Market Wrap, Wednesday 4th June 2008

The FTSE closed down 87.6 poinst today at 5,970.1, which was up about 37 points from the day’s low, whilst the FTSE 250 closed down 10 points at 9,976.9.

Over the pond, by the time London closed the DJI was actually up about 85 points at 12,488, wjilst the S&P500 was up 8 points at 1m385, and the Nasdaq up 34 points at 2,514.  The non-farm payroll figures cam ein better than expected, giving temporary relief from the woes of the banking sector, where Lehman Brothers said they are raising US$4 bln in a right issue.

Back here in London, it was the miners who were taking a bit of a psting as commodity metal prices were lower, as too was oil.  ENRC closed down 48p at 1,319, Kazakhmys down 66p at 1,670, Vedanta down 102p at 2,322, and Antofagastadown 14.5p at 674.5p.

AS mentioned, oil was off its recent highs, now around the US$124 bbl level, cauisng oil heavyweights to pull back somewhat.  BP closed down 23.5p at 581p, RD Shell down 60p at 2,024p, and BG Group closed down 35p at 1,230p.

Mind you, the fall in the price of the black stuff helped the airlines, with British Airways up 13p at just shy of 244p a share, having recovered from the recent lows quite well.  The airline announced longhaul premium traffic was slightly up from last year, but added that short haul premium and long haul non-premium traffic remained weak. This was still better than expected.  Its orange coloured peer, easyJet, closed up 19.5p at just shy of 315p on the back of its big competitor’s news, as well as the lower oil price of course.

As we mentioend this morning, some bigger stocks went ex-divvy, causing the yield equivalent in the shareprice to come out.  This took about 15 poiints off the FTSE level today.  Those going ex-div included: Vodafone, whioch closed down 8.1p at 154.65 and National Grid, which closed down 28.5p at 720p.

On to the financials, where the Lehman Bros news was taken hard.  Lehman fell 10% on the rights issue news, with many saying further bad news is to come elsewhere in the sector. UK banks were mainly down, with HBOS closing down over 11p at 340.5p,, and Barclays closing down over 8p at 352p.  But Alliance & Leicester was up over 12p at 412.5p as rumours that the US private equity group, Texas Pacific, will be looking to take positions in more UK banks that Bradford & Bingley.  RBS also did well, as Morgan Stanley upgraded the recently under pressure bank to ‘overweight’ from ‘underweight’, giving the sahres a needed boost of nearly 5p to 249.5p.

On to retail groups, where B&Q owner Kingfisher closed down nearly 3p at 135.9p despite being up this morning after reporting a better than expected 9% rise in 1st quarter profits.

Housebuilders had a poor day again, with Persimmons closing down over a penny at just shy of 455p after a UBS downgrade to ’sell’, Bellway down 9p to 594p, and Redrow down 9.25p at 214p.

Rumours of a management buyout at Rentokill saw the shares close up 2.5p at a quid a pop.