'Relief rally' sees London shares rise sharply

Thursday 17 July 2008

The FTSE 100 share index closed up 135.7 at 5286.3, around 34 points off its high for the day.

Shares rose strongly, recovering almost all of the last two days losses on renewed confidence that the worst may be over for the banking sector - it's being described as a 'relief rally'.

Royal Bank of Scotland showed its biggest gain for 18 years, rising 14.2 to 179.3. Lloyds TSB was up 16 at 300

HBOS traded below its right issue price before recovering to close back above it, up 13.75 at 268.25.

At an EGM in Sheffield, shareholders of Bradford & Bingley agreed the battered mortgage bank's £400 million rights issue but the small audience that turned up in person was vocal in its criticism of the bank and its board. Shares finished up 3.75 at 54 - still a penny below the rights issue price.

Travel and retail groups benefited from a falling oil price - crude down for the third day in a row. Cruise line group Carnival was up 88 at 1614, discount airline easyJet up 24.25 at 311.5.

DIY retailer Kingfisher rose 7 to 103.1 as the management reshuffle was completed with the appointments of Kevin Byrne as finance director from DSG International and Peter Hogsted from Ikea to head up the international unit.

Q1 revenue at Mothercare was up 21%, boosted by the takeover last year of Early Learning Centre. Shares ended unchanged at 346.25 although they had traded up to 378 through the day.

Specialist fund manager Ashmore showed its biggest one-day gain since its IPO in October 2006, at one stage ahead 20% before retreating to finish up 29.75 at 233.75. Funds under management rising by 19%. The firm said full year earnings would be in line with expectations.

Rolls Royce gained 22.75 to 351.75 after it announced plans to set up a nuclear division, saying it reckons that the value of work in the civil nuclear business will rise to £50 billion a year from £30 billion now by 2023.

Restaurant group Clapham House has sold its Bombay Bicycle Club chain to Gourmet Restaurants for £4.4 million. Shares up 12 at 92.

Dairy Crest rose 35.25 to 391, the UK's biggest milk and cheese producer reported Q 1 food sales up 14% and Q1 dairy revenue up 5%.

On broker recommendations

Cable & Wireless on an upgrade from Lehman was up 3.8 at 159.4.

Inmarsat , upgraded by Goldman Sachs, gained 12.75 to 496.

And an upbeat note from Citigroup helped Wellstream Holdings rise 65 to 1055.

Builders put in a strong performance on a sector upgrade from UBS, Bellway up 90.5 to 538.5, Persimmon up 33.75 to 292.

But coal-fired power generator Drax down 39.5 at 714.5 on a reiterated underperform rating from Cazenove.

At 5pm sterling was up 0.0077 against the dollar at $2.0060. Against the Euro, sterling was down 0.0001 at 1.2631.

17 July 2008 © Moneyextra.com

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