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Early fall on Footsie on profit taking and weak Far East markets

Although there were plenty of corporate statements early on today, the main themes were a continued rise in oil prices and some profit taking after an uneasy finish on Far Eastern markets. The mining sector ran into one or two sellers after a very good week, and Kazakhmys led the fallers mid-morning, dropping 3.4% on a lack of takeover news.

Next week could be a little more sticky as we see the first of the banking rights issues taking place, so it is a market for share plays rather than indices at the moment.

Another stock to see selling was British Energy with the shares below 700p as the latest deadline for potential bidders looms. EDF is today expected to table a takeover offer but according to press reports RWE is now not interested any more, so it is a hard call at the moment.

The retail sector has had its fair share of problems recently but there have been some value buyers nibbling away, and today HMV reported a 10.1% rise in like-for-like sales in the 16 weeks to 26th April and said it expected full-year profits before tax and exceptional costs to be towards the upper end of market expectations. These were highly impressive figures given the transitional nature of the business, and we can see higher prices here after an early 4% rally so far.

Head of Research at Blue Index, the Online Trading Specialists
09/05/2008

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