News

London pulled back from the brink Monday as investors cherry picked stocks they think have what it takes to survive the looming recession.

Leading shares had plunged early on, dropping more than 5% to their worst in 5½ years as Japan sank to a 26-year closing low on recession fears and bank woes. Wall Street has turned higher, but remains volatile.

Defensive plays were the order of the day over here. British American Tobacco, stronger ahead of Thursday's quarterly results, was joined by Imperial Tobacco among the leaders.

Drug giant GlaxoSmithKline also enjoyed support, as did supermarket trio Wm Morrison, Tesco and Sainsbury's. Investors reasoned that people will keep eating through the bad times.

Meanwhile, Gordon Brown's comments that Lloyds TSB's takeover of Halifax-owner HBOS was the "right step" gave both banks a lift. Far-east focused Standard Chartered was not so lucky. Worries persist that it may have to raise cash.

Mining casualties littered the battlefield, but recovering metal prices limited the damage. Xstrata suffered most as Anglo American, Rio Tinto and BHP Billiton narrowed losses. Kazakhmys crept into the blue, but Antofagasta rallied hard.

Oil majors BG, BP and Shell were in trouble as oil prices kept tumbling, although that's good news for fuel guzzling cruises giant Carnival. US December crude fell as low as $61.30 a barrel Monday.

On the currency markets, fears that Britain is heading into a deep recession sent sterling tumbling to its lowest in over six years. Talk is that the Bank of England may announce another emergency cut in interest rates ahead of next week's scheduled meeting of the Monetary Policy Committee. The cut could be as much as 1%, say some, although most think 50 basis points is more likely.

Back with equities, and housebuilder Persimmon expects underlying trading results for the full year to be in line with forecasts, but said trading conditions have deteriorated since August's interims. The group has written down the value of its land bank by £600m and now anticipates a 10% fall in prices during the second half.

Insurer Aviva is weaker after JP Morgan cut its price target to 440p from 698p. There are also rumours that it may challenge Prudential to take control of AIG's Asian business.

JP Morgan has raised its ratings on Prudential and RSA Insurance to 'overweight' in a review of the UK insurance sector, meanwhile south African insurer Old Mutual rose after UBS raised its stance on the group.

Panmure Gordon has halved its target price on Rentokil Initial to 30p from 60p in expectation the pest control specialist will be hit by the ongoing market turmoil.

Engineering firm GKN is sharply lower after warning annual pre-tax profits will be lower than expected due to weakening demand from the car industry. The firm, which makes parts for cars and planes, is also planning to axe up to 2,000 staff.

Specialist insurer Hiscox said the recent weakness of sterling against the US dollar has led to material currency gains and currently outweighs any effect from Hurricanes Gustav and Ike. "Currency gains currently outweigh any effect from the hurricanes on our forecast underwriting profit and should overall have a positive impact," said the group.

Household products group Reckitt Benckiser has upped its target for full yaer net revenue growth to 13% from 11-12% previously, with like-for-like growth forecast now up at 9% compared with 7-8% last time. Adjusted net profits for the three months ended September rose to £285m from £254m previously. Net revenue increased to £1.66bn from £1.33bn last time.

Emerging market and natural resource asset management group City of London Investment Group reported a 51% drop in funds under management from $4.7bn at 31 May to $2.3bn as at 23 October. Unaudited pre-tax profits for the first four months of the financial year are down 12% to £2.9m.

Household and personal care products group McBride said third quarter trading was in line with expectations, but reported the impact of higher raw materials costs.

London taxi cab maker Manganese Bronze has received its largest ever international order for 200 taxis by the middle eastern state of Bahrain.
FTSE 100 - Risers
Antofagasta (ANTO) 300.00p +8.50%
British American Tobacco (BATS) 1,596.00p +7.19%
British Sky Broadcasting Group (BSY) 352.00p +6.99%
GlaxoSmithKline (GSK) 1,184.00p +5.01%
Tesco (TSCO) 333.60p +4.91%
Stagecoach Group (SGC) 196.40p +4.80%
Morrison (Wm) Supermarkets (MRW) 231.75p +4.51%
Marks & Spencer Group (MKS) 224.25p +4.42%
Imperial Tobacco Group (IMT) 1,503.00p +4.09%
Cable & Wireless (CW.) 120.90p +3.87%

FTSE 100 - Fallers
Standard Chartered (STAN) 680.00p -10.29%
Xstrata (XTA) 709.00p -8.81%
Petrofac Ltd (PFC) 340.75p -8.71%
John Wood Group (WG.) 174.00p -8.47%
Amec (AMEC) 393.00p -7.80%
Invensys (ISYS) 126.20p -7.55%
Lonmin (LMI) 1,087.00p -7.41%
BG Group (BG.) 664.00p -7.39%
Johnson Matthey (JMAT) 791.50p -7.10%
InterContinental Hotels Group (IHG) 472.25p -7.04%

FTSE 250 - Risers
Inchcape (INCH) 75.75p +22.67%
DSG International (DSGI) 25.75p +18.39%
Hiscox (HSX) 252.00p +13.64%
Debenhams (DEB) 27.25p +12.37%
Daejan Holdings (DJAN) 2,623.00p +10.82%
BlueBay Asset Management (BBAY) 155.00p +7.27%
BSS Group (BTSM) 203.00p +6.84%
Gem Diamonds (GEMD) 252.00p +6.44%
Provident Financial (PFG) 798.00p +5.77%
RIT Capital Partners (RCP) 1,038.00p +5.43%

FTSE 250 - Fallers
Ferrexpo (FXPO) 50.00p -20.95%
Wellstream Holdings (WSM) 333.25p -18.32%
F&C Asset Management (FCAM) 32.50p -17.20%
UK Coal (UKC) 88.25p -15.95%
JKX Oil & Gas (JKX) 141.75p -15.75%
Premier Oil (PMO) 569.00p -14.82%
Marston's (MARS) 85.25p -13.45%
St James's Place (STJ) 148.00p -12.94%
Wincanton (WIN) 160.50p -11.81%
Grainger (GRI) 63.75p -11.46%