Premier Foods rallies; London market drops
Wolseley climbs after bullish broker note, oil stocks under pressure
By Simon Kennedy, MarketWatch
LONDON (MarketWatch) — Premier Foods was one of the few bright spots in a broadly lower U.K. market Monday after the company said it had received approaches for its vegetarian food business.
The announcement sent shares of mid-cap Premier Foods /quotes/comstock/23s!e:pfd (UK:PFD 18.10, +1.89, +11.66%) soaring nearly 12% on the London Stock Exchange.
The FTSE 100 index /quotes/comstock/23i!i:ukx (UK:UKX 5,556, -36.78, -0.66%) was down 0.5% at 5,566.02 as the oil majors and mining stocks moved lower.
In a brief statement, Premier Foods said it “remains open-minded about disposals” and that its has received an unspecified number of approaches for its meat-free business, which includes the Quorn brand of vegetarian foods and meals.
Plumbing and heating products supplier Wolseley PLC /quotes/comstock/23s!e:wos (UK:WOS 1,624, +42.00, +2.66%) was another gainer, rising 2.2% after analysts at Credit Suisse started coverage of the group with an outperform rating.
The broker said margins should recover over the next couple of years and added that the group’s minimal exposure to government-funded projects should help reduce the impact of public spending cutbacks.
Oil and gas stocks were lower across the board, with Royal Dutch Shell /quotes/comstock/23s!e:rdsa (UK:RDSA 1,922, -22.50, -1.16%) /quotes/comstock/13*!rds.a/quotes/nls/rds.a (RDS.A 61.78, +1.48, +2.45%) down 0.9% and BP PLC /quotes/comstock/23s!a:bp. (UK:BP. 431.00, -9.50, -2.16%) /quotes/comstock/13*!bp/quotes/nls/bp (BP 41.95, +0.78, +1.89%) dropping 1.6%.
The fall for BP came after its shares rebounded around 9% over the course of the previous week.
Mining stocks also dropped. Xstrata /quotes/comstock/23s!a:xta (UK:XTA 1,217, -25.00, -2.01%) was down 1.3% and Kazakhmys /quotes/comstock/23s!e:kaz (UK:KAZ 1,437, -24.00, -1.64%) slipped 0.9%.
Satellite telecommunications group Inmarsat PLC /quotes/comstock/23s!e:isat (UK:ISAT 642.50, -26.00, -3.89%) was the biggest faller on the benchmark index.
The stock dropped 2.8% after a report in the Sunday Times (of London) newspaper that the group’s biggest shareholder, Harbinger Capital, wants to cut its stake to around 20% from 30% to raise cash for other investments.
Simon Kennedy is the City correspondent for MarketWatch in London.
