London close: Stocks hold on to gains

21st Mar 2011 16:17

The FTSE 100 remained broadly flat since 0900, holding on to gains made in early trading. Sentiment was boosted by signs of progress being made in the handling of the nuclear crisis. Two reactors at the Fukushima Daiichi nuclear power plant in Japan were successfully brought into cold shut down under off-site power at the week-end.Engineering blue chips Invensys, IMI and Weir Group were among the best performers of the day, with the latter being boosted by a Credit Suisse upgrade from 'neutral' to 'outperform', with a price target of 1,835p.Meanwhile, the mobile telecoms sector was the best performing sector of the day, with Vodafone gaining nearly 4%. The firm was 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. BT also got a lift from news of the deal.Indian energy company Essar Energy was the worst performer on the FTSE 100 despite reporting 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.Also on their way lower were power providers National Grid and International Power, after it was announced that 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.British gas owner Centrica was 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 was 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.Barclays made gains after selling a portfolio of property loans to CreXus Investment Corp, a commercial mortgage REIT, for $586m in cash. CreXus needs to sell shares to raise money via a share issue in order to buy the 30 commercial real estate assets. CreXus is managed by a subsidiary of Annaly Capital Management, the largest mortgage REIT in the US.Falkland Islands oil explorer Rockhopper jumped 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.Baobab Resources 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.