Gilts
Gilts staged a muted rally as investors sold out of the stock market, hit by disappointing earnings figures from blue chips. The March long gilt future was 18 ticks higher at 110.83, broadly in line with bunds. Yields on ten-year benchmark gilts were four basis points lower at 4.48 per cent. The rally was modest because there are doubts about further cuts.
Rumour of the day
Volga Gas rose 16½p to 370p after a drilling update indicated that a 2.3kilometre hole in the Volga region of Russia that had previously gone 47 metres into a gas reservoir has now been drilled down 100 metres without hitting bottom. Look out for a 50 per cent reserve upgrade. KBC Peel Hunt, the house broker, raised its target to 433p.
Deal of the day
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Whitbread lost 17p to £12.77. However, it emerged after the market closed that Simon Melliss, a nonexecutive director, bought 1,500 shares at £12.68 each ahead of a trading update on February 28. Presumably, this will be in line with expectations or Mr Melliss would not have been allowed to trade in the restaurant and hotel group.
Bet of the day
Has the reaction to GlaxoSmithKline’s warning on 2008 earnings and its slightly lower than expected 2007 profits been overdone? Its shares lost 89p to £10.78. BetsForTraders.com is offering odds of 3-1 for GSK’s shares to stage a recovery and be trading back above £11.85 in five market days.
Tiddler to watch
RBC Capital Markets has begun coverage of Hardy Oil & Gas, the Indian explorer, steady at 540p, with a 750p price target. There is talk of an imminent positive drilling update. RBC believes that there could be news of successful drilling at its D3 block off the east coast of India. It will transfer from AIM to the main list in a few days.