News

London took centre stage with US markets closed for Thanksgiving Day and a good afternoon session for the miners and oil stocks sent the index higher.

The resources tock rally followed in the wake of yesterday's dramatic interest rate cut by China. The Chinese economy has been struggling to get into gear after going into stand-by mode prior to the Olympics, and the authorities hope 108 basis points cut in one-year lending and deposit rates will reignite growth, which, in turn, will boost demand for resources.

Fresnillo, Xstrata and Kazakhmys lead the miners higher while Tullow Oil is the pick of the oil sector.

On the flip side, BHP Billiton, facing shareholders for the first time since scrapping its bid for rival Rio Tinto at today's AGM, warned that uncertainty in world markets was set to continue in the short term.

Banks rallied led by Asia-focused Standard Chartered after Collins Stewart issued a "buy" recommendation. The broker says the bank is trading at 1.3 times its post-rights issue tangible book value, a level below which the bank's share price has rarely strayed in the last 20 years. HBOS, Lloyds TSB, Royal Bank of Scotland moved up in sympathy.

South African insurer Old Mutual has dropped the sale of Mutual & Federal Insurance due to the current difficult economic conditions. The group had engaged in talks to sell its entire shareholding in the arm and recently selected a short list of bidders. Peers Friends Provident, Legal & General and RSA also posted good gains.

TUI Travel reported a 43% hike in underlying profit before tax for the year ended 30 September to £319.7m on revenue up 9% to £13.9bn. Analysts had expected profits of £315m and revenue of £13.5bn. It said winter 2008/09 trading is progressing well.

Developments in the retail world remain bleak. DIY retailer Kingfisher dropped after revealing third quarter retail profit fell 4% to £176m on flat retail sales of £2.6bn, but down 5.1% on a like-for-like basis.

DSG International recorded an underlying loss before tax of £29.8m in the 24 weeks to 18 October, marginally lower than the £30m loss predicted by analysts. The company has decided not to recommend payment of an interim dividend in order to conserve cash.

Mail order business Findel more than halved dividends as it looks to preserve cash despite profits more than doubling in the half-year.

Pick 'n' mix retailer Woolworths confirmed today it has put its retail and distribution businesses into administration after talks relating to a potential sale came to nothing. Woolworths Group plc (the company) is not in administration and remains in talks with BBC Worldwide regarding the possible sale of its 40% interest in DVD publisher 2 Entertain Ltd.

The short term effect of Woolworths going into administration could be a savage session of price cuts that will hit competitors in the crucial Christmas trading period. Broker Singer Capital Markets has identified Clinton Cards, WH Smith, Dunelm, Findel, HMV, Game, Mothercare and Thornton's as being among the retailers finding themselves in an unwelcome price war as Woolworth's administrators try to raise cash by generating sales through drastic price cuts.

Taylor Wimpey was the best performing FTSE 250 stock in a housebuilding sector that also sees Barratt Developments advance after a less gloomy than usual report from the Nationwide building society on UK house price trends. On an annual basis prices fell 13.9% in November, better than the 14.6% reported the month before.

Redrow defies the trend, however, falling heavily after broker KBC Peel Hunt said the housebuilder's shares look overvalued. "At 205p they are too close to the NAV of 252p, a discount of 19%. Better run peers trade at a 30-40% discount," KBC Peel Hunt said.

News that BlueBay Asset Management intends to close its BlueBay Emerging Market Total Return fund due to the challenging market conditions sent its shares plunging.

Pennon Group saw underlying profit before tax grow by 3.2% during the first half and says both its businesses are well positioned in the current economic slow-down.

Residential property group Grainger took heart from a rise in sales in residential property even as its net asset value slumped by around a third.

IT and business services company Logica also improved on news its has replaced around half of its existing bank facilities with two new arrangements maturing in 2011 and 2013.

Real estate investment trust McKay Securities saw its net asset value per share dive in the first half of its financial year, as the commercial property sector's slump worsened. Net asset value per share at the end of September was 351p, down from 487p a year earlier.

FTSE 100 - Risers
Xstrata (XTA) 959.00p +12.23%
Kazakhmys (KAZ) 269.00p +11.62%
Standard Chartered (STAN) 766.00p +11.55%
Wolseley (WOS) 298.75p +10.96%
Vedanta Resources (VED) 612.50p +10.76%

FTSE 100 - Fallers
Centrica (CNA) 232.00p -3.33%
AstraZeneca (AZN) 2,322.00p -2.60%
Standard Life (SL.) 254.75p -2.49%
Kingfisher (KGF) 116.60p -2.43%
British American Tobacco (BATS) 1,692.00p -2.25%

FTSE 250 - Risers
Taylor Wimpey (TW.) 10.00p +73.01%
UK Coal (UKC) 79.00p +38.60%
Inchcape (INCH) 61.25p +30.32%
Cookson Group (CKSN) 102.75p +24.92%
Marston's (MARS) 103.00p +22.62%

FTSE 250 - Fallers
BlueBay Asset Management (BBAY) 70.00p -30.00%
DSG International (DSGI) 12.50p -10.71%
Elementis (ELM) 44.00p -8.81%
BSS Group (BTSM) 246.50p -6.63%
Melrose Resources (MRS) 205.00p -5.96%