News

A strong start by Wall Street gave London renewed impetus in the afternoon, with mining stocks and banks jostling for pride of place at the head of the Footsie leaderboard.

Lonmin and Vedanta were higher on vague bid talk. Vedanta in particular has been the subject of intense speculation that a bid from China is looming recently. The price mentioned is £25 per share. Others talk of a tie up between Anglo American and Xstrata.

Hopes of further rate cuts in the US and at home prompted mark-ups in all the leading banks.

Mitchells and Butlers was under the cosh following its downbeat trading statement yesterday. ABN Amro cut the share to 'hold' from 'buy' with 590p price target.

Rival pub group Marston's moved higher, despite echoing Mitchell & Butler's sentiments this morning. Marston's remains cautious about consumer confidence, regulatory cost pressures and the short-term impact of the smoking ban. Underlying profit before taxation was for the year to September was £98m, down from £101.5m, with pre-tax profit down to £94.7m.

Satellite broadcaster BSkyB fell to earth as Goldman Sachs cut the shares to 'sell' from 'neutral' and reduced its average revenue per user (ARPU), net additions and advertising growth assumptions for the group. The broker also lowered the price target to 600p from 720p.

Water group Severn Trent has been downgraded by Deutsche Bank to 'hold' from 'buy' with price target kept at 1,500p following the recent rally on sector consolidation hopes, though Sage is posting decent gains after a Morgan Stanley upgrade.

Away from Footsie, shares in Colt Telecom surged on a report that its major shareholder Fidelity Investments was trying to persuade AT&T to buy the company for 300p a share.

Laundry services provider Johnson Service Group has seen its share price halve over the last month after it said it expected to breach its banking covenants, but it recovered sharply today after rescinding its decision to pay a 3p interim dividend.

Eni's pursuit of Burren Energy finally paid off today as the Italian giant secured agreement from the Burren board for a 1230p per share cash offer for the company.

Bid target Interactive Prospect Targeting was wanted after it was revealed that Morgan Stanley has built up a 13.58% stake in the company.

Management buy out candidate Premier Research slumped today after it announced that some projects previously expected to generate around £3m of top line revenue in the current year have delayed starting dates and thus will not contribute to this year's revenues.

IT recruiter SThree forecast profit before tax for the year to November will be approximately £3m (circa 5%) below consensus estimates due to one-off costs of a new ERP installation. Full-year gross profit will rise by 31% to not less than £178m.

Heavy restructuring costs and rising input prices sent interim profits at plastics packaging firm RPC slumping from £12.9m to £3.7m. Operating profits were flat at £18.7m. The group added that the second half had started well but input costs remain unpredictable and a concern.

Computer products distributor Fayrewood today admitted it is in talks which may or may not lead to an offer being made for all or part of the company.

Among the small caps, hopes that bid talks will lead to a formal offer kept space software group Vega bubbling while telecoms group KCOM rallied following results this week.

FTSE 100 - Risers
Standard Chartered (STAN) 1,914.00p +6.57%
Alliance & Leicester (AL.) 730.00p +6.41%
Tullow Oil (TLW) 671.00p +5.59%
Vedanta Resources (VED) 2,304.00p +5.11%
Standard Life (SL.) 262.50p +4.90%
Wolseley (WOS) 694.50p +4.59%
Lloyds TSB Group (LLOY) 495.00p +4.43%
Barclays (BARC) 563.00p +4.26%
Anglo American (AAL) 3,286.00p +4.19%
Royal Bank of Scotland Group (RBS) 459.00p +3.55%

FTSE 100 - Fallers
Kingfisher (KGF) 152.30p -3.42%
Diageo (DGE) 1,093.00p -2.06%
Invesco (IVZ) 627.50p -2.03%
BAE Systems (BA.) 460.00p -1.97%
Marks & Spencer Group (MKS) 583.50p -1.85%
Enterprise Inns (ETI) 532.00p -1.85%
Whitbread (WTB) 1,441.00p -1.50%
British Sky Broadcasting Group (BSY) 625.00p -1.50%
Mitchells & Butlers (MAB) 577.00p -1.45%
Punch Taverns (PUB) 821.00p -1.02%

FTSE 250 - Risers
COLT Telecom Group S.A. (COLT) 182.25p +17.96%
Wellstream Holdings (WSM) 1,047.00p +10.09%
Moneysupermarket.com (MONY) 180.50p +9.89%
Burren Energy (BUR) 1,249.00p +9.37%
Imperial Energy Corporation (IEC) 1,403.00p +8.26%
Big Yellow Group (BYG) 465.25p +7.32%
Euromoney Institutional Investor (ERM) 404.25p +7.23%
Hargreaves Lansdown (HL.) 216.25p +6.66%
PZ Cussons (PZC) 217.00p +6.63%
Game Group (GMG) 197.00p +6.49%

FTSE 250 - Fallers
RPS Group (RPS) 302.00p -7.01%
Rank Group (RNK) 100.50p -6.94%
Morgan Sindall (MGNS) 1,208.00p -5.63%
FKI (FKI) 77.25p -5.21%
Galiform (GFRM) 93.75p -4.58%
Keller Group (KLR) 813.00p -4.41%
Hochschild Mining (HOC) 440.00p -4.35%
Signet Group (SIG) 62.50p -3.85%
Filtrona PLC (FLTR) 222.75p -3.68%
Drax Group (DRX) 682.50p -3.53%