RPT
AFX Europe; Feb 19, 2001
(Repeating to clarify in para 21 it is Aceralia which is merging with Usinor and Arbed, not Acerinox).
LONDON - Leading shares were steady off their lows in very quiet midday trading, with sharp falls in the telecoms and tech stocks dragging the wider index lower - with even bargain hunters failing to move back in despite the recent share price shake-out, dealers said.
The closure of U.S. markets today for Presidents' Day, coinciding with the half-term holiday, looks set to ensure a very dull afternoon session - which could see techs and telecoms fall back even further.
At 12.19 pm, the FTSE 100 index was down 11.4 at 6,076.9, just above its opening low of 6,065.2, but well below its morning high of 6,101.4.
Only the FTSE Mid Cap index managed to buck the weak trend, up nearly 1 point.
Volume was an unimpressive 677.8 mln shares in 47,299 transactions.
Techs and telecoms had another very tough morning session, undermined by persistent worries about the growth outlook in the wake of last week's warnings from industry bellwethers Nortel, Dell and Hewlett-Packard. Energis was one of the hardest hit, down 26 pence at 450, while Telewest shed 2-3/4 to 132 and Colt Telecom lost 40 to 1360.
But perhaps the most dramatic move was in market heavyweight Vodafone, which fell through support around the 200 pence to rest 9 lower at 195-1/2. The move was blamed on the raft of negative comment on the outlook for the mobile sector in the weekend press. BT was also a loser, down 19 at 580-1/2, after it reportedly admitted that it had significantly overpaid for its UMTS licences.
Cable & Wireless also moved in to the spotlight, 23 lower at 774, after revealing its plans for the Pacific Cyberworks stake.
Within the tech sector, Autonomy slid back 51 to 1475 as Nomura downgraded its stance to 'sell' from 'hold', warning that there could be as much as 20-30 pct downside from here despite last week's solid results. CMG suffered, down 24 at 881, as did Spirent, 7 lower at 438, and ARM Holdings, 6 easier at 404-1/2.
Beleaguered Railtrack was still under pressure, down 6 at 941, as cash worries continued to dog sentiment, largely on the back of weekend press reports suggesting that the rail and track infrastructure group is facing bankruptcy.
Shares in Boots were also on offer, down 23 at 587, after the weekend press suggested that the group will have to write off hundreds of millions of pounds as part of an overhaul to protect it from the supermarket groups.
Elsewhere, Halifax shares dropped 10 at 716 on news Credit Lyonnais Securities has downgraded the stock to 'sell' from 'reduce' on valuation grounds ahead of results tomorrow; Schroder Salomon also reiterated its 'underperform' on the group.
Other fallers among the financials included Abbey National, down 21 at 1192, Standard Chartered, 15 off at 1014 and Alliance & Leicester, down 6-1/2 at 705.
On the upside, 'old economy' blue chips continued to dominate.
AB Foods led the pack higher, up 17 pence at 502, as investors moved back in after last week's Schroder Salomon Smith Barney downgrade.
Tesco pushed 5-1/4 higher to 266-1/4 after signalling that current year figures will be in line with expectations, while Reuters added 18 to 1089 -- excited by Goldman Sachs 'market outperform' advice and a 10 stg price target.
Lloyds TSB sparkled, up 9-1/2 at 692, with Goldman Sachs repeating its 'market outperform' - believing the stock has been derated far enough in the wake of its planned acquisition of Abbey National. Bear Stearns was also a fan, rating LLoyds a outright 'buy', with a stand alone price target of 850 pence.
WPP shares attracted some fresh buying, up 7-1/2 at 802-1/2, as Schroder Salomon Smith Barney repeated its 'outperform' rating ahead of this week's figures.
Drugs giant GlaxoSmithKline was also a winner as investors piled in ahead of this week's full year results, and ignored weekend press reports that the UK government is monitoring its Zyban product due to reports of 18 deaths over 18 months.
Its shares added 50 at 1933, helped by positive recommendations from Merrill Lynch, who advised clients to 'accumulate', while SocGen repeated its 'buy'.
Oil issues, which had a volatile morning session, managed to rest in positive territory at midday, with BP Amoco leading the charge - up 6-1/2 at 573-1/2. But gains in Shell, 4 higher at 586, were held back by a CSFB ratings downgrade - with the broker moving back to 'reduce' from 'hold'.
Anglo-Dutch steel maker Corus led the Mid Cap gainers, up 3-3/4 pence at 82-1/4 as investors reacted to details of the merger of Aceralia, Usinor and Arbed - which will create one of the world's largest steel groups. Williams de Broe reckoned the news will augur well for Corus and repeated its 'buy' advice.
Persimmon gained 4-1/2 to 278 after 'strong buy' advice and 340 pence price target from UBS Warburg. The stance reflects an increase in earnings per shares resulting from the Beazer deal, which Warburg thinks will enhance 2002 EPS by 20 pct.
Psion also had a good run higher, up 4 at 190 and bucking the weak tech trend, after announcing that Siemens has signed an agreement with Symbian to adopt the Symbian software platform for Smartphones.
But most tech issues suffered the fall-out from Nasdaq's pre-weekend drop.
Intec Telecom Systems was a major casualty, 35 off at 366, after disappointing first quarter results, with EBITDA dipping 1.4 mln stg into the red on turnover up 66 pct. Nevertheless, JP Morgan remains a fan, advising to 'buy on weakness' with a 650 pence price target.
