Market report: Friday close

Michael Clark12 April 2012

STOCK market bears moved in for the kill on

Vodafone

The shares tumbled 10 1/2p to 98p, their lowest since February 1998, in pre-market trading as more than 800m changed hands.

The plunge came after broker UBS Warburg lowered profit contributions from the group's German and Italian subsidiaries by 5%. This is expected to force the company to revalue its many minority holdings in mobile operators around the world. This could prompt fresh selling by institutional shareholders as they adjust their weightings in the firm.

Vodafone's problems were compounded by speculation that US securities house Goldman Sachs is poised to downgrade its earnings forecast. This turn of events will be watched eagerly by spread bookmakers, who have been making odds on when Vodafone would close below 100p. Hedge funds have also taken big positions.

The group's fortunes have changed drastically since the salad days just after the millennium. At the time, Vodafone had acquired German rival Mannesmann for £19bn, catapulting its share price to 400p, making it Europe's biggest company with a price tag of more than £200bn. Since then, the shine has worn off the sector with high levels of debt and the huge £20bn-plus forked out for 3G licences taking a heavy toll on sentiment.

Other mobile operators came under pressure. Orange was down 17 1/2p at 362 1/2p while mmO2 traded 2 1/2p lower at 45p.

Logica, which supplies text messaging software, shed 19 1/2p to 306 1/2p after a profits downgrading by broker ING. The plight of Vodafone, one of the biggest constituents in the index, failed to drag back the rest of the market. But prices traded below their best levels after the latest US unemployment numbers showed the biggest rise for almost eight years. The Dow responded this afternoon with opening falls of almost 100 points. The FTSE 100 ended 29 points up at 5203.1.

The buyers came in for the High Street banks, attracted by their strong yields. Abbey National led the way with a rise of 36p to 1132p, followed by market favourite Royal Bank of Scotland, up 52p at 2060p, Barclays, 11p to 624p, and Lloyds TSB, 16 1/2p to 817p.

Building supplies group Wolseley stood out with a rise of 25p to 727p. Director John Whybrow has bought 25,000 shares at 707p. Wolseley is poised to give a rundown of current trading prospects to brokers.

Colt Telecom ran into profit- taking, falling 3p to 44p as more than 55m shares were traded. The price had come up from 33p during the past week ahead of yesterday's first-quarter numbers. Now there is talk of a possible merger with rival Telewest, down 0.15p at 10p.

There seems to be no stopping model railways maker Hornby, however, up another 34p at 439p, following its upbeat trading statement yesterday in which the group said results for the year just ended would significantly exceed current market expectations.

No-frills airline easyJet climbed 21p to 472p before announcing plans to bid for rival Go.

Millwall fell 0.32p to 0.54p after the south London club lost to Birmingham in the First Division play-offs.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

The Daily Mail's Geoff Foster on yesterday's trade
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