Market Wrap, Tuesday 29th April 2008

The FTSE closed just a point down at 6,089.4 today, which was about 44 points off the day’s high, and about 38 points up from the low.  The FTSE 250 closed down 110.1 points at 10,007.4.

By the time London closed, the DJI was about 30 points down at 12,842, whilst the S&P500 was down about 5 points at 1,400, and the Nasdaq down about 6 points at 2,418. The Feds announce their interest rate decision tomorrow, and the feeling is one of caution after the economic data was fairly poor.  The Standard & Poor’s & Case Shiller home price index, which is for 20 cities, was down by 12.7% for February compared to last year, which is the worst figure since the index began in 2001. The US Conference Board’s Consumer Confidence Index came in at 62.3 in April, down from the revised 65.9 in March, but better than the 61.0 expected.  However, this was still the weakest figure since March 2003.

Back here in London, the oil majors had the best day after both announcing decent 1st quarter figures. RD Shell closed up 112p at 2,035 after reporting a 25% rise in 1st quarter earnings, whilst BP closed up 34.5p at 613 after reporting a 63% rise in earnings.  The BP figures were much better than expected. Peer BG Group closed up 10p at 1,308 on the back of the Shell & BP figures.

Insurance giant Friends Provident closed up 1p at 118.2 after an update that said its 1st quarter sales were up 11% on last year, which prompted Panmure Gordon to reiterate its ‘buy’ stance.  Peer Admiral Group closed up 6.5p at 820.5 after also giving an upbeat trading statement in which it said its 1st quarter sales were up 14% on last year and it is on for full-year results at least in line with market expectations.

On to the banks, especially HBOS, where the proposed (or alleged) £4 bln rights issue was finally confirmed. The shares closed down 9p at just shy of 487p, despite starting the day positive. The bank said the rights issue was to build its reserves in preparation for a more challenging macroeconomic environment. This prompted broker Collins Stewart to reiterate its ’sell’ stance. Peers were also down, with RBS clsoing down nearly 4p at just shy of 351p, and Barclays down 10.5p at 460p. barclays has yet to confirm a rights issue, which has been rumoured for a week or two now.

The miners also didn’t do very well after Anglo gave a rather mediocre trading update.  Gold and other metals fell, adding to the gloom.   Anglo closed down 92p at 3,249 after it its said platinum and coal production fell in the 1st quarter, but blamed flooding and electricity problems in South Africa for most of the fall. This prompted Citigroup to downgrade Anglo to ‘hold’ from ‘buy’. Peers were down too, with Kazakhmys having the worst day, closing down 77p to 1,648, whilst BHP closed down 59p at 1,818, and Rio closed down 216p at 6,010.

Pearson closed down 10p at 648p after Credit Suisse told clinets to move into Reed Elsevier as it reckons pearson will suffer in the US, where nearly 40% of its revenue comes from schools, which are having their budgets tightened. Pearson’s US peer McGraw-Hill announced a 1st quarter drop in profit by 44%, which obviously didn’t help. Thomson Reuters, recent joiner of the FTSE 100, closed down 10p at 1,583. They give an update this Thursday.

ARM Holdings closed up 11.5p at a quid-even after annoucning 1st quarter profits fairly flat, but adding that sales growth in 2008 would be simlar to 2007. Broker Arbuthnot reiterated its ‘neutral’ rating and 90p target for ARM.

Game Group closed up over 12p at 264.5p after reporting a 156% rise in underlying pre-tax profit and adding that trading so far in the current year was strong. This prompted ABN Amro to upgarde the computer games group to ‘buy’ from ‘hold’.

Pub group JD Wetherspoon closed up 4p to 273p after an update which said that sales were down just 0.1% this last quarter. Broker Dresdner Kleinwort gave an upgrade to ‘add’ from ‘hold’, whilst broker Altium raised its rating to ‘buy’ from ‘hold’.

Premier Foods closed down just over 7p at 126.5p after a UBS downgrade to ‘neutral’ from ‘buy’ citing valuation grounds.

Genus closed down 48p to 795p after an update in which it said that whilst its dairy semen area was still strong, other areas of its business for non-dairy was challenging. This prompted a Panmure Gordon downgrade to ‘hold’ from ‘buy’.

Taylor Nelson closed up 33p to 204p after confirming it’s in talks with Germany’s GfK about a possible merger. This prompted Investec to upgrade TNS to ‘buy’ from ‘hold’ and add a 230p target, up from 197p.