Market report: Tuesday close

Michael Clark12 April 2012

CITY investors were crossing their fingers today, hoping we may have reached a turning point in the equity market's fortunes. Their hopes have been raised by one of the City's biggest players, which appears to be turning increasingly bullish of prospects following the losses of the past two-and-a-half years.

Broker Credit Suisse First Boston has decided to raise its exposure to the equity market to 15%. That compares with as little as 5% for some of its rival players, who are happy to leave their spare cash on deposit. CSFB was today urging clients to move out of retailing following the sector's recent strong run and into areas such as pharmaceuticals and utilities because of their strong yields and their poor share performances of late.

Drugs giant GlaxoSmithKline responded to the news with a jump of 21p to 1372p while rival AstraZeneca put on 50p at 2684p. Companies such as United Utilities, up 7 1/2p at 617p, are also likely to benefit from CSFB's advice along with National Grid, up 6p at 470p.

A futures-led mark-up saw the rest of the market reverse yesterday's falls. Fresh opening gains for the Dow over in New York following upbeat news from Boeing helped underpin sentiment. The FTSE 100 index rose 89.1 points to 4631.0.

Advertising agency WPP rallied 18p to 571 1/2p following yesterday's gloomy trading update. Chief executive Sir Martin Sorrell warned there was unlikely to be a recovery in advertising revenue until 2004 at the earliest.

Financials also regained some lost ground with Barclays adding 11 1/2p at 540 1/2p, Amvescap putting on 8 1/2p to 533p and Lloyds TSB 27 1/2p to 660p. Northern Rock climbed 24 1/2p to 673 1/2p with broker Merrill Lynch raising the shares from buy to strong buy with a 12-month target price of 800p.

Smiths Group rose 10p to 835p following a presentation to institutional shareholders. It focused on growth opportunities for the aerospace and medical divisions.

On the grey market, shares of fashion group Burberry lost some of their impetus. Spread bookie Cantor Index has reduced its spread from between 280p and 285p to between 270p and 277p. That compares with the range of 230p to 290p at which the issue is expected to be priced. Reed Elsevier firmed 8p to 627 1/2p. Broker Dresdner Kleinwort Benson has raised its recommendation from add to buy and the target price from 610p to 710p.

Oxford GlycoSciences fell another 18 1/2p to 281 1/2p following yesterday's decision by the US Food and Drug Administration to reject its new cancer treatment Vevesca. US securities house Lehman Brothers has downgraded the shares from strong buy to buy and slashed its 12-month target price from 900p to 360p.

It has also reduced its peak sales for Vevesca from £90m to £2m. Rival Goldman Sachs has downgraded Oxford Glyco from trading buy to market performer.

Scottish & Newcastle fell 6 1/2p to 621 1/2p as US securities house Morgan Stanley told clients it was a sell having outperformed the index in recent months.

Tobacco giant BAT dipped 15p to 725p amid fresh fears about cancer litigation. This was in spite of a recommendation for the shares from blue-blooded broker Cazenove. The recent tumble in the price of EMI, up 9 1/4p at 250p presents a good buying opportunity says broker Investec Securities.

The Daily Mail's Brett Arends on yesterday's trade
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