Harbinger Capital considers sale of Inmarsat stake

Harbinger Capital, which owns about 28pc of Inmarsat and is run by Philip Falcone, is understood to be considering a sale after it received several approaches from investors who want to acquire some or all of the shareholding.

However, Harbinger has not yet made a final decision on whether it should dispose of its stake, said people familiar with the matter. Harbinger – which in 2008 tried to buy Inmarsat – declined to comment. Inmarsat edged up 5 to 668½p.

Overall, the FTSE 100 climbed 44.28 points to 5592.90 and the FTSE 250 rose 60.67 points to 10592.47.

News that Sinopec is to invest $7.1bn (£4.5bn) in Repsol's Brazilian unit helped BG Group top the blue-chip leaderboard. BG Group which has extensive oil and gas interest in Brazil, put on 51½p to £11.70. There was also some talk in the market that Royal Dutch Shell, up 31p to £18.88, could be preparing a bid for BG Group.

Tullow Oil, meanwhile, gained 34p to £13.08. Traders reckon the company is a target for Sinopec or CNOOC, two state-backed Chinese organisations.

BP advanced 12.7 to 440½p as TNK-BP was rumoured to have made an offer for the London-listed group's Venezuelan and Vietnamese assets. ?

In the mining sector, Fresnillo increased 28p to £12.70 after JP Morgan Cazenove upgraded the stock to "neutral". David Butler, an analyst at the broker, is relatively bullish about the prospects for gold and silver prices. This is because very low US and European central bank rates have yet to translate into decisive economic growth figures but are fuelling fears that inflationary conditions are being created.

Mr Butler added that low yields on government debt in combination with high government deficits have encouraged money to flow into gold-backed exchange-traded funds. JP Morgan Cazenove also lifted its price target on African Barrick Gold, up 9½ to 599½p, to 900p from 755p. Elsewhere in the sector, Randgold Resources moved 155p higher to £65.25.

BT Group rose 2.8 to 142.8p as JP Morgan Cazenove said it sees the pension issues facing the company as a "reducing concern". "Given the numbers involved, this is very material for BT's equity value and underpins our overweight recommendation," said Paul Howard, an analyst at the broker.

Amec climbed 24p to £10.10 as Credit Suisse took up coverage with an "outperform" rating and a price target of £11.80. Analysts at Credit Suisse said: "Amec is poised to benefit from exposure to significant areas of upcoming capex [capital expenditure] growth in Canadian oil sands, mining and nuclear. We think this theme of defensive, reasonably-priced growth driven by a recovery in energy spend is compelling in the context of an uncertain outlook for the general economy."

Goldman Sachs put HSBC on to its "conviction buy" list, which helped the shares put on 8.6 to 653.6p.

On the mid-cap index, Brewin Dolphin surged 10¾ to 142½p after it said in a pre-close statement that assets under management have and the group has experienced strong levels of trading commission during the fourth quarter.

Spectris rallied 11p to £10.84 following its acquisition of N-TRON, a privately-owned US manufacturer of rugged industrial networking components, for $51m (£32m).

However, CSR fell 14.6 to 344.4p as several brokers downgraded the technology company. Exane BNP Paribas, for example, downgraded the shares to "underperform".

Small-cap Asterand jumped ¼ to 12¼p after it said it had won a $24.3m five-year contract with the National Cancer Institute to supply clinically annotated human biospecimens for The Cancer Genome Atlas project.

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Week ahead: company results, economic data

Interim results

None announced

Trading update

XP Power

Economics

Markit/CIPS construction PMI, Chancellor George Osborne expected to speak at Tory party conference

Meetings

None announced

Full-year results

Epistem Holdings, St Ives

Interim results

Tesco

Trading update

Aberforth Smaller Companies Trust, British Airways, Northern Foods, Tui Travel

Economics

Markit/CIPS services PMI

Meetings

None announced

• J Sainsbury, the supermarket, will report its second-quarter results on Wednesday. The chain is thought to have had a strong quarter, and analysts expect like-for-like sales to have grown by 2pc compared to 1pc over its first quarter. New store growth is expected to accelerate throughout the year. The retailer should benefit from its South East bias, where it has its highest concentration of stores and where the looming Government cuts will have the least impact.

• Greggs, the sausage roll maker, will update the market on recent trading. The retailer said in August that first-half profits had risen by 12.3pc to £18.6m. However, Ken McMeikan, chief executive, warned that the pressure on the trading environment would increase over the second half of the year as the austerity measures kick in.

• Robert Walters will kick off a round of reporting from recruitment companies on Wednesday, as it updates on third-quarter trading.

At its results for the six months to June 30 e_SEmD issued in August – the white-collar recruiter revealed that it had swung back into the black, recording a pre-tax profit of £5.1m compared to a loss of £2.6m last time. Growth had been boosted by increasing demand in Asia.

Recruitment peers Hays and Michael Page will follow with trading updates on Thursday. At its full-year results in August, Hays revealed a slump in pre-tax profits to £29.7m from £151m the previous year, but said the outlook across 90pc of its markets was continuing to improve.

Ahead of the first-quarter trading update, analysts at Panmure Gordon said in a note last week that comparatives from last year were soft, which should lead to progress in Asia Pacific and Europe. Michael Page will update on third-quarter trading. More than 70pc of the recruiter's gross profits came from overseas markets in the first half of the year. At the time of the half-year update, Steve Ingham, chief executive, said an increase in permanent jobs did show a level of confidence in the market.

Full-year results

Sportingbet

Interim results

None announced

Trading update

J Sainsbury, Marston's, Dunelm, Hays, easyJet, Greggs, Robert Walters

Economics

None scheduled.

Meetings

Adept Telecom (AGM)

• Investors in Marks & Spencer should not expect any big strategic statements from new chief executive Marc Bolland this week. Those are going to be unveiled at the retailer's interim results next month. What observers can expect, however, is an update covering the summer months when trading on the high street was volatile due to the patchy summer weather.

• Ted Baker, the clothing retailer, will report its first-half results. Ray Kelvin, the company's founder and chief executive, said in June that sales had been robust over the first half of its year.

Trading in the UK was strong, and sales in its overseas markets were improving.

• Rank's trading statement will be eagerly watched for signs that bingo admissions are stabilising and that its Mecca Full House concept, aimed at a younger generation of players, is delivering decent returns. Any acceleration of the rebranding of Rank's G Casino format is also likely to be welcomed. Credit Suisse expects full-year pre-tax profits of £53.3m.

Full-year results

Victrex

Interim results

Ted Baker

Trading update

Hays, Halfords, Marks & Spencer, Michael Page, Rank, UK Mail

Economics

Bank of England rate announcement, UK manufacturing, US jobless claims

Meetings

IG Group (AGM)

Full-year results

None announced

Interim results

None announced

Trading update

Cerep

Economics

UK producer prices, US jobs data

Meetings

Dignity Sutton Coldfield (EGM) SIR Terry Leahy, the Tesco chief executive, will oversee his final results at the helm of the UK's biggest supermarket on Tuesday.

