Another volatile week across world markets

25^th January - Another big opening markup on the FTSE 100 index

Shares in London were up for the third session running with the FTSE 100 index rising to 5970 just after the open, although some selling came in and by mid-morning the index was unchanged.  Miners were strong on hopes that the planned $150bn injection into the US economy would spark a revival, together with rising commodity prices, and Kazakhmys and Vedanta led the way.  At the bottom end, there was some profit in properties and housebuilders after the stunning gains of recent days.

Another busy day for news saw Imperial Tobacco rise after it received enough acceptances to mop up all of the outstanding shares in Altadis.  Scottish & Newcastle and the Carlsberg/Heineken consortium agreed terms for a recommend cash offer for the brewer worth 800p per share, and shares in S&N were up 2%.  Marston's said like-for-like sales in the managed division slowed in the 8 weeks to 19^th January and were 0.1% up on a year ago while brewing volumes were below last year.  It remained cautious about the outlook for 2008 as a consequence of the smoking ban, weaker consumer confidence and pressures on costs and margins.  Restaurant group Prezzo also saw trading slow, and profits in 2007 would be at the lower end of forecasts.  Imperial Energy reported a 229% increase in its Russian oil and gas reserves to 372m barrels of oil equivalent.  Vividas warned that expectations this year would need a material downward adjustment after slower trading and reorganisation costs.

28^th January - Opening markdown sees tentative buying in London

With Far Eastern markets again heavily down, there was a predictable opening loss on the FTSE 100 index, but value buyers nibbled away and mid-morning it was down just 60 points.  Xstrata led the field on hopes that Brazilian group Vale could soon launch a $50bn takeover bid, although other miners struggled on concerns over the US economy.   Otherwise there were few major moves of note, although there was a smattering of corporate news.

Diageo said it had entered into an agreement to acquire Rosenblum Cellars for $105m, and the acquisition should be economic profit positive during the fourth full year of ownership.  On the second line, Hornby said it continued to experience significant growth in the UK during the run up to Christmas, although Europe improved less than expected.  James Halstead's H1 turnover, on a like-for-like basis, grew by at least 13% against the prior year comparative, with both UK turnover and international sales ahead and Central European sales being particularly positive.  Portmeirion reported that it traded strongly in 2007, and revenue and profits were expected to be in line with management expectations.  Phoenix IT saw like-for-like revenues up by 16% on this time last year with good sales momentum seen in all divisions.  Lo-Q forecast profits for 2007 would rise by at least 46%.

29^th January - Good rally in London follows encouraging trading statements

A much better start in London saw buyers out in force following various well-received corporate statements, and by mid-morning the FTSE 100 index was up 75 points.  TUI Travel moved ahead after it said current trading remained encouraging with strong consumer demand across all source markets, and sales significantly ahead of prior year, with shares in Thomas Cook up in sympathy.  Mitchells & Butlers rose despite losses of £274m after tax after it closed out its disastrous hedges taken out in connection with its proposed property joint venture with Robert Tchenguiz.  It added that like-for-like sales were up 0.7% in first 17 weeks of this year with food sales up 4.6%, though drink sales fell by 1.1%, although it was cautious on the outlook for consumer spending. 

Alliance & Leicester said it would take a £185m charge for losses on its Treasury investments, more than three times higher than its previous estimate of 55m, adding that excluding the one-off charge its 2007 underlying profit would be in line with previous guidance.  Johnson Matthey said trading had been strong in Q3, with sales for continuing businesses up 18% as a result of good underlying volume growth and higher prices for platinum group metals.  Imperial Tobacco said the overall anticipated trading performance for the financial year to September 2008 remained in line with its expectations.
Prudential reported a better than expected 21% rise in full-year sales, fuelled by growth in its Asian division.  Finally, BSkyB was ordered to sell more than half its stake in ITV after a year of wrangling with competitors and regulators.

30^th January - Volatile action ahead of Fed decision later

There was good two-way business this morning in London ahead of tonight's Federal Reserve decision on US interest rates, but the sellers held sway overall with a fall of  50 points on the FTSE 100 index mid-morning.  The early loser was Standard Life, which posted a 12% rise in 2007 worldwide life and pension sales, slightly ahead of forecasts, but was more cautious over prospects in 2008.  It said that early indications were that some of the markets in which it operated would remain difficult in 2008.

After yesterday's rise, Thomas Cook pleased the market with pro forma profit from operations up 26% in the year to October.  It added that trading for the winter 07/08 season was in line with expectations, with demand ahead of capacity, and summer 08 was encouraging.  Vedanta Resources saw underlying profit fall by 7% in Q3 to $671.5m from $724m, which it blamed on the weak rupee.  De La Rue said it remained confident in its trading outlook and cash generation for the year, with continued strong level of banknote demand supporting revenue and margin improvement.  Chloride raised its expectations for the current year after a good Q3, with full year results expected to be slightly ahead of previous expectations.  Britvic said it was confident of meeting full year expectations as it posted a 31% jump in quarterly revenue helped by its Irish acquisition, though UK sales again struggled.

31^st January - Financials hit hard as Footsie tumbles from the off

There was another wave of selling as soon as the market opened this morning, with financial stocks hit hard on further credit rating downgrades in the US.  By mid-morning the FTSE 100 index was down 80 points, with
Friends Provident dropping 12% after it put its F&C Asset Management, Lombard and Pantheon Financial businesses up for sale as part of strategic review that will also cut £40m of costs.  Banks were very weak, with Barclays, RBS and HBOS all down over 4%. 

It was a very busy day for corporate news, with Vodafone beating forecasts of revenue growth in the last three months helped by good performances in India and other emerging markets.  Royal Dutch Shell said Q4 2007 earnings on a CCS basis, was up by 11% at $6.7bn compared to $6.0bn a year ago. National Grid revealed an updated dividend policy and said financial performance from October to January was in line with its expectations. Scottish and Southern Energy said it aimed to deliver at least 4% annual dividend growth in the next thee years.  Cairn Energy saw gross operation production for 2007 fall against last year, though average realised per barrel of oil equivalent rose.

On the second line, WH Smith unveiled a £90m cash return to shareholders alongside a solid trading statement for the Christmas period.  Euromoney Institutional Investor said there had been some signs of slowing in advertising and sponsorship sales, exacerbated by the recent credit crisis.  Mouchel said it remained on track to deliver performance in line with expectations for the full year and said its longer term outlook remained favourable.  F&C Asset Management, which was effectively put for sale by majority shareholder Friends Provident, said it had not received any bid approaches from potential bidders yet, and a assets under management at December were £103.6bn compared with £103.5bn at end-September.  Land of Leather reported a 15.4% fall in like-for-like sales orders in the 23 days to 27^th January.