London close: Banks lead rally

25th Nov 2011 17:12

Every day this week and last the Footsie has been stuck in reverse gear but today it jolted forward, thanks to a little help from Wall Street, which opened higher.Banks led the advance on hopes that there is truth in the rumours that European policy makers are set to drop the requirement for private sector participation in the Eurozone bail-out mechanism.Mining titan Vedanta was the biggest faller, on news that the firm is coming under pressure to deal with its level of debt. Deutsche Bank sparked the worries after it cut its target price on the stock from £21 to £16.7 and made a statement saying: "We believe the key question for investors is whether Vedanta will breach covenants and whether the subsidiaries can service the parent level debt. In our view this depends increasingly on a robust oil price, as Cairn India [which Vedanta is buying] will need to provide the majority of dividends to service parent level interest payments." WATERED DOWNWater utility Severn Trent was another faller. Profits came in towards the bottom end of expectation. Interim profit before tax tumbled 35.4% to £65.3m from £101.1m the year before, but with exceptional items and losses on financial instruments stripped out, profits were more or less flat, at £155.0m, versus £168.0m last year. The group's legion of income-hungry shareholders were kept happy by an interim dividend of 28.04p, up 7.7% on last year in line with Severn Trent's policy of increasing payments by three percentage points above retail price inflation. CLEANING UPContract caterer Compass is looking to clean up in South Africa, after acquiring Supercare Services Group for an undisclosed sum. Supercare is one of South Africa's leading cleaning companies. In the year to 28 February 2011, Supercare generated revenue of around £63.6m and had gross assets of about £12m. Cash-strapped food manufacturer Premier Foods is to get a new chief financial officer. Mark Moran, previously finance director at Durex condoms maker SSL International, will replace Jim Smart early next month, though Smart will hang around for a month to enable a smooth hand-over. The shares reacted favourably to the appointment. Moran will oversee negotiations with the firm's bankers over refinancing of the group's huge debt mountain. Premier was given some breathing space by its bankers earlier this month when they agreed to defer end of year loan covenant tests by three months.ANY PORT IN A STORMThe haggling over price between oilfield safety equipment provider Cosalt and its chairman, David Ross, is over, and judging by the share price reaction, the directors of the crisis-torn firm spent most of the negotiations bent over an oil barrel.Cosalt shareholders will be entitled to receive 0.1p in cash per Cosalt share in cash under the terms of the agreed offer, which represents a discount of around 87.18% to the closing price of 0.78p on 16 November, the last dealing day before Ross made his low-ball offer.The rally by cash-strapped package tour operator Thomas Cook continued, with the firm's bankers reportedly poised to shovel another load of cash its way to tide it over the winter before the summer bookings start rolling in.FTSE 100 - RisersRoyal Bank of Scotland Group (RBS) 18.74p +4.28%Inmarsat (ISAT) 403.30p +3.60%Lloyds Banking Group (LLOY) 23.19p +3.50%Admiral Group (ADM) 881.00p +3.10%Barclays (BARC) 155.65p +2.07%Unilever (ULVR) 2,015.00p +1.92%National Grid (NG.) 631.50p +1.85%BAE Systems (BA.) 255.80p +1.75%Meggitt (MGGT) 365.50p +1.70%ICAP (IAP) 327.80p +1.58%FTSE 100 - FallersVedanta Resources (VED) 928.00p -2.83%Glencore International (GLEN) 373.80p -2.19%Severn Trent (SVT) 1,497.00p -1.71%Fresnillo (FRES) 1,583.00p -1.37%Cairn Energy (CNE) 264.20p -1.31%ARM Holdings (ARM) 553.00p -1.25%Investec (INVP) 330.20p -0.78%Ashmore Group (ASHM) 310.70p -0.61%Smith & Nephew (SN.) 555.00p -0.54%Schroders (SDR) 1,205.00p -0.50%FTSE 250 - RisersThomas Cook Group (TCG) 18.02p +10.21%De La Rue (DLAR) 936.00p +5.52%Phoenix Group Holdings (DI) (PHNX) 532.00p +4.31%Premier Foods (PFD) 4.72p +4.19%Premier Farnell (PFL) 167.00p +3.92%ITE Group (ITE) 181.90p +3.88%TUI Travel (TT.) 154.60p +3.83%Savills (SVS) 284.90p +3.60%Paragon Group Of Companies (PAG) 178.20p +3.48%Redrow (RDW) 106.90p +3.29%FTSE 250 - FallersSupergroup (SGP) 444.50p -6.42%JD Sports Fashion (JD.) 713.00p -5.56%Chemring Group (CHG) 389.80p -5.32%International Personal Finance (IPF) 170.10p -4.44%Kenmare Resources (KMR) 31.93p -4.20%TR Property Inv Trust Sigma Shares (TRYS) 67.60p -4.11%Kesa Electricals (KESA) 81.65p -3.77%Misys (MSY) 240.90p -3.56%Pace (PIC) 44.70p -3.46%TR Property Inv Trust (TRY) 140.50p -3.10%--jh