He hands over the top job to Phil Clarke in March next year having led the retailer since 1997. It is a tenure that has seen Tesco grow from a largely UK chain to one of the world's biggest retail groups with operations in 14 countries. Analysts expect his last results e_SEmD which will cover the first half of Tesco's financial year e_SEmD to show that sales over the six months to August 28 rose by around 8pc to £30bn while pre-tax profit is expected to be up 3.4pc to £1.6bn.

The retailer's Asian operations will show strong growth, helped over this half by favourable currency movements.

Analysts at broker Jefferies International expect a more "muted" recovery in Central Europe. Tesco's loss-making Fresh & Easy chain in the US is also expected to have remained a drag on profitability. The City expects first half losses of around £80m from the division. Overall, international trading profit is expected to be up 28pc year-on-year. THE Bank of England is expected to keep the base rate at its record low of 0.5pc when the Monetary Policy Committee (MPC) announces its decision on Thursday.

Policymaker Andrew Sentance is widely predicted to repeat for a fifth month his call for rates to rise, while his fellow MPC member Adam Posen has just come out in favour of more quantitative easing (QE), presenting the possibility of a three-way split on the MPC over how to manage the fragile economic recovery.

Monday's construction data is expected to show growth is slowing after the second-quarter spike following the harsh winter. The next day's services PMI could prove an indicator of the likelihood of QE, if more weak data suggests the recovery is stalling.

Chancellor George Osborne is expected to address the Tory party faithful in Birmingham on Monday, which could offer some policy insights.

View the original article here

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Investors see silver lining in economic gloom

The ratio varies wildly. In 1970, it was about 20 and it peaked at just under 100 in 1991. The average is around about 40 – and that is the key to any silver bull's argument. Historically, it appears that silver is undervalued in relation to gold, they argue.

In 2010, the ratio has been as high as 72, recorded in February, and is now just below 60. Many believe it could have further to fall.

The reasons for gold's outperformance are well documented – inflationary fears, currency woes and safe-haven demand – but does the declining ratio towards its average mean that silver is going to continue with its charge forward?

Most analysts are not that bullish – with a price of about $24 targeted for next year. There are some, however, that believe the silver price will become much more lustrous over the coming years.

James Turk, who founded bullion dealer GoldMoney in 2001 and manages $1.2bn (£758m) of assets, thinks prices could hit $50 by the end of next year, but accepts that there will be volatility along the way.

Mr Turk believes quantitative easing will devalue currencies and send precious metals much higher.

"Just pick up your newspaper to see what central banks are doing to destroy currencies," Mr Turk says. "Unlike the 1970s, there are no safe havens from currency debasement – such as the deutschemark."

Mr Turk is more bullish on silver than gold. "The problem is the volatility," Mr Turk says. "Essentially it is a cheap form of gold, but it is not for everyone because of the volatility."

He says investors should always buy the physical metal and not paper and advises a portfolio of one-third silver to one-third gold.

Suki Cooper, a precious metals analyst at Barclays Capital is not so bullish. She has an average target for silver next year of $22.2, expecting the metal to peak in the second quarter at an average price of $23.7.

"Silver mine supply is still growing and industrial demand – although improving – remains relatively weak. Silver is still in surplus, but it has benefited form safe-haven buying," Ms Cooper says. "The price could fall sharply if investor interest wanes."

Already investor interest this year is much lower than last year, which is surprising given the recent bull run.

In the current year to date investment inflows into silver have amounted to 1,377 tonnes. In the nine-months to September 2009 it was 2,942 tonnes – with full year 2009 inflows at 4,112 tonnes, Ms Cooper notes.

However, Mr Turk remains unbowed. "I expect the gold-silver ratio to fall back below 23 over the next three-to-five years," he says, despite most analysts thinking this is unlikely.

Precious metals consultancy GFMS also believes that there is a risk of a sharp fall in the silver price.

Silver has risen on gold's coat-tails, but it is also used in industrial processes so it has risen on hopes of a recovery in the global economy too.

Philip Klapwijk, GFMS's chairman, said last week that the absence of an improvement in the economy will be a negative for the silver price.

"If you think gold will continue to advance in the medium term, then why wouldn't silver necessarily follow suit? One reason could be that if economic prospects take a bath, that side of the argument for silver becomes a lot weaker," Mr Klapwijk said.

"In the current situation, silver is benefiting from both general optimism on industrial production in emerging markets, and the investor interest in safe-haven assets like gold," he added.

All of this implies that, on a fundamental basis, silver is looking more toppy than gold at the moment after its recent outpeformance.

Instead of chasing the price of the physical metal, investors may want to invest in silver mining companies that are expanding production, such as the FTSE 100 group Fresnillo.

In the first half of this year, the group's cash cost of production was just $3.58 an ounce – one of the lowest in the industry. It aims to bring on line one new mine or expansion per year until 2014.

Of course the share price will be hit if the silver price falls, but the company will remain highly profitable. But cautious investors may want to wait for a dip before they pile in.

Quantitative easing could boost oil prices

Oil prices could rise by more than a quarter if there is more QE – even if demand stays weak, according to new analysis from Bank of America Merrill Lynch.

The broker's economists expect the Federal Reserve to expand its easing programme by $500bn (£317bn) to $750bn as early as the first quarter of 2011.

If the global money supply expanded at the same pace as this, gold would move 15pc higher and oil prices by 26pc, the broker argues.

This could bring Brent crude oil prices up from an average of $78 a barrel this year to an average of $83 a barrel next year irrespective of demand, Merrill said.

COPPER for delivery in three months hit a two year high on the London Metals Exchange on Friday, following upbeat manufacturing data from China.

The price rose to $8,078 (£5,101) a tonne, the highest level since August 1 2008, but prices eased in the afternoon.

The purchasing managers index rose to 53.8 in September from 51.7 in August, the China Federation of Logistics and Purchasing said. A figure above 50 indicates expansion.

View the original article here

FTSE marks time as Asian shares hit two-year highs

Asian stocks shot to a two-year high, boosted by interest in emerging markets, as the dollar remained close to an eight-month low against a basket of major currencies, with expectations increasing that the Federal Reserve will add to money supply before the year is over to support the US economy.

The MSCI index of Asian stocks outside Japan rose to the highest level since June 2008, as investor confidence in the region's prospects was boosted by signs Chinese manufacturing activity has held up well.

"Continued foreign buying, amid the US dollar's recent weakness and an increasing preference for emerging market stocks, has lifted the market to a new high," Lee Jin-woo, a market analyst at Mirae Asset Securities in Seoul, told Reuters.

Strong foreign portfolio flows into the region have lifted Asian currencies, putting pressure on regional central banks to step up intervention to limit the inflow of speculative "hot money" and to support their export-oriented economies.

In South Korea, foreign investors were buyers of a net 141 billion won ($124.8 million) worth of stocks, poised to pick up shares for a 14th straight session, the longest buying streak since April.

