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Decent rebound rally at open in London

After Friday’s big falls around the world, value buyers appeared this morning with one or two shorts also closing positions in London. The FTSE 100 index was up 50 points at its best but had pulled back a little mid-morning.

There were early gains for oil stocks after the emergency talks over the weekend to address the high global oil price broke up in disarray, while more disruption in Nigeria threatened to overwhelm the Saudi pledge to pump more oil. Miners also saw some early buying as metal prices remained solid.

In the bank sector, Lloyds TSB fell after widespread reports at the weekend that it was working on plans to buy Dresdner Bank, which had been put on the market by Allianz for an estimated £6bn. There was plenty more comment on the scale of the credit crunch writeoffs in the press, and once again we see more turbulence ahead in this sector.

Aggreko, a stock that was recently recommended as a Blue Index buy, shot up today after it said trading had been strong in H1, and it expected revenues would grow by about 25% with profit before tax to be about 40% higher than the prior year. It added that profits for the full year were also likely to be above current market expectations, and the shares were up a healthy 8%. We see more to come here as the price moves into new high ground, which goes to show that there are still plenty of quality buy situations under the surface.



Head of Research at Blue Index, specialists in trading Contracts For Difference
23/06/2008

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