News

London's revival is running out of puff, despite indications that Wall Street will open higher this afternoon.

Banks are still going well despite mixed views on their appeal. US bank Citicorp has upgraded UK banks to "neutral" from "underweight" whereas fellow US bank Goldman Sachs has cut its price targets for some of the sector's big names; Barclays has been cut from 390p to 250p, Lloyds' price target has been slashed from 270p to 170p, Royal Bank of Scotland's price target has been virtually halved from 240p to 140p while HBOS's price is projected at 140p versus a previous valuation of 220p.

Investors are generally upbeat on banking shares today with HBOS adding about one-third to its overnight value and RBS up by about one-sixth.

Barclays is a faller, however, on reports it is talking to existing investors about raising £3bn through a preference share issue.

The round of interest rate cuts and, perhaps more significantly from a psychological standpoint, the fact that government agencies worldwide are working in harmony to stabilise markets, has boosted oil and metal prices. Resource stocks such as Cairn Energy, ENRC, Antofagasta and Tullow Oil are back in favour.

Conversely, defensive favourites such as Scottish & Southern Energy, National Grid and Tesco get the cold shoulder from investors.

Tesco's rival, Sainsbury, however, bounces back strongly today from the hammering it received yesterday after it emerged that Robert Tchenguiz's 10% stake was up for grabs at 250 per share. Dutch financial services company ING has upgraded the supermarket chain from "sell" to "hold" in the belief that the sale of the Robert Tchenguiz stake will prove beneficial to the stock price performance.

Oilfield services company Wood Group said its trading performance for the year to date has been strong and it expects growth to continue. "Demand for our services and products remains high, despite the significant current volatility in financial, commodity and currency markets," said the group.

Insurer Aviva said is capital position remains strong in the face of the recent market turmoil, adding that it has protected itself against further falls in the equity markets through increased hedges. Fellow insurer Standard Life fares less well, however, and is the biggest faller among Footsie stocks.

Full year profits at newsagent WH Smith were pretty much in line with expectations, rising 15% before tax and exceptional items to £76m, although like for like sales fell 2%.

Construction and support services firm Carillion is also going well as it continues to expect strong progress in 2008 and to deliver materially enhanced earnings in 2009. "Overall, our principal businesses continue to perform well and the intake of good quality new orders remains strong," said the group.

Greggs has trimmed earlier losses but is still one of the big fallers among FTSE 250 stocks. The bakery chain cut its full-year operating profit forecasts by some £3m following a period of slower sales growth and higher costs, prompting broker Brewin Dolphin to cut pre-tax profit forecast for next year by £3.5m to £48.5m. The broker maintains its "add" rating for the stock.

Communications technology group Spirent has traded as predicted during its third quarter. In a short statement, the firm, which tests phone and broadband connections, said: "Trading for the period since 29 June 2008 is in line with the board's expectations".

Recruitment firm Hays said the 10% net fee growth, 4% on a like-for-like basis, for the quarter to September represents a solid start to the year despite the increasing difficult economic environment. The difference between the headline and like-for-like growth rate is due to the more favourable euro and Australian dollar exchange rates.

Weir advanced after the engineer said it expects profits from continuing operations before intangibles to be slightly ahead of guidance thanks to foreign exchange benefits. Stockbroker Numis Securities has raised its rating on the stock following the update, from "add" to "buy", in the belief the virtual halving of the stock's share over the last five weeks has been overdone. Numis has a price target of 660p for Weir.

Production for the nine months ended 30 September met expectations at Fresnillo and the Mexican silver miner and recent Footsie entrant is confident of hitting its 2008 production target. Output came in at 26.4 million silver ounces, higher than the September 2007 quarter due to an increase in ore milled and higher ore grade at Fresnillo.

Touch screen maker Feedback slumps after revealing that first three months of the current year have started slowly, although profitably.

FTSE 100 - Risers
HBOS (HBOS) 149.80p +28.03%
Cairn Energy (CNE) 1,573.00p +15.58%
Royal Bank of Scotland Group (RBS) 104.70p +15.44%
Eurasian Natural Resources (ENRC) 512.50p +13.89%
Man Group (EMG) 331.50p +10.50%
Aviva (AV.) 451.00p +10.07%
Antofagasta (ANTO) 329.25p +9.20%
Amec (AMEC) 549.50p +9.03%
Schroders NV (SDRC) 815.50p +8.73%
Tullow Oil (TLW) 524.50p +8.70%

FTSE 100 - Fallers
Standard Life (SL.) 223.25p -12.96%
National Grid (NG.) 630.50p -5.19%
London Stock Exchange Group (LSE) 675.50p -5.19%
Barclays (BARC) 264.75p -4.85%
Scottish & Southern Energy (SSE) 1,242.00p -4.17%
Pearson (PSON) 549.00p -3.60%
International Power (IPR) 284.25p -3.07%
Tesco (TSCO) 370.80p -2.70%
GlaxoSmithKline (GSK) 1,125.00p -2.34%
Drax Group (DRX) 668.00p -2.34%