The MSCI index of Asia Pacific shares outside Japan, which has risen for six consecutive weeks, was up 1.1pc with a 2.3pc gain in the energy sector leading the pack on the back of firm crude prices.

Hong Kong's Hang Seng index led regional exchanges, rising 1.4pc to 22662.15 points.

However, the Nikkei closed 0.25pc down at 9381.06, as trading in Japan remained nervous ahead of a Bank of Japan policy decision on Tuesday.

Former BOJ Deputy Governor Toshiro Muto said on Friday the central bank may ease policy as inaction would run the risk of spurring further yen gains, given the prospects for easing by the Fed.

Traders are not expecting the BOJ to make a substantial change to policy but may hold off on big bets on the yen ahead of central bank meetings in Britain and the eurozone on Thursday, as well as the September US payrolls report on Friday.

"Nervous trade will likely continue this week, even after tomorrow's event, as US jobs data is also set to be released later in the week," Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities, told Reuters.

In Europe, the French CAC and Germany's DAX were each 0.5pc lower in early trading.

View the original article here

Wolseley climbs on Credit Suisse note but miners drag down FTSE 100

"We believe the US non-residential market will trough in 2011 and start to deliver positive growth from the second half."

Wolseley, the plumbing supplies group, ended up 19p at £16.01.

National Grid took the top spot after adding 12½ to 553½p as the City warmly welcomed the appointment of Andrew Bonfield, Cadbury's numbers man, as its new finance director.

Mr Bonfield, who replaces Steve Lucas who is retiring at the end of the year, is said to have a played a key role in forcing Kraft to increase its takeover offer for the Crunchie and Wispa maker.

Analysts at RBS said Mr Bonfield has both US experience from his time as chief financial officer at pharmaceutical group Bristol-Myer Squib and energy nouse from his days as finance director of BG Group.

National Grid was also boosted by news that Ofgem, the energy regulator, reckons £32bn needs to be spent on the UK's energy infrastructure over the next 10 years.

A new finance director also helped boost Yell, up 1 to 15.5p. The struggling FTSE 250 directories group's shares put on more than 10pc at one point following the appointment of Tony Bates, a former Colt Telecom executive, to the finance role.

BT took second spot in the bluechip index, up 3 to 145.8p, as traders absorbed positive news flow from last week.

Standard Chartered put on a late surge adding 3 to 145.8p after it announced plans to aggressively expand its small and medium-sized business operations.

The Asian-focused bank plans to hire 1,200 people to help small business over the next three years. "Almost everything we are trying to do, we want to double" said Standard Chartered's head of global consumer banking Steve Bertamini.

African Barrick Gold benefited from the continued belief that gold prices will continue their upward trajectory as calls grow for a fresh round of quantitative easing. The gold miner ended the day up 5½ to 605p after JP Morgan raised its target price to 900p from 755p.

However, the rest of the miners languished at the foot of the table and helped drag the FTSE 100 index down 36.93 points to 5555.97. Kazakhmys dropped 38p to £14.23 and Xstrata fell 32½p to £12.09. Xstrata was also hit by speculation that Singapore's Sin-Tang Developments maybe planning a bid to rival Xstrata's $416m offer for Australia's Sphere Minerals.

Inmarsat end the day down 13½ at 655p after its largest shareholder Harbinger Capital Partners confirmed that it is considering a possible stake sale.

The Daily Telegraph reported on Saturday that the US hedge fund manager was considering disposing of some of its 28.1pc stake in the telecoms group.

After the market closed Harbinger announced that it would sell 13pc of its stake. Credit Suisse and UBS have been appointed to run the sale.

The 60m share sale will weigh heavily on the shares because many believed that Philip Falcone, who manages the hedge fund, had been plotting a takeover.

Mr Falcone said: "Inmarsat has been a terrific investment for Harbinger and its investors. Although we have determined that we are not going to make an offer for all of the company, I remain a strong believer in Inmarsat's future and am extremely happy to maintain a core position in the company's stock and our partnership with Inmarsat through LightSquared."

In addition, LightSquared, a US broadband and satellite network provider, said it would accelerate the implementation of its spectrum co-operation plan with Inmarsat.

BP dropped 10.4 to 430.1p after the oil major announced it is to borrow €2bn (£1.7bn) to help it prop up a $20bn fund to compensate the victims of its Gulf of Mexico oil spill disaster.

Premier Foods led the FTSE 250, which lost 28.66 points to 10,563.8, after the Hartley's jam to Branston pickle food conglomerate confirmed that it is has received approaches for its Quorn meat-substitute business.

A sale of the division, which makes sausages out of fungi, could net Premier £250m, which would help reduce its £1.4bn debt mountain.

Rumoured bidders include Nestle, Unilever, Danone, Campbell's and host of private equity firms.

Martin Deboo, analyst at Investec Securities, said: "This is probably the one business within Premier that will attract the likes of Unilever and Nestle and their attendant deep pockets and ability to transact quickly."

The shares end the day up 1.7 at 17.9p.

Wellstream Holdings, increased for a third day, climbing 15.5 to 789p after General Electric was named as the group that made an £800m bid for the Brazilian-focused oilfield services group.

The US conglomerate made the approach last month through VetcoGray, an Aberdeen-based oil services subsidiary.

Rentokil Intitial slipped 0.2p to 101.3p despite renewed rumours that a European company is planning a takeover of the pest control and parcel delivery group.

Among the minnows engineering group MS International put on 9.7 to 134.7p after it won a $28.6m contract to supply the US Navy with 30mm naval gun weapons system.

Encore Oil was boosted 7½ to 135p after it discovered a substantial column oil at the Cladhan field in the North Sea. Alan Booth, chief executive, said: "It is still too early to put a precise figure on how large the discovery might be, but we are now very confident that we have a potentially significant commercial accumulation."

View the original article here

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The politics behind all this is another story full of strange twists. No punches are pulled when discussing politicians of either party, the financial dangers they created, or the distractions they created later to escape their own responsibility for what happened when the financial house of cards in the financial markets collapsed.

What to do, now that we are in the midst of an economic disaster, is yet another story—one whose ending we do not yet know, but one whose outlines and implications are explored to reveal some surprising and sobering lessons.

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Super-rich buy gold by the ton

The world's wealthiest people have responded to economic worries by buying gold by the bar - and sometimes by the ton - and by moving assets out of the financial system, bankers catering to the very rich told Reuters, the news agency.

Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit.

"They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the Swiss bank's services for clients with assets of at least $50 million to invest.

UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around $1,314.50 an ounce on Monday, near the record level reached last week.

"We had a clear example of a couple buying over a ton of gold ... and carrying it to another place," Stadler said. At today's prices, that shipment would be worth about $42 million.

Julius Baer's chief investment officer for Asia is also recommending that wealthy investors park some of their assets in gold as a defensive stance following a string of lackluster U.S. data and amid concerns about currency weakness.

