Market Wrap 20/02/08

The FTSE closed down 73.3 points today at 5,893.6, up about 45 points from its low of the day, and down about 70 points from its high, whilst the FTSE 250 closed down 84.2 points at 10,124.4. It was a good day in the office with 3 decent trades on the FTSe itself.

The amrket suffered due to Alliance & Leicester, according to the various guys we’ve been talking to. We reckon the A&L figures have been ‘in the air’ for some time now - just read the recent blogs. Anyway, we can always blame the Ya… sorry, Americans, as their inflation figures were worse than anticipated today.

Which brings us to the other side of the pond, where we saw some negative feelings due to the inflation figures as a sharp rise in food costs for January, causing the Feds to admit that it was the highest annual increase in food prices in almost twenty years. Yes, 20 years - meaning annual inlation was at its highest for over two years. The US housing data added to the woe, with disappointing figures there giving a really negative atmosphere across the US markets. By the time London closed the DJI was down about 70 points at 12,268, whilst the S&P500 was down about 8 points at 1,341 and the Nasdaq off about 9 points at 2,297.

back here in London, and as we mentioned this morning and in the header, it was mortgage bank Alliance & Leicester that set trh tone for the day, and ended up closing down 36p at 492p after it reported an expected 29% fall in 2007 operating profit, with large write-downs on its debt-backed investments. Broker ’sell’ shouts rang round with a 6-quid target, down from 655p. The larger peers took pressure too, with HBOS closing down 12.5p at 646.5p, Lloyds TSB down 4p at 428 and Bradford & Bingley slipping down over a penny at 181p.

Housebuilders followed as a broker downgrade on the sector to ’sell’ saw Taylor Wimpey close down 13.9p at 166.2p, Persimmons close down 4.5p at 705.5p, Bovis close down 37p at 556.5p, Barratts off nearly 18p at 389p and Bellway off 31p at 769p.

Kingfishers alos closed down 4.7p at 132p after JP Morgan downgraded the retailer to ‘underweight’ from ‘neutral’ and lowered the target to 135p, down from 144p. A trading statement is due tomorrow.

Wolseley closed down 25p at 653.5 on another broker’s downgrade with a 540p target, down from 610p.

Johnson Matthey closed down 71p at 1,930 on a Bear Stearns equal rating.

Miners faired better, with bid-rumoured Xstrata closing up 57p at 3,946 giving strength to peer Anglo, who rebounded from earlier losses, closing up 14p at 3,161 after it announced it will receive new order mining rights for all of its operations in South Africa. This was on top of it posting record full-year underlying earnings, which were in-line with market expectations, and another binus of US$380m cost savings for last year too. Peers liked all this, with Kazakhmys closing up 40p at 1,488 and Vedanta up 45p at 2,218. Lesser traded Rexam had a good day too, closing up over 20p at 442.25p on the back of its annual figures that were ahead of expectations. Broker Seymour Pierce upped its rating to ‘buy’ from ‘outperform’.

Scottish & Newcastle closed up just shy of 20p on the day at 807.5 due to some more M&A rumours that SABMiller is sniffing with intent of a 8-and-a-half-quid bid.