Market Wrap, Thursday 27th March 2008

The FTSE closed up today, finishing at 5,717.5, up 57.1 points on the day, but down from the session high of 5,735. The FTSE 250 closed at 9,982, up 225.9 on the day. That’s been quite a run up since the rcent lows a couple of weeks ago. Not sure how far more we go in the short-term, but it does show some confidence is returning. We will say that we feel there will be a shaking up of the markets and a re-levelling of the playing field. Fundamentals, genuine fundamentals, need to be used when these companies are being valued.

Over the pond it was also in positive territory, and by the time London closed the DJI was up 21 points at 12,444, whilst the S&P500 was marginally down, off 3 points at 1,338, and the Nasdaq was also down, off 17 points at 2,307. Rumours that one of the US banks could be looking at a Chapter 11 situation had a few traders concerned. We’ll have to wait and see if we get a confirmation on that, which would have seemed unthinkable this time last year, or even 6 months ago.

Back here in London it was Compass Group, the catering giant, that was singing today. The old ‘turkey twizzler feeder to school kids now come good’ was boasting of a decent set of figures. After revamping the business, selling off smaller subsidiaries, and changing the school menus in answer to Jamie Oliver, it was now paying dividends (pun intended). After refusing to speak to any school authority that won’t pay a minimum of 55p a meal, it has upped its standards. Compass closed up 11p at 321.5p after it said that the first 5 months of its current financial year were showing better than expected figures, and it was sure this strength would continue for the rest of the year.

Oil. Up. Climbing again. Expensive. But we won’t go on about it. Some benefits are for shareholders, of course, and Cairn Energy was u 130p at 2,816 after news that US stockpiles were down and that there was some serious fire-fighting going on in Iraq.

On the banks, where Barclays faired the best as Merrills said it was on its favourite list. Or preferred list, as they call it. Barclays closed up 8.5p at 453.25p after the broker said it was cheap at the current level. merrills also said it reckoned the Bank of England would take some action to help the sector. Just like the Feds did over the pond. Mind you, not sure the help helped, so to speak. Well, not yet, anyway. Peer HBOS was up yet again, closing at 557.5p, up 16p on the day. Those naughty schoolboys that shorted the bank on those nasty rumours last week are still being hunted. We’re up from the 425p low of that day in question to a channel, climbing from the 550p level now.

Staying with the financial sector, Hedge Fund Manager Man Group closed up 14.5p at 560p after it said its profits for the year would be growing by a very healthy 40%, way above expectations.

FirstGroup closed up 22p at 566.5p on news it would meet expectations, and added that it expected a strong performance to continue. Merrills reiterated its ‘buy’ stance.

Builders and plumbers merchant Wolseley closed up another 25p to 552p on the back of a Goldman Sachs upgrade to ‘neutral’ from ’sell’ and added that it thinks its on the bottom, with all the bad news built in to the share price now.

On to the housebuilders where Persimmons closed up 52p at 789.5, Bellway up 96p at 885p, Barratts up nearly 31p at 438p and Redrow closed up 25.5p at 314.5.

Kingfisher closed down 4.7p at 130.4 after halving its final divvy payment, and said it expected to do the same with the next interim payment too.

Rentokil Initial closed up 8.5p at 96p on a broker upgrade, with Merrills giving it a ‘buy’ rating and 120p target, with the new management getting the thumbs up, it seems, after the stock has had a somewhat hard time of late.