London afternoon: Stocks consolidate gains

21st Mar 2011 14:53

Stocks have largely been in consolidation mode in the afternoon session after a strong performance this morning.Telecoms titan Vodafone is a high riser on the back of AT&T's $39bn bid for Deutsche Telekom's T-Mobile USA. If the bid is allowed, the enlarged firm will become number one, but both AT&T and Verizon Wireless - in which Vodafone has a 45% stake - will have huge market power in the fast growing mobile data, video and apps market. Sector peer BT also gets a lift from news of the deal.Engineer Weir Group is wanted after Credit Suisse upgraded the stock from "neutral" to "outperform", with a price target of 1835p.Mining giant Rio Tinto is higher after extending the acceptance period for its A$3.9bn bid for Australian coal miner Riversdale by three days to 6 April. The UK miner now either owns or has received acceptances in respect of 34.94% of Riversdale shares, up from 33.04% last Friday. Sector peer Xstrata is also making gains.UK energy companies will be referred to the Competition Commission this year unless they make their bewildering array of tariffs easier to understand. Industry regulator Ofgem says customers are being "bamboozled" by a complex system of tariffs that's risen from 180 to over 300 since 2008. National Grid and International Power are among the few FTSE 100 stocks in the red.British gas owner Centrica is another on the slide, with the fall more likely due to the Ofgem pronouncement than the $90m acquisition announced this morning of New York-based energy retailer Gateway Energy Services. Distribution group Bunzl is wanted following the announcement of two acquisitions on opposite sides of the world. The company is to acquire cleaning and hygiene products distributor Cannon Consumables and has handed over the cash for Omega Hospitality Suppliers, an Australian supplier of catering equipment and disposables to contract caterers, hotels and other food service customers.Defence firm Cobham has won a contract with US aerospace and defence giant Boeing to manufacture more than 400 bomb racks for the US Air Force.Indian energy company Essar Energy saw record refinery throughput in 2010 as it pushed revenue up by more than two-fifths from 2009's levels. Revenue rose 42% to $10bn in 2010 from $7.9bn in 2009, while earnings before interest, tax, depreciation and amortisation advanced 8% to $719m from $664m. However, traders focused on the group's warning about rising raw material and energy costs and the shares are sharply lower. On the FTSE 250, global diamond producer Gem Diamonds is higher after confirming press speculation that it is in preliminary merger talks with TSX Venture Exchange-listed miner Lucara Diamond.Office space provider Regus is a strong performer after it said it is "well positioned for a year of solid revenue growth and business improvement with continuing strong underlying cash flow generation." Falkland Islands oil explorer Rockhopper is leaping high after it said success at its 14/10-4 appraisal well makes it "highly likely" that the Sea Lion field will prove commercially viable."This was a crunch well for Rockhopper; failure would have raised enormous questions about the viability of the Sea Lion discovery, but the result appears to have matched or beaten expectations, raising the likelihood of a commercial development," said Matrix Group analyst Charlie Sharp . "The story looks back on track and we expect something like a 35-40% bounce in the share price," Sharp added.Baobab Resources has hit a new high after estimates put its iron and phosphate find at Monte Muande in Mozambique at 200-250 million tonnes (mt).Andrew McGeary, an analyst at Northland Capital Partners, thinks the Monte Muande estimate could turn out to be conservative given the shallow basis of the study at only 40m. "We continue to see significant value potential in spite a strong run in the shares," McGeary said. Baobab's joint venture partner, North River Resources, also rose on the announcement, albeit less spectacularly. Sweetener maker PureCircle fell deep into the red during the first half as sales were slashed by the timing of off take volumes for one of its material global contracts. The firm lost $7.5m in the six months ended 31 December compared with a profit of $2.3m a year earlier. Revenue plunged from $37.5m to $13.6m as sales of Stevia and Stevia extract both fell $12m.