Friday’s Master Investor Market Report

– The FTSE 100 fell 48.82 points to 6,759.00.
– The FTSE 250 sank 116.14 points to 17,828.74.
– The FTSE All Share decreased by 25.44 points to 3,686.19.
– The FTSE AIM All Share finished 3.74 points lower at 770.32.

Chinese shares dropped by over 7% today as sentiment was hit by fears that the high number of fresh listings is reducing available liquidity. However, the country also saw its biggest debut since 2010 with broker Guotai Junan Securities rising 44% during the day. Recent action to tackle margin trading has also cooled markets.

Tesco (TSCO) sales continued to decline in the three months to 30th May, with UK non-fuel income falling by 1% due to continued price drops and intense competition. However, this represents an improvement on the prior quarter and most international markets performed well. Deutsche Bank stuck to its “buy” rating and 240p target price, with the comment that “we find the first quarter sales performance re-assuringly steady, with no change in outlook compared to the full year results in April”. Shares in the company grew by 5.9p to 223.65p.

Credit Suisse upped its target price for BT (BT.A) to 510p from 495p and reiterated an “outperform” rating. The report noted that BT was attractively valued at present and that the proposed merger with EE was likely to go ahead without a forced spin-off of BT’s wholesale division. The broker said that the market was relatively competitive and that OFCOM would have to justify any decisions under EU competition law. BT shares climbed 2.95p to 464.15p.

Müller has made a fresh offer in its bid to take over Dairy Crest (DCG) after the Competition and Markets Authority said that any deal would be subject to a stage 2 investigation if its supply concerns were not assuaged. The German outfit said that a certain volume of fresh milk supply would be offered to a 3rd party processor to maintain competition. Markets were unconvinced and Dairy Crest shares fell 1.5p to 530.5p.

Paragon Diamonds (PRG) said that 2014 was a transformational period for the company and that it expected significant growth during the current year as its kimberlite mine in Lesotho begins production. However, the company’s loss before tax was £13.3 million, more than ten times that of the previous year, as the company stepped up development spending. Paragon shares dropped to 5.45p.

Shares in Trinity Mirror (TNI) dropped by 5.5% to 150.5p after the publisher announced that market conditions had remained tough during the first half of 2015 and that it expects revenues to remain volatile for the rest of the year. As a result, the company is doubling its structural cost reduction targets to £20 million and continuing efforts to improve its digital readership.

Monday’s news today

Money supply estimates for the UK will be released on Monday morning.

Quote of the day

“Failure is success if we learn from it.”
– Malcolm Forbes