News

London's rally has fizzled out, with losses on miners and properties counter-balanced by gains on oils, as the market awaits a lead from the US, where consumer prices data is expected to be released at 1:30pm today.

Miners are the big losers today after Goldman Sachs produced a review of the sector. The investment bank downgraded Vedanta to 'sell' from 'neutral' and cut its price target to 2,240p from 2,545p and dropped its target on Lonmin to 3,675p from 3,900p. Xtrata had its price target cut to 4,335p from 4,50pp.

Northern Rock is the best performer after Virgin Group was stripped of its preferred bidder status last night after rival Olivant threatened to walk away unless it was put on an equal footing with Sir Richard Branson's company.

Rentokil has also rallied a little after yesterday's beating on its warning about its parcels division, while Rexam is another attracting bargain hunters after the can maker's share price crumpled yesterday. HBOS, however, sees more losses piled on to yesterday's reverses.

Shire edges higher on a buy recommendation from Merrill Lynch, with a 1370p price target.

British Gas owner Centrica says 2007 pre-tax results are in line with expectations when the impact of the Humber power station lease prepayment is excluded, with the reduction in UK residential margins in the second half of the year offset by the stronger performance from Centrica Energy and a lower underlying interest charge. Higher upstream earnings will push the tax rate up to about 40%.

Elsewhere, overall trading for the second half is in line with expectations at publisher United Business Media, with underlying revenue growth seen at between 6% and 7%, significantly ahead of the first half, it says.

Fellow media company Burst Media is punished, however, after confirming that full year profits will be lower than expected, primarily due to poor performance by the Burst Network.

Film distribution company Works Media gets a lift from news that its chairman has purchased a million shares to raise his stake to 21.22%.

Investors have an appetite for Northern Foods this morning after the group announced its intention to buy back up to 5% of its issued ordinary shares. The buy-back will be financed from existing bank facilities. The group said that since its half year results were announced on 13 November it has continued to make steady progress across its businesses.

Laundry and workwear company Davis Service has had a good first three quarters and reckons full year revenue growth will top 15%. Broker Investec has set a price target of 565p following the trading update.

Semiconductor group Wolfson Microelectronics is sharply lower after Goldman Sachs changed its verdict on the stock from "neutral" to "sell", and set a 9-month price target of 180p.

Outsource specialist Xchanging expects its trading performance for 2007 will be in line with expectations. "Based on the high degree of visibility of 2008 revenues from existing contracts and our pipeline of opportunities, Xchanging looks forward to continued strong growth in the year ahead," it added.

PartyGaming's financial performance in the fourth quarter to-date has been in line with expectations, the online gambling group said in a brief update. It added that the group remains confident about the prospects for the current year. In October, the company reported a 24% hike in the third quarter revenue to $115.7m, helped by strong growth in casino games where sales rallied by 158% to $36.7m.

US-based children's entertainment company DIC Entertainment has lost more than half its value on news that results for 2007 will not meet current market expectations. The shortfall in profits is "solely due to the decision to take non-cash write-downs in the carrying values of certain properties contained in the company's animation library," the company said.

Vehicle tracking company Trakm8 lost its way after swinging into a pre-tax loss at the half year stage due to delays in orders and the impact of problems with a component supplier.

Foods group Ukrproduct is in demand after revealing its trading performance in the second half is ahead of management's expectations with expected profit after tax for the year likely to reach £3 million.

Product testing business Inspicio has agreed a cash offer worth 225p per share from Angus Newco. The offer values Inspicio at approximately £229m.

Japanese insurer Tokio Marine and Nichido Fire Insurance has made a £442.2m, 150p per share, bid for Lloyds of London insurer Kiln.

Retail software group NSB Retail is going well after it announced a bid approach just before the close of play last night.

IT solution provider Electronic Data Processing is wanted after it ramped up pre-tax profit by 57% and said it is seeing increased demand for its software products and hosting services.