"I see gold as an insurance," Van Anantha-Nageswaran told Reuters. "I recommend 10 percent as minimum in portfolios and anything more than that to be used for trading purposes, to respond to short-term over-bought or over-sold signals."

Billionaire financier George Soros, echoing comments from investment guru Warren Buffett, last month described gold as the "ultimate bubble" because it is costly to dig up and has no real value except its market price.

But a rising price for the precious metal has in itself generated more and more demand from investors looking for a way to hedge against a fresh recession. Gold bears no yield and is uncompetitive in an environment of rising interest rates.

The uneasy outlook for inflation, hard currencies and global growth has triggered a five-fold increase in a physical gold fund launched by Pictet one year ago, the Swiss private bank said.

UBS's Stadler said the precious metal has become a staple of investors' portfolios, despite questions about whether it makes for a smart long-term investment.

"If you talk to ultra-high net worth individuals, that level of uncertainty has never been higher in the last two, three, four years," he said. "If they ask me, 'Is inflation going up or are we entering a deflationary cycle?,' I don't know. But obviously nobody knows."

Anthony DeChellis, managing director of Credit Suisse's Americas private banking unit, said at the Reuters summit in New York that clients are more interested in capitalizing on the rise in gold prices than using the precious metal as a safe-harbor investment.

"They're asking, 'If it's a bubble, how far can I ride that bubble,'" he said. "I cannot say we've seen a spike in gold interest, but there's an interest in the phenomenon of it."

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Yen weakens as Bank of Japan surprises markets with rate cut

For months, the central bank had eschewed government calls for more decisive action, such as buying more government bonds, focusing instead on a limited funding scheme.

But in the face of growing evidence that the yen's strength was hurting the economy, the Bank of Japan cut its overnight rate target to a range between zero and 0.1pc from 0.1pc and pledged to buy 5 trillion yen worth of assets.

It also said it would keep its benchmark rate effectively at zero until price stability is in sight. Core consumer prices have been falling from a year earlier since early 2009.

The purchases would roughly match the size of extra stimulus being considered by Prime Minister Naoto Kan's cabinet.

The assets, ranging from government bonds and short-term government securities to commercial paper and corporate bonds, would come under a temporary scheme that would also cover 30 trillion yen of such assets as collateral under an existing loan programme.

"The BOJ is bringing its monetary policy closer to quantitative easing, allowing market rates to hover near zero and pledging to keep a near-zero interest rate policy in the longer term until prices stabilise," said Naomi Hasegawa, senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.

BOJ policymakers have signalled in past weeks that they were considering a further easing of policy after Tokyo's intervention in the currency market in mid-September to check the yen's strength offered only temporary relief.

Most market players, however, had expected the central bank to opt for a relatively minor adjustment of its 30 trillion yen loan scheme that supplies banks with funds at its 0.1pc rate.

"These steps are more aggressive than markets had expected. The BOJ's decision is a surprise and will have an impact on currencies due to the message it delivers."

The surprise move weakened the yen against the dollar, pushed up Japanese government bond futures and helped stock prices turn positive.

The decision to cut interest rates was made by a unanimous vote, but board member Miyako Suda opposed the inclusion of government bonds among the types of assets the BOJ could buy using its pool of funds.

The BOJ is not the only central bank under pressure to do more to support an economy that is showing signs of faltering.

Financial markets expect the Fed to embark upon another round of asset buying to bolster a sluggish recovery as early as its November meeting. There are also calls within the Bank of England for further easing, although the bank has kept markets guessing on whether it will indeed do so.

In Japan, slowing export growth, a surprise fall in factory output and companies' worries that the strong yen may hurt the outlook have heightened the case for the central bank to ease policy.

The BOJ had already been edging nearer to quantitative easing by allowing the yen pumped into markets through currency intervention to remain in the financial system, instead of draining it.

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FTSE 100 edges up as travel, utility shares rise

TUI Travel, topped the movers list, with a jump of 4.8pc to 227.2pc after it reported "strenghtened" winter travel bookings.

The company, which released a trading update on Tuesday, stated that full-year results will be “in line with previous guidance” and in addition, that net debt is expected to fall. British Airways likewise rose 2pc to 243.9p.

Utilities climbed by 1pc on boosts to Centrica, National Grid and Severn Trent. Centrica, gaining 1.3pc to 326p, has embarked upon a pilot recycling project, which attempts to turn human waste into renewable gas at Didcot sewage works.

However, performance in utiliies and travel was offset by slumps elsewhere as Inmarsat led the loserboard with a fall of 4.35pc following the sale of 65m ordinary shares in the telecommunications group by US hedge fund Harbringer Capital Partners.

Trading volumes remained thin as investors stay cautious in anticipation of this week's US jobs report – which may provide clues for investors on the health of the world's top economy.

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Nestor Healthcare jumps on talk of raise offer

Shareholders had better not be too picky, though. Acromas is also looking at US-listed Allied Healthcare as part of its plans to consolidate the domiciliary care and healthcare staffing market.

Indeed, The Sunday Telegraph revealed that Acromas has been holding tentative negotiations with Allied Healthcare after it appointed advisers from US investment bank Oppenheimer to look at "strategic options" for the group. Sources, though, cautioned that Acromas has yet to make a formal offer for Allied Healthcare.

Overall, the FTSE 100 jumped by 79.79 points to 5635.76 and the FTSE 250 surged by 118.15 points to 10681.96.

Joshua Raymond, market strategist at City Index, said: "Better-than-expected service sector data out of the UK and eurozone helped indices across Europe. News that the Bank of Japan may expand the size of funds its uses to buy assets and stimulate its economy is also boosting stock demand."

British Airways climbed to the top of the blue-chip leaderboard after better-than-expected traffic figures. The airline's shares surged 15½ to 254.6p after it revealed a 1.3pc increase in revenue passenger kilometres for September, helped by an increase in first and business-class travel. The rise is the biggest gain since August 2008, the month before the collapse of Lehman Brothers.

Citigroup upgraded technology group Invensys to "buy", which helped the shares gain 9.2 to 307.2p. Mark Fielding, an analyst at Citigroup, said: "Concerns over its late cycle nature and the risks to growth in rail have weighed on the shares over the last year. However, our analysis suggests continued growth... at rail. When this is combined with recovery continuing across the rest of the portfolio we see renewed attractions in the share."

InterContinental Hotels Group advanced 19p to £11.46 as JP Morgan Cazenove gave the stock a push on valuation grounds. Tim Barrett, an analyst at JP Morgan Cazenove, said: "The outlook for 2011 is favourable and likely to be an increasing focus for investors after Marriott and Starwood publish 2011 guidance with their third-quarter results. We believe low supply growth in 2011 is likely to support [revenue per available room] growth of between 5pc and 8pc in 2011."

BT Group put on 2.7 to 148½p amid talk Ofcom will this week announce a decision on superfast broadband that is likely to be favourable to the telecoms company.

