19 Mar, 2008
Early rally peters out with banks under pressure
(Update) The early rally that followed Wall Street's overnight
surge on the latest Fed rate cut has quickly run out of steam as
liquidity concerns return to haunt the banks.
HBOS was singled out at 434p, down 45p, prompting Britain's
leading mortgage lender to refute rumours that it had turned to the
Bank of England for funding as 'complete and utter
Other lenders were also under the cosh again with Alliance &
Leicester at 497p and Royal Bank of Scotland 312p, down 18p and
In the jittery atmosphere the Bank of England was forced to quash a
rumour that Easter leave for Monetary Policy Committee members had
Shares generally turned sour as investors rushed to take profits
after yesterday's euphoric advance.
By 10am the FTSE 100 index was down 51 points at 5,553 and the
Mid-250 index 119 points weaker at 9,483.
In Europe the German DAX was just 11 points firmer.. but the CAC-40
in France was eight points adrift.
On the economic front the Bank of England Monetary Policy Committee
voted 7-2 to keep interest rates on hold at 5.75% earlier this
month, while UK unemployment fell again in February, but at its
slowest rate for 15 months.
Mining shares managed to cling on to some of their initial rises
with Anglo American up 55p to £30.65 and Xstrata 28p better
An HSBC rating upgrade lifted AstraZeneca at £18.15, up 26p,
while others to resist the trend included Experian at 373p, 3i
Group 781p, Reckitt Benckiser £26.94 and SABMiller
£10.35, all around 13p firmer.
Favourable trading statements underpinned ICAP at 558p, up 7p,
Premier Farnell at 152.5p, up 10.5p and Smiths Group, 16p
better at 963p, but Next tumbled 61p to £11.18 on its
cautious oulook, unsettling other retailers.
Profit warnings knocked between 10p and 59p from easyJet at 316p,
DTZ 215p, Hogg Robinson 43.5p and Delcam 275p and Mitchells &
Butlers receded 34.5p to 318p in the wake of a negative note from
Lehman Bros. Punch Taverns fell 37.5p to 509.5p in
Phorm lost 275p to £18.75p on raising £32 million via a
Among numerous companies reporting Aegis put on 3p to 113p, Henry
Boot, shed 3p to 149.5p, Cape decline 12pto 245p, Evolution lost 6p
to 103p, Kesa Electricals slipped 5p to 192p and Northgate declined
19p to 576p.
Wall Street's biggest one-day gain in over five years in
response to the US Fed rate cut and reassuring statements from
Goldman Sachs and Lehman Bros gives share prices in the UK and
Europe and early lift. although the underlying mood remains
By 8.30am the FTSE 100 index was up 38 points at 5,643, with
ex-dividends in HSBC, Reuters and Standard Life accounting for
almost 11 points. The Mid-250 index was 19 points to the good at
In Europe the CAC-40 in France was 41 points better and the German
DAX 36 points firmer.
The overall pattern was mixed as investors were tempted to take
profits after yesterday's sharp gains.
HBOS slipped 8p to 472p, while Alliance & Leicester rose 7p to
British Airways gave up 5p to 226p following a profits warning from
rival easyJet, 47p weaker at 327.75p. Ryanair softened 0.12p
cents to 2.62.
Better-than-expected results boosted Smiths Group 34p to 981p and
ICAP 22p to 573p, but Next eased a penny to £11.78 after a
cautious statement, with other retailers a few pence lower in
Mining shares were in good heart with Rio Tino at £55.59,
Anglo American £30.80 and Xstrata £38.53 between 64p
and 94p higher.
Among the smaller caps Premier Farnell added 15p to 156.5p after
reporting in-line results, but profit alerts unsettled DTZ at
210.25p, down 51.5p and Hogg Robinson, 10.5p lower at
Mitichells and Butlers was another prominent weak spot at 321.75p,