ITV held steady in a falling market on Wednesday amid talk that advertising sales had been better than feared.
The broadcaster had been outperforming a tough UK market, with ad sales for September up 5 per cent, according to media buyers cited by RBS. Airtime demand for October to December also appeared to be healthier than expected, the broker said.
“ITV is being boosted by The X-factor, with the current series matching previous peak audiences set last year,” said RBS. “X-Factor is attracting advertising at premium prices.”
An upbeat presentation from ITV management to Liberum Securities also helped the stock. Ian Griffiths, finance director, said that while short-term visibility was limited, the group was in a strong position to take market share both from terrestrial rivals and from newspapers.
Shares in ITV ended 0.2 per cent weaker at 59¼p, outperforming a wider market that suffered another bout of risk aversion. The FTSE 100 ended lower by 75.30 points or 1.4 per cent at 5288.41.
Rising metals prices failed to support the mining sector as investors focused instead on recession risk. Antofagasta slid 6.9 per cent to £11.14 and BHP Billiton was 3.9 per cent weaker at £18.89.
Rio Tinto drifted 4.2 per cent to £33.89 even after a broadly positive response to its annual investor seminar on Tuesday. “Rio Tinto, like other companies, remains bullish on end user demand and sees no material signs of slowing,” said UBS.
Iron ore group Ferrexpo lost 1.8 per cent to 356½p amid fears that Ukraine was increasing pressure on Konstantin Zhevago, its majority shareholder.
“Ferrexpo is unlikely to face overt intimidation,” commented Concorde Capital.
The company’s UK listing and international shareholder base lent “greater legal protection and likelihood [shareholders] will vigorously defend and lobby for their rights,” it said.
Banks led the FTSE 100 risers after the Bank of England laid the groundwork for a possible second round of quantitative easing. Lloyds Banking Group was up 5.6 per cent to 36¼p and Royal Bank of Scotland added 1.3 per cent to 23¼p.
Soap maker Reckitt Benckiser was down 0.7 per cent to £33.01. Redburn Partners, repeating “sell” advice, said Reckitt had damaged sales growth by under-investing in marketing and product development.
Inmarsat, a recent subject of takeover hopes, fell 2.6 per cent to 490¼p on downgrades from Morgan Stanley and Citigroup. Both brokers cited a stretched valuation and uncertainty over the future of LightSquared, the satellite operator’s key US customer.
Further tests required into interference between LightSquared and navigation satellites would likely push a final decision on the future of the broadband network into 2012, Morgan Stanley said.
It also questioned the maths underpinning a leveraged buy-out of Inmarsat at current levels, particularly given the cost of satellite upgrades over the next two years.
Competition fears pushed Ocado to a record low following reports that Tesco was preparing to cut prices. Ocado matches Tesco’s standard price on 7,400 products so would be hurt disproportionately by the move, said Panmure Gordon analyst Philip Dorgan.
“We now expect Ocado to lose money for at least the next two years,” he said. Ocado lost 11.4 per cent to 102½p, having earlier hit a 99½p intraday low.
Tesco was 1.9 per cent lower at 364p and J Sainsbury slid 2.3 per cent to 274½p. “With the weakest cash flow in the sector and the lowest margin, matching Tesco’s investment would see Sainsbury’s profits and cash flow heavily impacted,” said Evolution Securities.
Vague bid speculation helped Morgan Crucible rise 3.1 per cent to 256¼p, while fellow ceramics maker Cookson gained 4.7 per cent to 465¼p.
Cookson’s valuation “discounts the impact of a secondary recession,” said Panmure Gordon, which had a 680p target price on the stock.
Among small caps, DTZ rebounded by 13.2 per cent to 29½p. The property services group played down concerns about its debt position and said takeover talks with its main shareholder, SGP, were still on.