Tui Travel rallied 9.1 to 225.9p after it said in a trading update that it had a good summer and bookings were picking up. Elsewhere in the sector, rival Thomas Cook increased 6.7 to 179¾p.

Hedge fund group Man Group perked up 9½ to 227.1p after it said its Athena Guaranteed Futures rose 0.55pc last month and had risen 10.5pc over the past 12 months.

Gold mining stocks were in vogue as the price of the precious metal flirted with a fresh high. Randgold Resources climbed 195p to £66.55.

Rising risk appetite gave base metal mining companies and banking stocks a lift. Anglo American put on 103½p to £26.41 and Barclays edged up 9 to 308.8p.

Aviva advanced 3.4 to 396.2p despite the fact that Bank of America Merrill Lynch argued that the latest "bid" related spike in the transport group's shares will unwind as the likelihood of any corporate activity lessens.

On a less positive tack, Inmarsat fell 26 to 629p. After the market closed yesterday, Harbinger Capital confirmed it had sold 65m shares - about 14pc of the company – at 630p a share in a move that raised £410m. The share sale was larger than expected and triggered speculation Harbinger could sell the rest of the its holding once the 180-day lock-up expires.

Among the smaller companies, Computacentre jumped 22.9 to 322.9p as Investec upgraded the stock to "buy" from "hold". "We believe earnings quality has improved through operational efficiencies, managed services traction and cost savings. The outlook suggests a continuation of these trends, reasonable revenue progress and modest forecast momentum," said Julian Yates, an analyst at Investec.

"Buy" advice from Barclays Capital lifted Carphone Warehouse 3¼ to 266p. Karen Howland, an analyst at Barclays Capital, said: "We expect Carphone Warehouse to report another set of strong figures during its second-quarter results on November."

Homeserve also rallied 17.1 to 459.1p after Credit Suisse took up coverage with an "outperform" rating and a 720p price target. Analysts at Credit Suisse said: "HomeServe offers one of the most compelling combinations of growth, profitability and value in Europe."

Weir Group put on 33p to £14.86 as Bank of America Merrill Lynch argued it is likely to offer "superior growth" in an economic cycle that is "settling down".

However, oil services company Wood Group slipped 3.3 to 424.6p as Morgan Stanley downgraded it to "equalweight". "The recovery we identified in engineering as the key 'swing factor' for its earnings recovery in 2011 is being priced in," said Martjin Rats, an analyst at Morgan Stanley.

Vallar, Nat Rothchild's investment vehicle, is still trading below its issue price of £10.00 a share. When Vallar floated in July, investors had high hopes for the financier's plans to consolidate some of the mining sector. However, Vallar, up 15 to 920p, has failed to carry out a transaction since its float and some investors are preparing to kick up a fuss if the shares fail to move higher.

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US shares rally on stimulus hopes

 Investors? confidence was lifted holding of interest rate in Australia, Japan cutting rates to zero and calls for the Fed to do more to spur growth.

The Dow Jones Industrial Average closed up 193.45 points, or 1.8pc, at 10944.72, its strongest since May 3. The Standard & Poor’s 500 fared just as well, ending up 2.1pc at 1160.75.

Investors’ confidence was lifted on a day that began with Australia’s central bank unexpectedly deciding to keep interest rates on hold, rather than raise them, and ended with Charles Evans, the president of the Federal Reserve Bank of Chicago, arguing that the Fed must do more to spur growth in the world’s biggest economy.

In between, the Japanese central bank delivered a surprise rate cut and pledged to buy more bonds. The Nikkei 225 index closed up 1.5pc at 9,518. 76 as did markets across Europe. The FTSE 100 finished 79.79 points higher at 5,635.76.

“Central banks didn’t have a choice but to take steps like this, and it’s what the market wanted to see,” said Uri Landesman, president of Platinum Partners in New York.

However, it wasn’t just central bankers that lifted markets on Wall Street. A widely-watched index of America’s services industry from the Institute for Supply Management rose more than expected last month.

Investors also eyed with some optimism the third-quarter earnings season for US companies, which aluminium producer Alcoa kicks off on Thursday.

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FTSE 100, global markets rise on hopes of more stimulus

By midday, the London's benchmark index was up 41.12 points, or 0.7pc, to 5,676.88, following gains of 1.4pc on Tuesday, its highest close since late April.

Miners were the biggest support to the index as gold hit a record high and copper rose to its highest since July 2008 as the demand outlook brightened on expectations that governments would do more to stimulate the global economy.

Antofagasta, Xstrata, Anglo American and Kazakhmys added 3.6pc to 4.2pc.

The Bank of Japan unexpectedly cut interest rates on Tuesday, supporting a view that other governments will act further to bolster economic recovery.

The Nikkei rose 1.8pc overnight to 9691.43, while in lunchtime trading in Europe, France's CAC 40 and Germany's DAX were both up more than 1pc.

In London, Energy firms were also stronger with crude oil hitting its highest level in five months. Royal Dutch Shell gained 1.4pc.

In the United States, the Institute for Supply Management's index showed the pace of growth in the US services sector accelerated more quickly than forecast in September, while hiring also picked up.

German manufacturing orders rose in August by 3.4pct on the month, surpassing forecasts.

"Macro stuff like the industrials order number is giving heart to the bulls while the bears are getting squeezed," Giles Watts, head of equities at City Index, told Reutuers. "There's a feeling that the market can keep going higher at the moment."

A survey by the British Retail Consortium showed that a jump in the cost of agricultural commodities drove British shop price inflation to a five-month high in September.

Autonomy was the top faller, down 12pct after it said it expected to review its full-year internal model with a revenue reduction of around 3pc. This wiped out most of the 16pc rise seen in September.

Sainsbury was also among the top fallers, down 1.1pc, after reporting sales at the top end of forecasts.

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Mining shares lift FTSE 100, buoyed by bullish outlook for commodities

Meanwhile, currency concerns relating to the possibility of renewed QE and a prolonged period of negative real interest rates in the US are likely to drive strong investment demand for gold and silver, said Morgan Stanley.

Xstrata – which rose 46½p to £12.86 – and Kazakhmys, up 56p to £14.83, are the broker’s top picks from the London market.

African Barrick Gold also climbed 22 to 638p as Morgan Stanley raised its price target to 762p from 668p to take into account higher gold price forecasts and the prospect of a re-rating following third-quarter results on October 22, which the broker thinks should restore confidence in the company after the production issues in the second quarter.

Hannah Kirby, an analyst at Morgan Stanley, said: “We expect African Barrick Gold to report that Buzwagi is back on track given the corrective measures put in place at the mine. The resulting July run rates from Buzwagi also suggest that this is the case.”

Overall, the FTSE 100 moved 45.63 points higher to 5681.39 while the FTSE 250 jumped 118.27 points to 10800.23.

British Airlines put on 11½ to 266.1p as Barclays Capital raised its target price to 350p from 320p in the wake of strong traffic figures released earlier in the week.

