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FTSE100 ekes out a recovery as Portugal worries fade

Published: 22:27 11 Jul 2014 AEST

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London markets regained their footing after stumbling over Portugal’s banking inspired wobble yesterday.

Statements that the problems are down to the owners of troubled Banco Espirito Santo and not the banks provided enough reassurance to lift FTSE 100 by 8 points (0.1%) at 6,680.

Attention was also drawn away from Portuguese banks to raincoats as in a rare show of defiance Burberry’s (LON:BRBY) shareholders rejected the pay package of new chief executive Christopher Bailey.

More than 50% of shareholders failed to support Bailey’s salary and share-based incentives that add up potentially to more than £10mln a year.

Remuneration votes though are not binding and the company has previously described the package as on par with other senior executive in the luxury sector, so there is seemingly little chance of the a revision. Shares were unchanged at 1,464p.

Imperial Tobacco (LON:IMT) was the best of the Footsie risers as it confirmed press speculation that discussions have started with sector peers Reynolds and Lorillard over a possible acquisition of certain assets and brands owned by Reynolds and Lorillard, which are in merger talks.

"The USA remains one of the world's largest and most profitable cigarette markets. Imperial would proceed with an acquisition only if its terms met strict transaction  criteria," the statement from IMPs said.

The shares are up 3.4%, dragging BATS (LON:BATS) up 1.3% with them.

Airlines were back in favour this morning after recent weakness in the wake of Air France-KLM's profit warning while house builders remain en vogue following the spate of upbeat trading statements recently.

US broker Jefferies reiterated buy ratings on Ryanair (LON:RYA), Easyjet (LON:EZJ) and British Airways owner IAG (LON:IAG), though it clipped its price targets a little.

 Barratt (LON:BDEV) rose 1p to 368p after it said yesterday profits would mre than double this year.

In contrast, precious metals miners Randgold (LON:RRS) and Fresnillo (LON:FRES) surrendered yesterday's gains, as investors regained their appetite for risk.

In the small caps space, the UK onshore oil and gas sector is where the buzz is.

Alba Mineral Resources (LON:ALBA) soared 163% after signing a binding Heads of Agreement with Horse Hill Developments (HHDL) to invest in a UK onshore oil and gas project.

The Horse Hill-1 well, which is scheduled to be completed by the end of August 2014, is close to Gatwick Airport in an area that has already seen one field brought on stream.

Meanwhile, Regency Mines (LON:RGM), which has a 14.9% stake in Alba, has also agreed to acquire a 5% stake in HHDL, sparking a 11% leap in its share price.

Elsewhere in the resources sector, Faroe Petroleum (LON:FPM) is wanted after successfully completing a successful side-track well and announcing an oil discovery on the Bue prospect in the Norwegian Sea.

Faroe has a 25% stake in the prospect and is up 1.9% in early deals.

Leni Gas & Oil (LON:LGO) eased it lower after its recent gains as it revealed it has spudded its fourth new well in the Goudron field, in Trinidad.

Roxi Petreoleum (LON:RXP) is another oiler on the up, rising 0.5% to 7.8p after news of a licence extension and of operational progress at its Galaz asset .

PuriCore (LON:PURI) is one of the biggest fallers, 11% lower, losing a fifth of its value after a profit warning as it reshapes its business following the sale of its endoscopy business.

Ceres Power (LON:CWR) dips 0.33p to 9.30p after announcing plans to raise around £20mln through a placing of shares at 8.5p.

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