This Week's Market Mayhem

Rights, Scams and Politics

25 January 2008 | 0 Comments

Bedlam hit the financial markets this week, as recession fears, US interest rate cuts and fraud panic turned it into one of the most volatile weeks in years.

The FTSE 100 ended down slightly this week, falling 0.23% to 5888.40 by 10.00 am Friday. That figure suggests that this was a fairly innocuous week in the markets but, in reality, markets across the globe suffered one of their most turbulent weeks in years -- combining the biggest drop in the Footsie since September 11 on Monday with its biggest one day points gain ever on Thursday. So no. That is not a mistake in the title. Financial shocks and continued worries of a global recession contributed to the unprecedented volatility. French rogue trader Jerome Kerviel was blamed for sending tremors through the financial markets after losing France's second biggest bank a mighty £3.6 billion. This was counterbalanced by a later rally, helped by a dramatic 0.75% interest rate cut in the US, as well as plans to bail out US bond insurers. Biggest Movers in the FTSE 350 (as at Friday 10.00) RISERS 1 Northern Rock (LSE: NRK) +70.54% 2 Randgold Resolutions Ltd (LSE: RRS) +20.35% 3 St James's Place (LSE: STJ) +20.00% 4 Barratt Developments (LSE: BDEV) +17.67% 5 Restaurant Group (LSE: RTN) +17.23% FALLERS 1 Severfield-Rowen (LSE: SFR) -33.54% 2 International Ferro Metals (LSE: IFL) -14.42% 3 Southern Cross (LSE: SCHE) -13.73% 4 Close Bros Group (LSE: CBG) -13.35% 5 WSP Group (LSE: WSH) -12.01% Inter dealer broker ICAP (LSE: IAP) was one company that profited from the market volatility, up 8.35% as it announced on Thursday that profits were set to exceed expectations. Brewer Scottish and Newcastle (LSE: SCTN) finally accepted a bid from Carlsberg and Heineken this morning. The stock rose a modest 2.1%, as pessimism earlier in the week about whether the deal would go through had dampened traders' spirits. The banks bounced back this week, with the big four all depositing gains. Barclays (LSE: BARC) was the biggest riser, up by 9.7%. HBOS (LSE: HBOS) was up 8.7% despite falling to a five-year low earlier in the week amid rights issue rumours. Lloyds TSB (LSE: LLOY) and RBS (LSE: RBS) were both up nearly 8%, while HSBC (LSE: HSBA) gained just under 2%. Alliance and Leicester (LSE: AL.) rose by 6% amid fresh reports that GE Money is mulling over a possible offer for the bank. After rolling downhill last week, Northern Rock (LSE: NRK) stood firm, jumping a massive 70% as confusion continues to circle round the future of the troubled bank. Wealth manager St. James's Place (LSE: STJ) gained 20%, after defying expectations and reporting 27% growth in Q4 last year. Property groups and housebuilders were helped by hopes that the Bank of England would follow its US equivalents and reduce interest rates next month. Persimmon (LSE: PSN) rose 11%, Taylor Wimpey (LSE: TW.) was up 9.6% and British Land (LSE: BLND) and Hammerson (LSE: HMSO) were both up 7%. On the other hand, Severfield-Rowen (LSE: SFR), the steel manufacturer, plunged 34% after announcing 2008 profits would be hit by a slowdown in London commercial property projects. Notable announcements next week: Monday: All Leisure, eXpansys Tuesday: Autonomy Corporation, Blackrock International, eaga Wednesday: Thomas Cook, Standard Life Thursday: Avanti Communications, ITM Power Trading announcements are expected from Mcinerney Holdings, Greene King, Britvic, James Halstead, Infonic, WH Smith and Hornby.

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