A JP Morgan Cazenove upgrade to “buy” boosted Capita. The broker argued that near-term risks from public sector spending cuts are diminishing whilst the longer-term opportunities are increasing. The shares were also given a boost by a contract win. The company said it has been appointed by West Sussex County Council as the authority’s IT Infrastructure partner. The seven-year contract is worth £56m. The shares rose 13½ to 792p.

Inmarsat rallied 15 to 644p after Barclays Capital upgraded the shares to “equal weight”, arguing that risks to the company are fully “priced in” the shares.

Tesco benefited from Credit Suisse raising its price target to 500p from 460p. “Our initial big picture reaction to the results and analyst meeting was of a company now emerging from recession (albeit some countries/divisions faster/slower than others) more confident of now delivering higher returns,” said analysts at Credit Suisse. Tesco advanced 9.4 to 440.6p.

Property stocks made it onto the leaderboard as Nomura upgraded the sector to “neutral” from “bearish”. Mike Prew, an analyst at Nomura, said his contrarian forecast of a dip in commercial real estate values is now fully priced into share ratings and should be limited to around 5pc by extraordinarily low long-term interest rates.. Hammerson perked up 10.3 to 412p while Land Securities put on 13 to 676p.

On a less positive tack, Autonomy plummeted 301p to £15.51 after the software company lowered its forecast for full-year revenue by about 3pc. Goldman Sachs took the company off its “conviction buy” list and Numis downgraded the stock to “sell”. Analysts at Numis said yesterday’s statement indicates that product revenue will fall between 10pc and 15pc in the fourth quarter.

Among the second liners, a better-than-expected trading update and traffic figures helped Easyjet take off. The shares climbed 46.4 to 433.3p.

Charter International added 25 to 747½p following news that Thermadyne, a US listed metal cutting and welding products manufacturer, accepted a $422m bid from Irving Place Capital, a private equity firm. Numis advised clients to buy Charter as the broker believes M&A is still a theme for the sector and UK engineering companies are “in play”.

Ladbrokes also gained 1.6 to 136½p despite a Credit Suisse downgrade to “underperform”.

However, De La Rue slipped 12½ to 643p as UBS reiterated its “sell” rating on the stock. UBS analysts said they believe De La Rue will lose part of the India contract gradually over the next two years as suppliers increase capacity and India builds up its own capacity. As a result they cut their forecasts by a further 10pc.

UBS also continues to see downside risk as we do not know the profit contribution from India and expects the reputational damage to linger for quite a period of time.

Gemfields jumped 5¼ to 10½p after full-year results showed soaring emerald sales. The company sold just under $20m worth of the green gemstone, against less than $1m the previous year, as the market for the gems recovered.

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LSE Chief said London aim at risk "jealous" European market

Xavier Rolet said it was vital for the British convince Europeans that their capitals would not benefit from a reduction in importance of London as a financial centre continental.

Xavier Rolet stated in the Commission of the Treasury as "unique" of Alternative Investment Market London (AIM) to raise funds for small businesses and fierce needed jobs against Europeans.

First banker of Lehman Brothers said that there was "rivalry" between London and other European capitals, adding that European regulators "does not include" goal success.

"London has succeeded to wire the decades and grown into a prominent centre," said Mr. Rolet. "I don't know if the Europeans hold a grudge, but I can tell you that some people see an opportunity through the process of regulatory harmonisation greenhouse return some business".

Mr. Rolet said it was vital for the British convince Europeans that their capitals would not benefit from a reduction in importance of London as a financial centre continental."If regulations are introduced that cause traders and companies leave London, which is unlikely to migrate to Paris, Frankfurt, Milan,", he said. "He will go to Asia and elsewhere.»

He told MEPs proposals for the financial restructuring of the British Columbia Colombia Government threatened to vulnerable AIM market.

Rather that divide the responsibilities of the authority list UK (UKLA) between the Bank of England, the financial reporting Council (FRC), the protection of consumers and markets (CPMA), M. Rolet argued that it must remain intact in the CPMA .essentiellement CPMA is set on the United Kingdom voice on the new super regulator of Europe, Mr. Rolet supports should also speak directly to the UKLA.

Baroness Hogg, the pattern of the RHS has previously disagree with Mr. Rolet.Mais testify to the after him, she admitted that regulatory plans were "sub-optimal."

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Talk of the town: Permira rumour is supported for BinckBank approach

Today, reports suggest that London broker Evolution and ING are preparing bids for BinkBank.

However, market sources informed of said sites are not necessarily corriger.Le speech is BinckBank has already received an offer of Permira based in London at €14.5 a share.

Council, however, is supposed to have pushed the advances of Permira and has hired an investment bank to look at "strategic options".the move could lead to a sale by auction, market sources.

BinckBank refused to comment.

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FTSE 100 gains but concerns expenditure struck small caps

But analysts at Numis Promethean "add" to "buy". Commenting on prospects for management of company Whiteboard on the American market, analysts said: "we are pulling our forecast return to take account of this and an expectation of a further deterioration of here."

Axe public for Chancellor George Osborne spending hit Mouchel, which tumbling 38 p-, or 30 16pc - 88 percent as the company, which allows the Government to maintain highways and provides advice to local authorities, said that the immediate prospects remain displayed as Mouchel incertaine.Bien loss throughout the year, told that it was informed to benefit from an increase in subcontracting anticipated.

But blue-chips felt more healthy Thursday, WINS points 31.87 5677.89, results forecast-beating of Royal Dutch Shell helps lift sentiment.

The oil giant has increased from 10 p to £ 19.87 after a break for the benefit of the third quarter, thanks to rising prices for oil and gas.

Performance of shell illuminated other stocks with Essar energy reaching 7½ 543 p .but energy company focused on the Indian also had its own news announcing that he planned to increase the capacity of its plant to Vadinar.

After taking a blow earlier this week, chipmaker ARM Holdings is in demand, accusing the blue-chip leader Commission increased by 11.6 to 372 p.

H2O markets reiterated their position "buy" on the business of Cambridge, saying that he is exceptionally well placed to benefit from continued demand in smartphone and iPad markets.

Insurers are also supported with prudential WINS 17 630½p, Admiral 24 p to £ 16.35 and Standard Life reaching 3.1 226.9 p.

Panmure Gordon analysts Thursday reiterated their positive life insurance sector UK, with a rating of "buy" on prudential attitude.

But the broker has maintained a "hold" on the Standard Life, although worn his price target to 240 p 225 p.

"After share prices fall in 2nd quarter 2010, the sector has rebounded in the third quarter, largely following the resumption of stock markets," said analysts.

"From life insurance looks set to benefit from the relaxation of fears about the impact of [new capital requirements] and double-recession, which in turn facilitates the concerns of the default corporate bond sector."

Blue-chip heavy that Vodafone was lifted p 4.4 170.7 through solid results of peer channel, France Telecom, whose results third quarter exceeded forecasts of analysts. ""France Tel showed strength in France and Spain and KPN showed the German market was also performing all markets key for Vodafone," said analysts in the execution of noble.

