MARKET COMMENT: FTSE 100 Ends Up For Fourth Consecutive Day

LONDON (Alliance News) - The positive sentiment from the end of last week spilled over onto Monday, with London stocks closing higher and the FTSE 100 index marking its fourth consecutive day of gains.

Major indices closed higher across Europe, and were also up in the US, although with little in the way of fresh economic data to drive markets, individual stock news was in focus.

The FTSE 100 ended up 0.7% at 6,611.25, the FTSE 250 up 0.9% at 15,596.23, and the AIM All-Share lagged, gaining only 0.2% to 723.26. In Paris, the CAC 40 gained 0.7%, while the DAX 30 closed up 0.5% in Frankfurt.

Wall Street was higher at the European close, with the DJIA up 0.2%, the S&P 500 up 0.3%, and the Nasdaq Composite was up 0.4%.

Serco Group was, by a considerable distance, the worst-performing stock on the FTSE 250 after it identified GBP1.5 billion in impairments, cut its earnings forecasts for the next two years and announced a rights issue of GBP550 million to shore up its balance sheet. The company closed the day down 32%, having hit its lowest price since September 2004.

Cairn Energy was the best-performing stock in the mid-cap index, closing up 12%, after it said it has made a second oil discovery in its exploration programme offshore Senegal. Results from the SNE-1 well showed a 95 metre gross oil bearing column with a net oil pay of 36 metres. Preliminary estimates for the contingent resource range from 150 million barrels of oil to 670 million barrels of oil, and the oil and gas explorer is hoping to reach further targets as it continues drilling.

Liberum analyst Andrew Whittock said the discovery should put greater confidence in Cairn's operations in Senegal.

FTSE 250-listed AVEVA Group closed up 7.5% after reiterating its full-year expectations, despite a "disappointing" first half performance in which pretax profit fell on lower revenue. It also raised its interim dividend to 5.5 pence per share from 5.0 pence a year before.

Specialist insurer Just Retirement Group was another big gainer in the FTSE 250, closing up 4.8%. The company said it has generated GBP25 million in defined benefit sales in the first quarter, including a GBP75 million deal announced in October with an undisclosed client, and announced a further defined benefit sale of GBP76 million which will be completed later this week. The group also said sales volumes post the first quarter are in line, except for higher defined benefit sales, and said it maintains its outlook for the year, "despite difficult market conditions".

In the FTSE 100, Tesco was the best performing stock, up 4.6%, after Bernstein upgraded it to Outperform from Market-Perform, with a price target of 235.00 pence. The UK grocer closed trade at 192.65p.

Meanwhile, rival J Sainsbury closed as the biggest faller in the blue chip index, down 2.7%. Cantor Fitzgerald lowered its price target on the company to 275.00 pence from 320.00p, saying it expects the grocer to cut its dividend, which would mark a significant shift away from its previous strategy. Sainsbury's closed trade at 253.78p.

In the economic calendar, Japanese balance of trade and bank lending data is still to be released Monday at 2350 GMT.

Tuesday's calendar is also fairly light. Japanese Cabinet Office surveys for October will be released at 0500 GMT and Japanese machine tool orders for the same month is at 0600 GMT. US NFIB business optimism index for October will be released at 1230 GMT, while the US Redbook index for the week ending November 7 will be at 1355 GMT.

In the corporate calendar, there will be half-year results from commercial property company Land Securities Group, mobile telecommunications giant Vodafone Group, and fellow telecommunications company TalkTalk Telecom Group, amongst others.

By Neil Thakrar; neilthakrar@alliancenews.com

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