Carnival stood out in a choppy London market on Friday amid optimism ahead of the cruise operator’s results next week.
The shares rose to a three-year high, up 2 per cent to £26.50, on expectations management will point to strong demand and positive pricing in Tuesday’s update.
“While the lodging industry continues to languish awaiting a return of the business traveller, the leisure customer has already rebounded,” said Bernstein Research, which forecast earnings would beat consensus expectations.
There could also be an upgrade to full-year earnings guidance, which currently stands at $2 to $2.20 per share, according to analysts at Merrill Lynch and BarCap.
The wider market started strongly but ran out of steam after a mid-morning expiry of options and futures. The FTSE 100 held on to a 21-month high, up 0.1 per cent, or 7.51 points, to 5,650.13. That gave the index a 0.4 per cent gain for the week.
Financial stocks set the pace on Friday after Lloyds Banking Group said it should turn a profit in 2010.
Lloyds surged 8.2 per cent to 60p and Barclays gained 1.3 per cent to 357½p. Royal Bank of Scotland, which was hosting a seminar on its corporate arm, added 4.7 per cent to 44p.
Old Mutual gained 1.2 per cent to 126½p, helped by Goldman Sachs raising its target price to 145p.
On its final day before relegation from the Footsie, and ahead of results on Wednesday, Resolution gained 1 per cent to 74p.
Deutsche Bank argued that Resolution’s numbers should cast “a spotlight on an unreasonably cheap valuation,” with the broker putting a 100p standalone valuation on the stock or 90p if management can find something to buy.
Man Group, which has a trading update on Wednesday, rallied 1.3 per cent to 244p following several broker downgrades earlier in the week. JPMorgan argued that, with forecasts already cut, the chances of a negative surprise in the update were lessened.
JPMorgan also dismissed concerns Man will cut its dividend, which currently promises a yield of about 12 per cent. While cutting the pay-out would make little difference to the company, it would send a downbeat message on earnings growth that management normally avoid, it argued.
Airline engineers gained after Boeing said it would increase production to meet recovering demand. Smiths Group rose 2.3 per cent to £11.00 ahead of results next week, while Rolls-Royce rose 2.2 per cent to 601p.
BAE Systems jumped 2.4 per cent to 385½p, a move dealers said likely reflected a squeeze related to the day’s options expiry.
Miners and oil companies led the fallers following an unexpected interest rate hike in India.
Vedanta Resources, India’s largest copper miner, was down 3.1 per cent to £26.22, while Rajasthan-focused Cairn Energy lost 2.6 per cent to 384p.
Xstrata was 2.3 per cent weaker at £11.43 after chief executive Mick Davis sold £5.4m shares to pay a tax bill.
BHP Billiton drifted 1 per cent to £21.85 amid a second day of speculation about potential oil acquisitions. BG Group, up 1 per cent to £12.02½, was once again connected to the rumour, along with smaller targets such as Australia’s Woodside Petroleum.
Among the mid-caps, Game Group rose 3.5 per cent to 100p as Collins Stewart issued “buy” advice based on results from US peer Gamestop. Game shares have jumped 25 per cent in two weeks, helped by bid speculation.
Mitchells & Butlers, due to announce a strategy review on Wednesday, was 1.3 per cent higher at 291p. Deutsche Bank expected an accelerated disposal programme, opening up the possibility of a special dividend, and saw potential for debt to be paid off via a sale and lease-back of unsecuritised pubs.
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