But at the other end of the spectrum, pharmaceutical companies were as after AstraZeneca showed generic competition had improperly revenues for the third quarter.

Britain's second drug manufacturer slipped 106 p to £ 31.39½, while GlaxoSmithKline decreased 11½p to £ 12.33 sympathy and manufacturer of the medical device, Smith & Nephew abandoned to 13½ to 560 p.

21.55 Points 10848.83 acquired mid-cap market and among stars of index was crucial to SVG, checking up 13.1 to 202½p after the company stated that its net asset value increased close to one-fifth to the third trimestre.Analystes Liberum said it was a good quarter as labour Permira and SVG had to reduce the debt and drive growth private equity income repayment.

But lagging Thursday Croda International, fell 45% to £ 14.70 despite posting strong third trimestre.Le manufacturer of chemical products for customers including Estée Lauder was downgraded by Brewin Dolphin to "hold" "add" for reasons of assessment results.

Housebuilders fell after the Nationwide figures showed that housing prices continued to fall that buyers have remained away from the marché.Taylor lost 0.4 to 22.93%, Barratt Developments Wimpey fell 1.3 to 78.15%, Bovis Homes fell from 5.9 to 349 p and Redrow shed 1.9 to 114,3 p.

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Objective principal Marcus Stuttard defends market junior claims "volatility".

This week, value doubled Petroleum desire on speculation on oil find - despite no information publicly available on the market.

However, Marcus Stuttard, head of the defended on the London Stock Exchange aim market junior of the city as a stable place to do business.

"One of the reasons monitor us the market and share price movements is to ensure that there is known by the company may be disclosed", he said.

It is not within the competency in order to stop any person displaying false rumours on the internet, bulletin boards, but it can - and - report concerns the financial authorities.

"If we suspect any type of abusive behaviour or see any sign of concern we refer to the regulatory body."In some cases we provide information help regulatory agencies to further their investigations.

Mr. Stuttard disputes the idea that there is a widespread problem.

"If there is no a strong level of confidence in the market, then we see the high level of support of investors we."

"Actually, much emphasis has been to try to increase the liquidity on the but.Ce we have a tendency to find growth markets, need more buy and sell orders."

Last year, market combined corporate AIM values totaled of £ 59bn.Toutefois Dynamics raise capital has evolved over the ans.En 2006, £ 9. 6bn was raised by selling, more than £ 5. 7bn in trésorerie.Cependant, calls in the market this year, it was only 800 m £ 5.3 £ 4 in share offers and sales.

Mr. Stuttard believes it is still obliged to wider markets State account success.

"In most markets growth very little has been raised, while we raised a total of £ 5. 5bn.".

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Stimulus talk weighs on UK gilt yields

The yield fell 8 basis points to 2.89pc after a weak US jobs survey boosted speculation that central banks worldwide could provide a second wave of monetary stimulus.

The ADP Employer Services report showed the US economy unexpectedly shed 39,000 private sector jobs in September, confounding expectations for an increase.

The figures had a particular resonance because they came two days before the US government’s official monthly employment release and after top Charles Evans, a top US Federal Reserve official, was quoted in the Wall Street Journal as saying the US central bank should do “much more” monetary easing.

“We’re seeing a continuation of the bullish theme that is being driven by real money investors,” said Matteo Regesta, rates strategist at BNP Paribas.

Mr Regesta said gilts were benefiting not just from growing expectations of more quantitative easing in the United States but also from anticipation Britain’s government would maintain its tough deficit-cutting line in its Comprehensive Spending Review on October 20.

“The government is under a lot of pressure to deliver on fiscal tightening,” he said. “That, combined with a weak recovery, is providing support to gilts.”

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Australian dollar hits 27-year-high

This afternoon the dollar hit 98.74 US cents, the highest level since January 1983, when the currency was first floated and valued at 97.65 US cents.

At the local 5pm close, the Australian dollar was trading at 98.36 US cents. It was also buying 70.7 euro cents, 62 pence and 81.6 yen.

The dollar was strengthened by monthly government figures that showed the unemployment rate steady at a low 5.1 per cent in September, with 49,500 new jobs created in that month, well ahead of forecasts.

Most of the new jobs were reported to have been created in the booming domestic mining industry.

The value of the dollar rose by 8.3pc against the greenback in the past month as speculation that the US Federal Reserve would expand its economic stimulus programme.

Analysts in Australia now expect the dollar to reach parity with the US dollar in the next few months.

Craig James, an economist at CommSec, told the Australian Broadcasting Corporation that the Australian dollar had benefited from a strong local jobs market and the prospect that the Reserve Bank would raise interest rates in October.

He said that consumers, motorists and Australians travelling on overseas holidays would benefit from the strong dollar, but that the local tourism market and exporters would suffer.

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Utilities stocks fail to boost lethargic FTSE 100

Leaping Board winners in wake of Scottish & South were reaching 10.4 percent 332.2 Centrica and National Grid ticking up to 6½ to 590 p.

But the utility companies failed to lift the blue-chip dull swung between gains and losses and ending almost flat.

The FTSE 100 lost 2.73 points investors 5675.16 marked time in advance of the meeting of Federal Reserve hotly awaited next week.

Languish at the head of the losers league table has British Airways, which nose dived 10 to 270.7 percent despite the swinging in the dark. Panmure Gordon analysts have been sticking to their "hold" rating, saying: "Momentum has been strong in the price of shares, powered by revenues, particularly in terms of demand for premium environment improved yields, ATI approval for the transatlantic joint venture with AA and Iberia and planned with Iberia merger".

Minors were also lower with Xstrata losing £ 12.09½ and Rio Tinto excretion 69½p 40½p to £ 40.36.

Having a better day was insurers with Aviva putting on 5.4 398.1 p Goldman Sachs reiterated its "buy belief" on shares.Next Tuesday, Aviva will report its results for the third quarter, which analysts believe will support the case of investment.

"In our opinion, the significance of the number of sales down played b.c market ' is understandable, because they have little bearing on the position of the group, capital dividend paying capacity and resilience in a prolonged low interest rate environment" said broker. "While the body is very focusing market better than expected sales of Aviva markets of Europe and the UK-based show some sustainability gains and that review group or the transition to the Solvency II are not disturbing the underlying transactions.»

Also benefit from a burst of Goldman Sachs was GKN, which rose 3.3% 177.3.Dans a note of the European automotive sector, the broker reiterated its "buy" rating on the manufacturer of parts for cars and planes and raised its price target to 285 p 220 p.

Travelers small caps automobile-related, was flat at 61 automotive dealer p.Le stated that he had seen a solid third quarter through its parts car combined with the increase in sales of new and used vehicles.

Earlier this week, there have been whispers of private investment capital interest in Miss, but Chief Executive, said Friday that they had received no offer.

Among second linings, Hikma Pharmaceuticals seeking particularly healthy, pulling 49½ at 786 p after it struck an agreement with Baxter International, American Society of health care.

