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Another mixed session as banks fall back again

Shares in London began well after the gains seen at the close in New York yesterday and the main winners were housebuilders after recent falls and transport stocks rising on the dip in crude prices.

There were various broker upgrades yesterday and today Taylor Wimpey is up 8.6% with Persimmon not far behind. British Airways rose after the fall in oil prices yesterday and Carnival is also ahead. This followed an excellent session for transport stocks yesterday with Stagecoach, Go-Ahead and Firstgroup all rising well

As the morning has progressed, though, sellers have come in again and the banks are leading the way down. The news that Sumitomo of Japan was reportedly in talks with Barclays to invest about £500m for an equity stake did little to help the shares which stand down almost 2% mid-morning. Even worse performances are seen at HBOS and RBS following yesterday’s downbeat forecasts from the former, which is getting close once again to its rights issue price of 275p. Another big faller is Wolseley after Morgan Stanley downgraded its rating to 'underweight' from 'equal-weight', and with the FT Market report reporting on speculation it too may require a rights issue.

There was not much better news on the second line, with a 5% fall in St. Ives
After it said overall market conditions had been more challenging than it expected at the half-year. Although total sales for the 43-week period to 30th May 2008 looked respectable, underlying sales, after adjusting for currency movements, showed growth of just 1.6%, and this to us looks like another ex-growth stock in the offing.


Head of Research at Blue Index, specialists in trading Contracts For Difference
20/06/2008

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