Market report: Monday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

MOVE out of banks and into oils. That was the advice offered by Lehman Brothers to clients today because, it says, the oil sector is undervalued and the banks have enjoyed a good run of late.

Lehman has told its institutional clients to reduce their weight in banks from 11% to 8%, while raising their exposure to the oil sector from 17% to 20% of their portfolio.

BP rose 6 3/4p to 422 3/4p ahead of interim results on Tuesday. US investment magazine Barron's, part of the Dow Jones empire, has also provided a boost to BP. It says the shares are the same price as six years ago and issued a 'strong buy' recommendation. Shell, which reported a good set of half-year results last week, rose 1 1/4p to 392 1/4p.

Banks were marked higher ahead of a busy week for trading statements. Lloyds TSB advanced 12p to 471p amid mounting speculation that it will not cut the dividend when it reports on Friday. The group is currently touting around its New Zealand operations for a likely buyer.

Abbey National, 3 3/4p ahead at 489 3/4p, is reporting on Wednesday with investors hoping for signs that the business is over the worst after making losses of almost £1bn last year.

Alliance & Leicester fell 4p to 862p. Morgan Stanley has raised its stance from 'equal weight' to 'overweight' following last week's better-than-expected profit numbers. It has also raised its 12-month target price from 792p to 930p. UBS has repeated its 'buy' recommendation and lifted its target by 50p to 990p.

Share prices surrendered much of their earlier gains at the profit-takers moved in on Wall Street. The FTSE 100 rose 17.6 points to 4148.80.

British Airways was one of the biggest fallers among second-liners with a loss of 1 1/2p at 169p. Chief executive Rod Eddington is meeting union leaders today in an attempt to prevent further lightning strikes over the issue of swipe cards. Last week's industrial action at Heathrow is believed to have cost the group about £30m in lost revenue.

United Utilities plunged 44p to 532p after announcing plans to raise £1bn through a heavily-discounted five-for-nine rights issue at 330p. Rival water companies came under the hammer. Severn Trent fell 17 1/2p to 668p and Kelda 6p to 435p.

Buses and trains operator Arriva fell 6 1/2p to 396p. ABN Amro lowered its rating from 'buy' to 'add' after the shares reached the broker's 400p price target. Filtronic rose 17 1/2p to 134p after reporting losses of £3.8m against £25.5m last time. Broker Cazenove forecasts a return to the black this year, with profits of £3m.

• 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.

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