emergency funding to keep going.

The leading index had rallied initially on relief that the beleaguered investment bank had secured a rescue deal and following tame US inflation data.

But investors panicked as it began to sink in that the credit crisis had almost claimed a major victim. JP Morgan Chase and the New York Federal Reserve plan to provide secured funding for an initial period of 28 days.

Banks bore the brunt of the selling over here, with Lloyds TSB, Barclays and Royal Bank of Scotland in the red, while supermarkets Wm Morrison, Sainsbury and Tesco also suffered losses.

Life group Prudential featured among the worst performers despite hitting market profit forecasts for 2007. Friends Provident and Old Mutual kept it company.

But heavyweight miners held onto gains through the session as metal prices traded near record highs. Rio Tinto, Kazakhmys and BHP Billiton did well.

Meanwhile, broker Lehman Brothers upgraded platinum miner Lonmin to 'equal-weight' from 'underweight' and lifted its price target to 3,500p from 2,800p, citing expectations of higher metal prices.

Shares in Vedanta fell though after the broker downgraded the India-focused copper miner to 'underweight' from 'equal-weight' on valuation grounds.

Shire Pharmaceuticals was top of the pile as rumours did the rounds that drug titan Pfizer is prepared to pay 1,300p a share for the UK company.

International Power also posted good gains after Deutsche Bank upgraded the power station operator to 'buy' from 'hold'.

Tough conditions in capital markets hit Collins Stewart in the second half of 2007, with the stockbroker expecting the current year also to be challenging.

Aga Foodservice posted flat full year pre-tax profits and proposed a cash return of £140m but added that some of the economies in which it operates are 'clearly' slowing.

Outsourced workplace provider Regus saw profits surge 54.1% and increased dividends to 66.7% thanks to growth from all its geographic regions and said current year has started well.

RAB Capital, one of the main shareholders of collapsed bank Northern Rock, has seen assets under management dip this year with the group taking a cautious stance in the face of global liquidity and credit issues.

Elsewhere, widespread pub closures leading to a further downturn in trading have forced gaming machine group Inspired Gaming to review the future of its pubs division.

Five-a-side football operator PowerLeague posted slightly lower pre-tax profits but added that it is on target to achieve its full year plan.

Online marketing specialist TMN Group said Tangent's bid undervalues the firm and added that it has received more approaches.

FTSE 100 - Risers

Shire (SHP) 990.00p +4.98%

Tullow Oil (TLW) 653.50p +3.81%

BHP Billiton (BLT) 1,590.00p +3.65%

International Power (IPR) 393.00p +2.95%

Kazakhmys (KAZ) 1,790.00p +2.58%

Liberty International (LII) 978.00p +2.30%

Rio Tinto (RIO) 5,527.00p +2.22%

Cairn Energy (CNE) 2,945.00p +1.34%

Persimmon (PSN) 690.00p +1.17%

Lonmin (LMI) 3,413.00p +0.98%

FTSE 100 - Fallers

HBOS (HBOS) 528.00p -6.05%

ICAP (IAP) 598.00p -5.68%

Prudential (PRU) 622.00p -4.89%

Barclays (BARC) 433.00p -3.94%

Sainsbury (J) (SBRY) 326.25p -3.90%

Morrison (Wm) Supermarkets (MRW) 278.50p -3.88%

Friends Provident (FP.) 122.00p -3.79%

Alliance & Leicester (AL.) 512.50p -3.67%

London Stock Exchange Group (LSE) 1,232.00p -3.60%

Tesco (TSCO) 380.25p -3.43%

FTSE 250 - Risers

Benfield Group (BFD) 247.75p +7.37%

Real Estate Opportunities (REO) 111.00p +5.71%

888 Holdings (888) 154.25p +4.93%

Rank Group (RNK) 87.00p +4.50%

SIG (SHI) 788.50p +3.48%

Shanks Group (SKS) 233.00p +3.21%

Brown (N.) Group (BWNG) 231.00p +3.01%

BlueBay Asset Management (BBAY) 287.00p +2.87%

Aquarius Platinum (AQP) 735.00p +2.80%

Regus Group (RGU) 88.00p +2.62%

FTSE 250 - Fallers

Collins Stewart (CLST) 122.00p -6.87%

Aveva Group (AVV) 1,013.00p -6.03%

CSR (CSR) 300.00p -5.81%

Enodis (ENO) 151.50p -5.16%

International Personal Finance (IPF) 209.00p -5.11%

Petrofac Ld (PFC) 536.00p -4.96%

Mitchells & Butlers (MAB) 377.00p -4.50%

Micro Focus International Plc (MCRO) 191.00p -4.50%

IG Group Holdings (IGG) 358.75p -4.33%

DSG International (DSGI) 56.50p -4.24%

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