News

London equities made strong progress in the morning following Wall Street's record overnight advance. The FTSE's rise has been nowhere close to record-breaking, however, with traders mindful of indications of a more subdued opening on Wall Street today where the Dow Jones is expected to start 34 points or so higher.

The continued downward trend of the London Inter-Bank Offered Rate (LIBOR) - the rate at which banks are prepared to lend to each other - is encouraging the optimists to believe that the worst days of the liquidity crisis are behind us.

Financials respond accordingly, with insurance giant Aviva adding to yesterday's gains that were made in the wake of a strong third quarter trading update. South African insurer Old Mutual also registers a double-digit percentage gain. The Financial Services Authority is said to be looking at ways to make life easier for insurers by easing rules on accounting and capital requirements, according to The Times newspaper.

Banks are wanted on hopes of another round of interest rate cuts by central banks worldwide; the Federal Open Market Committee is meeting today and is widely expected to announce a cut of half a percentage point in the key US lending rate.

HBOS continues to close the gap between its trading price and the value implied by Lloyds TSB's all-share offer. HBOS is reportedly planning a two-year euro benchmark bond backed by the UK government's guarantee.

Standard Chartered advances strongly despite a mixed reception from brokers to yesterday's results. Citigroup has cut its price target for the Asia-focused bank from 750p to 650p, and recommends selling the shares, while Credit Suisse has downgraded its rating to "neutral" from "out-perform" and has cut its target price from 1600p to 1000p. UBS is a fan of the stock, however, and has upgraded it to "buy" from "neutral".

Oil and gas firm Cairn Energy reported production of 74,000 barrels of oil equivalent a day in the third quarter. The Edinburgh-based firm, whose operations are in India, Tunisia, Albania and elsewhere, said it achieved an average price of $70.06 a barrel of oil equivalent in the period.

Iron ore pellet producer Ferrexpo slumps after warning that a significant reduction in both steel demand and output would depress its sales by around 5% to 10% in 2008.

Stagecoach is a rare blue-chip faller, despite reporting sharply higher revenues in most of its bus and rail divisions. In the 24 weeks to October 28 like-for-like UK bus revenues were up 9.2% from the same period a year ago while like-for-like UK rail turnover climbed 8.3%. Broker Investec rates the shares a "hold" and has set a price target of 250p for the stock.

Bluetooth specialist CSR reported third quarter revenue in line with previous guidance at $205.5m, but warned that fourth quarter revenue could fall as low as $140m.

Environmental consultancy group RPS said the robust trend has continued and it remains well positioned to deliver results for the full year in line with expectations. Broker KBC Peel Hunt likes the stock and has retained its "buy" recommendation. "The acquisition pipeline remains healthy and more transactions are expected in H2 2008. In light of recent share price falls we remain positive on the shares and retain our buy recommendation," said KBC analyst Andrew Nussey.

Oil and gas firm Melrose Resources has reduced its 2008 net entitlement production guidance due to a series of delays. The group said it is "prudent to reduce its 2008 net entitlement production guidance from 19,200 boepd (barrels of oil per day) to 18,300 boepd."

A subsidiary of the mainland European newspaper giant Mecom is to dispose of its interest in the Dutch search engine ilocal after the business failed to achieve profitability. Koninklijke Wegener had bought 49% of ilocal Holding from Yellow Bear Holding as well as a 17.5% minority interest in ilocal International.

Communisis continues to trade "comfortably" in line with the market's profit expectations for the full year. It reported some change in its revenue mix during the third quarter.

Warner Bros will buy shares in SCi Entertainment "if and when it considers appropriate" it said in response to SCi's decision earlier this week to waive a restriction on further share buying before 25 January next year.

WorldSpreads Group more than doubled profit during the six months ended 30 September and remains on course to top full year targets as it benefits from extreme market volatility.

Managed Support Services, which provides building services, said full year figures will "comfortably exceed" current market expectations. The group upped its guidance for the year after it saw "good" first half trading.

Clean fuel technology firm Oxford Catalysts has confirmed it is in advanced discussions to buy a larger company which may require a placing to fund the deal. "Should the company proceed with the acquisition, it would be classified as a reverse takeover," said the AIM-listed firm.

Recruitment firm Hays is wanted after being upgraded by UBS from "sell" to "neutral".

FTSE 100 - Risers
Old Mutual (OML) 49.00p +25.64%
Aviva (AV.) 320.75p +23.84%
Standard Chartered (STAN) 851.50p +21.64%
HBOS (HBOS) 82.00p +19.53%
Xstrata (XTA) 839.00p +18.34%
Anglo American (AAL) 1,346.00p +17.97%
Fresnillo (FRES) 120.70p +14.30%
Lloyds TSB Group (LLOY) 185.30p +14.03%
Royal Bank of Scotland Group (RBS) 64.30p +13.20%
Kazakhmys (KAZ) 262.75p +12.77%

FTSE 100 - Fallers
Friends Provident (FP.) 59.70p -8.15%
British American Tobacco (BATS) 1,756.00p -2.44%
Stagecoach Group (SGC) 201.75p -1.82%
Liberty International (LII) 626.50p -0.95%
FirstGroup (FGP) 419.50p +0.06%
GlaxoSmithKline (GSK) 1,170.00p +0.43%
Tesco (TSCO) 320.10p +0.47%
British Energy Group (BGY) 729.00p +0.55%
RSA Insurance Group (RSA) 133.70p +0.60%
Admiral Group (ADM) 875.00p +0.75%