MORNING MARKET VIEW

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MARKET COMMENT for THURSDAY 31TH JANUARY 2008

HEADLINES

Good Morning ShareCrazies

The market reacted pretty much the same way as its US counterpart. The FTSE-100 opened up 16.8-points, but then slipped back and indeed has been off over 107-points.

Financial stocks have been weak, and as banks in Hong Kong cut rates overnight (just the banks not the Chinese government) we have seen HSBC (HSBA) easier, currently down 130.5p at 741.5p (in Hong Kong they closed at the equivalent of 744p) and Standard Chartered (STAN) are off 50p at 1602p. The bank has also announced that it is to bail out its Whistlejacket structured investment vehicle.

Banking shares have been further impacted by review from Panmure (see below) in which they reiterated sell Barclays (BARC), RBC, HSBC (HSBA), Bradford & Bingley (BB.), and Northern Rock (NRK). Also by a note yesterday from Citigroup, which cut banks target prices.  

At 11:07 the FTSE-100 was down 74.2-points at 5763.1

BROKER RECOMMENDATIONS

Altium reiterates buy Carluccio’s (CARL) (230p price target) and says BUY 600 Group (SIXH) (63p target price) and Biffa (BIFF) (350p target price) The broker has Wilmington (WIL) and Huntsworth (HNT) as its Key Picks  in the Media Sector and is also ‘drawn’ to Shed Media (SHDP).

Cazenove reiterates outperform on Mouchel (MCHL)

Charles Stanley has upgraded Carluccio’s(CARL) to buy from add (170p target price) and says add GCap Media (GCAP) (210p target) The broker reiterates buy Cains Beer (CBC) (14p target price)

Citigroup has downgraded Robert Wiseman (RWD) to sell from hold (cutting the price target to 455p from 485p) and says buy GlaxoSmithKline (GSK) (cutting the price target to 1400p from 1470p), Johnson Matthey (JMAT) (1900p price target) and Chloride (CHLD) (230p price target)

Credit Suisse reiterates neutral on Shire (SHP) (cutting the price target to 930p from 1130p). The broker reiterates its overweight view on the Steel Sector

JM Finn Capital Markets reiterates hold Friends Provident (FP.)

Goldman reiterates buy KCom (KCOM) (cutting the price target to 63p from 66p)

Investec reiterates buy Tinopolis (TIN) (55p price target, raising estimates)

WH Ireland reiterates outperform on Mouchel (MCHL)

Lehman has issued a note on the UK Food Retailers in which they reiterate overweight on Tesco (525p price target) and has overweight on William Morrison (WMR) (360p price target)

JP Morgan has issued a note on the UK Food Retailers in which they have downgraded Sainsbury (SBRY) to underweight from neutral (cutting the price target to 370p from 440p), reiterated overweight on William Morrison (WMR) (raising the price target to 340p from 330p), with underweight on Tesco (TSCO) (cutting the price target to 420p from 440p) The broker reiterates neutral on Smith & Nephew (SN.) (raising the price target to 680p from 655p) and has underweight on Mitchells & Butlers (MAB) (cutting the price target to 400p from 460p) JP Morgan has neutral on Autonomy (AU.) and overweight on Thomas Cook (TSG)

Morgan Stanley has equal-weight on Rolls-Royce (RR.) (cutting the price target to 530p from 550p)

Panmure has downgraded Friends Provident (FP.) to sell from hold (cutting to price target to 135p from 160p) and reiterates buy Coda (CODA) (223p target price) The broker says hold Cookson (CKSN) (cutting the price target to 600p from 750p), LogicaCMG (LOG) (cutting the price target to 112p from 114p), Raymarine (RAY) (cutting the price target to 235p from 285p) and Mitchells & Butlers (MAB) (its target is under review) Panmure says buy Faroe Petroleum (FPM) (easing the price target to 260p from 261p), ITM Power (ITM) (cutting the price target to 160p from 340p), Mouchel (MCHL) (500p target) and Ryanair (RYA) (€5 price target) The broker has reviewed the UK Newspapers and leaves Daily Mail & General (DMGO) as its Sector Pick, it reiterates hold Johnston Press (JPR) and says hold Trinity Mirror (TNI). Panmure has reviewed the UK Banks and reiterates sell Barclays (BARC), RBC, HSBC (HSBA), Bradford & Bingley (BB.), and Northern Rock (NRK)

Sandford Bernstein has issued a review of Global Integrated Oils in which the broker has outperform on BP (BP.)

Seymour Pierce reiterates outperform Coda (CODA) (205p target) and says hold Land of Leather (LAN) and WH Smith (SMWH) and has outperform Mouchel (MCHL)(480p price target)

UBS has neutral on Standard Life (STAN) (cutting the price target to 245p from 290p) and says buy Pearson (PSON) (1050p price target) and Kesa Electricals (KESA) (280p price target)

NEWS ROUND-UP

Last Night in New York shares fell towards the close of business, after earlier rallying in reaction to the Federal Reserve's much-anticipated half-point rate cut. However, the market was dented on speculation that bond insurers Ambac Financial and MBIA faced downgrades. The Dow Jones closed down 37.47-points to 12442.83, the Nasdaq slipped 9.06-points to 2349.00, while the S&P lost 6.49-points to close at 1355.81

On this day in:-
2006 The hundredth Great British soldier is killed in Iraq since the invasion in 2003.
2005 Robert McCartney died from stab wounds in Belfast. McCartney’s family, who blamed the IRA for the killing, subsequently launced a high profile campaign to obtain justice for Robert.
2004 British Airways and Air France cancellled 5 flights to Washington DC and Miami in America, due to fears of terrorist attacks.
2001 In the Netherlands, a court convicted one Libyan and acquitted another for their part in the bombing of Pan Am Flight 103, which crashed in Lockerbie, Scotland in 1988.
2000 GP Harold Shipman was jailed for life after murdering fifteen of his patients.
1996 91 people were killed and 1,400 injured when Tamil Tiger guerrillas exploded a lorry bomb in the centre of the Sri Lankan capital, Colombo.
1990 The first McDonalds’s restaurant opened in Moscow, Russia.
1983 In Great Britain, it becomes compulsory to wear a seat belt in a car if you were driving or sitting in the front seat.
1968 The Vietnam War: Viet Cong soldiers seized control of the American embassy in Saigon for 6-hours before being defeated.
1961 Ham the chimpanzee successfully returned from a space flight. The US had sent him into space to test whether a human being could survive a space flight.
1953 A car ferry, The Princess Victoria, sank in the Irish Sea, drowning 130 people.
1950 President Truman announced America’s decision to develop the hydrogen bomb.
1945 World War II: Pvt. Eddie Slovik became the first American soldier since the Civil War to be executed for desertion.
1917 Germany announced the renewal of unlimited submarine warfare in the Atlantic. German torpedo-armed submarines prepared to attack any and all ships, including civilian passenger carriers, said to be sited in war-zone waters. Germany had suspended its unrestricted U-boat attacks in 1915 after the United States protested about the sinking of the Lusitania ocean liner and other unarmed vessels with Americans aboard. Three days after the renewal of unlimited submarine warfare in 1917, the United States broke diplomatic relations with Germany, and hours after that the American merchant liner Housatonic was sunk by a U-boat. None of the 25 Americans on board were killed - a Great British steamer later picked them up. Within 2-months, US President Woodrow Wilson and an outraged Congress declared war on Germany, giving the Allies a major boost in morale and reinforcements
1606 Guy Fawkes and his fellow conspirators in the 'Gunpowder Plot', to blow up the Houses of Parliament in London, were executed after being found guilty of treason

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