Shares in TeleCity were also on offer, down 20 at 587-1/2, after it revealed that full year pretax losses more than tripled due to the rapid build-out of its web hosting services. Meanwhile, Imagination Technologies lost 10 to 122-1/2, Bookhma slid 37 to 672, Orchestream shed 7 to 176-1/2, and Kinbgston Communications, 3 lower at 179.
Elsewhere, disappointing full year results took their toll on St James' Place, down 20 at 426-1/2, while RMC Group shed 20-1/2 to 704-1/2 as bid speculation - which had supported the stock late last week - faded.
Of the Smaller Cap risers, TelecomPlus gained 24 to 117-1/2 after very strong third quarter results, and positive noises on continued customer growth.
Berry Birch & Noble rose 10 to 142-1/2 as it revealed details of a 775,000 stg placing - which will be used to further boost working capital. The news was accompanied by the retirement of founder and chief executive Derek Berry.
After a see-saw morning, Crnational Park. The stock was also supported by news that Credit Lyonnais Securities has started coverage, with a 'buy' rating - seeing significant upside in the stock near-term.
On the downside, Foresight Technology VCT shares topped the fallers, losing 45 pence at 125 as investors mulled the extent of its exposure to e-district.net PLC - which saw its shares suspended on AIM this morning due to the apparent overstatement of its revenues and user numbers. e-district.net shares were suspended at 107-1/2 pence.
EuroTelecom shares were off 1/2 penny, or 10 pct, at 4-1/2 after J2C revealed it is no longer in discussions with the gro falls in the telecoms and tech stocks dragging the wider index lower - with even bargain hunters failing to move back in despite the recent share price shake-out, dealers said.
The closure of U.S. markets today for Presidents' Day, coinciding with the half-term holiday, looks set to ensure a very dull afternoon session - which could see techs and telecoms fall back even further.
At 12.19 pm, the FTSE 100 index was down 11.4 at 6,076.9, just above its opening low of 6,065.2, but well below its morning high of 6,101.4.
Only the FTSE Mid Cap index managed to buck the weak trend, up nearly 1 point.
Volume was an unimpressive 677.8 mln shares in 47,299 transactions.
Techs and telecoms had another very tough morning session, undermined by persistent worries about the growth outlook in the wake of last week's warnings from industry bellwethers Nortel, Dell and Hewlett-Packard. Energis was one of the hardest hit, down 26 penack was still under pressure, down 6 at 941, as cash worries continued to dog sentiment, largely on the back of weekend press reports suggesting that the rail and track infrastructure group is facing bankruptcy.
Shares in Boots were also on offer, down 23 at 587, after the weekend press suggested that the group will have to write off hundreds of millions of pounds as part of an overhaul to protect it from the supermarket groups.
Elsewhere, Halifax shares dropped 10 at 716 on news Credit Lyonnais Securities has downgraded the stock to 'sell' from 'reduce' on valuation grounds ahead of results tomorrow; Schroder Salomon line with expectations, while Reuters added 18 to 1089 -- excited by Goldman Sachs 'market outperform' advice and a 10 stg price target.
Lloyds TSB sparkled, up 9-1/2 at 692, with Goldman Sachs repeating its 'market outperform' - believing the stock has been derated far enough in the wake of its planned acquisition of Abbey National. Bear Stearns was also a fan, rating LLoyds a outright 'buy', with a stand alone price target of 850 pence.
WPP shares attracted some fresh buying, up 7-1/2 at 802-1/2, as Schroder Salomon Smith Barney repeated its 'outperform' rating ahead of this week's figures.
Drugs giant GlaxoSmithKline wasest steel groups. Williams de Broe reckoned the news will augur well for Corus and repeated its 'buy' advice.
Persimmon gained 4-1/2 to 278 after 'strong buy' advice and 340 pence price target from UBS Warburg. The stance reflects an increase in earnings per shares resulting from the Beazer deal, which Warburg thinks will enhance 2002 EPS by 20 pct.
Psion also had a good run higher, up 4 at 190 and bucking the weak tech trend, after announcing that Siemens has signed an agreement with Symbian to adopt the Symbian software platform for Smartphones.
But most tech issues suffered the fall-out from Nasdaq's pre-weekend drop.
comPlus gained 24 to 117-1/2 after very strong third quarter results, and positive noises on continued customer growth.
Berry Birch & Noble rose 10 to 142-1/2 as it revealed details of a 775,000 stg placing - which will be used to further boost working capital. The news was accompanied by the retirement of founder and chief executive Derek Berry.
After a see-saw morning, Cantab Pharmaceuticals held steady at 120 pence following an agreed 123.7 mln stg all-share merger with Xenova. Under the terms of the deal, shareholders will receive 11 Xenova shares for every 7 Cantab shares held - Xenova shares were down 9 at 80 on the news. ure, down 7 at 86-1/2, after revealing 5.8 mln stg of full year losses, with even the appointment of Lord Alli failing to stem the selling tide.
Hercules Property shares were 32-1/2 off at 657-1/2 after the group unveiled a widening of pretax losses, while Honeycombe Leisure fell back 6-1/2 to 95 as investors fretted about a "substantial" acquisition. The Times reported Saturday that the company was planning an acquisition worth more than 30 mln stg.
nm/shw
World Reporter All Material Subject to Copyright
globalarchive.ft.com |
