The FTSE 100 advanced 23 points to 6,300, propelled by a positive market response to Barclays' (BARC) strategic review results, sending the bank up 4.1% to 313.p. The wider banking sector hopped on board for the ride with Lloyds Banking (LLOY) up 3.5% to 54.6p and Royal Bank of Scotland (RBS) up 2.6% to 349.1p. Click here for the full story.
Reports that US regulators are probing ICAP (IAP) over its role in the global Libor rigging scandal sent shares in the FTSE 250 interdealer broker down 4.8% to 340.7p. The firm disclosed last month it was under scrutiny by the UK's Financial Services Authority. Stockbroker Canaccord Genuity, which has a 'sell' recommendation on the stock and price target of 300p, comments: 'The ongoing Libor investigation and the Eurozone’s threatened Tobin Tax may overshadow ICAP’s fundamental value.'
Aerospace and defence giant BAE Systems (BA.) fell 1.7% to 329p after JP Morgan initiated coverage on the firm with a 'neutral' rating and 330p target price. It says BAE faces 'major structural problems and is likely to under perform the sector over the next 12-24 months'. Also suffering at JP Morgan's hands was fellow defence specialist Ultra Electronics (ULE) – down 3.9% at £15.65 after the investment bank cut its recommendation from 'overweight' to 'neutral'. Concern about cuts to defence spending – particularly in the US where President Barack Obama is due to give his State of the Union address later – continue to dog the industry.
Cyclical stocks were generally out of favour. Automotive engineer GKN (GKN) fell 1.5% to 254p on a read-through from tyre maker Michelin's (ML:EPA) gloomy 2013 outlook. Although the French group saw net profit rise 7.4% to €1.6 billion on price increases, its volumes fell 6.4% in 2012 and it expects no growth this year.
Ukraine-based oil explorer JKX Oil & Gas (JKX) slicked up 4.4% to 65.5p after telling shareholders it was ready to start a nine-stage fracture stimulation (fracking) project on the Rudenkovskoye field in Ukraine. Results are expected in July 2013 with the fracking intended to help the company produce gas from so-called 'tight' reservoirs.
Broker Fox Davies Capital hailed JKX's announcement. It says: 'We believe that this marks the end of the transition phase which has seen the company recover from what was a disastrous few years (where it went into financial and operational meltdown), into a smaller, healthier company that appears to be approaching the point at which its operations become sustainable.'
Card protection insurance group CPP Group (CPP), which has been dogged by mis-selling claims, fell 6.4% to 18.3p. Last week (6 Feb) it announced it had lost a key contract with RBS.
Boiler energy efficiency specialist Sabien Technology (SNT:AIM) swung to a £67,000 loss for the six months to 31 December compared with a pre-tax profit of £301,000 loss a year ago. Investors were not persuaded by assurances that full-year trading would be in line with market expectations and exited the stock – which was down by 28.2% at 28p.
Satellite operator Avanti Comunications (AVN:AIM) headed into orbit – up 8.4% to 272.5p – on strong interim numbers. These revealed a 60% in the order backlog to £290 million with sales momentum demonstrated by average monthly additions to this backlog of £11 million in 2012. Non-executive director Paul Johnson showed his confidence in Avanti's prospects by buying £27,700 worth of stock.