Listed on the FTSE 250 Jordan-based undertaking bought Baxter us generic injectibles unit 112 m $, double the size of Hikma US business and giving more 14pc market.

Analysts said the acquisition will position Hikma as the second largest supplier of injectibles to the United States Citigroup.

"Existing expertise Hikma injection and desire of Baxter to divest non-core assets produced an attractive and financially reasonable agreement in our opinion," said the broker who Hikma "medium risk.

Oil and gas services company, hunting, has been on the rise too, breaking 41½ in 644½p .Chasse whose equipment is used in the construction and maintenance of oil, said shale drilling activity and demand for components in the West and to the Brazil he developed able top year-round market expectations.

Their "buy" rating on hunting and raised the prices kept RBS analysts 670 p 630 p.Le Broker target stated that in a context of market improvement, hunting was performing well.

But punters took their money out of the table for Partygaming, sending internet business down 10.8% 251.9 gaming.

Excitation of bidding pushed shares in resources from Berkeley to hereditary 112½p as Russian steel giant, Severstal, approached Berkeley on a possible takeover of uranium, a value on an exploration company 304 million senior dollars.Atout Berkeley is a project of uranium from Salamanca, Espagne.Severstal envisages a cash bid to $2.00 at Berkeley, appearing also in Sydney.

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Wave of placings signals FTSE 100 near peak

Elsewhere, wealth management group Hargreaves Lansdown fell 18.9 to 452p as Stephen Lansdown raised £58m by selling almost 3pc of the company. Broker Numis Corporation placed 13.5m shares at 429p, reducing Mr Lansdown's personal stake to 20.1pc.

Yesterday's deals follow a string of other share sales earlier in the week. Harbinger Capital sold a 14pc of its stake in Inmarsat, down 7½ to 636½p, while Vladimir Kim, chairman of Kazakhmys, disposed of 11pc of his shareholding in the mining giant to the Kazakh government, pocketing nearly $1.3bn in the process.

It was not just the London market that has seen a huge rise in placings. In continental Europe, Renault sold most of its stake in Volvo, raising €3.01bn.

Overall, the FTSE 100 shed 19.26 points to 5662.13 and the FTSE 250 lost 34.61 points to 10765.62.

Antofagasta was under pressure, retreating 64p to £12.49. as Citigroup downgraded the shares to "sell" on valuation grounds. The broker advised clients to seek cheaper copper exposure through its top selections in UK mining of either Xstrata, down 26½p to £12.60, or Anglo American, which fell 87½p to £26.64.

Other mining stocks were on the backfoot following strong gains earlier in the week. Rio Tinto slipped 61p to £38.65.

Some banks were in the doldrums after Halifax found that house prices plunged in September by the most since its records began a quarter of a century ago. The Halifax said that "renewed uncertainty" about the British economy caused the average cost of a home to fall 3.6pc from August. Lloyds Banking Group gave up 2.4 to 73.9p and Royal Bank of Scotland lost 1.6 to 47.8p.

The negative sentiment also weighed on some of the housebuilders, too. Barratt Developments declined 4.4 to 94.8p.

In the tobacco sector, Imperial Tobacco slid 5p to £19.05 despite a push from Morgan Stanley, which reiterated its overweight rating. Toby McCullagh, an analyst at Morgan Stanley, said: "The company's relative organic growth prospects are better than the market expects". He added rapid de-leveraging, incremental cost savings post realisation of the Altadis synergies and successful international partnering could add a further leg to Morgan Stanley's investment case.

Among the risers, ICAP perked up 7.1 to 456.6p as Evolution reiterated its "buy" rating on the shares. Bill Barnard, an analyst at Evolution, said: "We feel September's electronic trading data (... 3rd highest month after April and May, which were dominated by the sovereign debt crisis) helps to underpin our first-half and full-year forecasts as well as supporting our view that a cyclical recovery is well underway at ICAP."

Marks & Spencer surged 19.2 to 410p after it reported second-quarter sales growth that beat analysts' estimates and that it won market share in clothing.

The rest of the retail sector was also in vogue thanks to the positive sentiment generated by the Marks and Spencer figures. Home Retail Group put on 4.8 to 214.9p and Kingfisher climbed 2.9 to 232.3p.

J Sainsbury, meanwhile, edged up 0.3 to 387.4p as Credit Suisse raised its target price to 330p from 300p. The broker, though, reiterated its "underperform" rating on the stock.

Halfords was hit by a broker downgrades following its trading statement, which showed second quarter sales had fallen 6.3pc due to teething problems at a new distribution centre. KBC Peel Hunt downgraded the stock to "hold" from "buy". "With questions over bike ranges and Autocentre trading, coupled with poor market communication, we see the shares struggling for support," John Stevenson, an analyst at KBC Peel Hunt. The shares tumbled 39 to 408p.

Petropavlovsk shed 66 to £10.71 on talk it is having major production problems and is unlikely to meet its own full-year forecasts.

Heritage Oil also slipped 3.7 to 322p despite chatter it will soon announce a positive drilling update.

However, Mulberry perked up 27½ to 440½p after the maker of Bayswater luxury handbags after the company said its full-year results are expected to significantly exceed market expectations.

Antrim Energy jumped 8 to 70½p after it announced a joint venture with Premier Oil, down 1 to £16.74, to look at developing it Fyne asset in the UK North Sea.

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Banks and commodities drag FTSE 100 into red

Banks were the biggest laggards as an effective stake sale by a key Abu Dhabi investor in Barclays helped send its shares down 2.5pc.

Abu Dhabi exercised 131.6m warrants in the bank, equivalent to a 1.1 pc stake, and simultaneously entered into a hedging arrangement with Nomura, it said in a statement after Thursday's close.

Energy stocks were also languishing as crude prices fell by $1.30. BP shares fell 0.9 pc. Miners retreated after early gains as nerves set in ahead of the payrolls data. Rio Tinto lost 0.7 pc while silver miner Fresnillo fell 4.6 pc.

By midday, the FTSE 100 was 47.82 points lower at 5614.50, after it closed 0.3pc lower on Thursday on a wave of placings and block trades, signalling that some investors reckon the market has reached its peak.

On Thursday, Kazakhmys was the worst performer after broker Credit Suisse sold 9.35m shares – 1.75pc of the company – on behalf of the Orleans Trade & Investment Corporation (OTIC). Vladimir Ni, a non-executive director of Kazakhmys who died in the summer, had transferred 9.35m shares to OTIC.

Lloyd's of London insurer Catlin also dipped 16½ to 325p as Morgan Stanley placed 14m shares – around 3.9pc of the company – at 325p. Traders reckon the seller and buyer were long-only instiutions.

Thursday's deals follow a string of other share sales earlier in the week. Harbinger Capital sold a 14pc of its stake in Inmarsat, down 7½ to 636½p, while Vladimir Kim, chairman of Kazakhmys, disposed of 11pc of his shareholding in the mining giant to the Kazakh government, pocketing nearly $1.3bn in the process.

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