BAE Systems buoy up FTSE

Defence giant BAE Systems fired the London market back above the 5700 threshold today as analysts warmed further to a major deal with Saudi Arabia.

BAE Systems advanced 4% or 14.25p to 407.75p as brokers raised their target prices for the stock following the recent contract deal to provide its Eurofighter Typhoon jets to the desert kingdom.

And with talk of consolidation in the communication and online gaming sectors buoying stocks, the FTSE 100 Index rose 13.3 points to 5704.5 by mid-morning.

Poker giant PartyGaming rose 1.5p to 139.5p – close to levels not seen for four months – in the belief that there are strong opportunities for growth, possibly through acquisitions.

Analysts at broker Dresdner Kleinwort Wasserstein, who have a 165p target price for PartyGaming, said: “We disagree with the bearish notion of poker’s ‘faddish’ nature.”

Rumours were also flying around that ITV was a bid target, possibly from telecoms giant BT, which contributed to shares in the broadcaster rising 2p to 116.5p.

However, mining stocks were restraining the top flight where Kazakhmys dipped 15p to 775p and Xstrata retreated 14p to 1442p.

Most of the interest was outside the index of leading shares where JJB Sports lost 3% of its value – down 4.5p to 165.5p – after warning that annual profits would fail to meet market hopes as tough competition in clothing and footwear led to heavy discounting.

Games Workshop was hit even harder – down 14% or 50.5p to 324.55p – after pre-tax profits tumbled from £7.6m (€11m) to £119,000 (€173,000) in the six months to November 27 as sales of Lord of the Rings games waned.

A further profits warning came from Royal Mail rival DX Services – down 39.75p to 305.25p – but housebuilder George Wimpey moved up a penny to 470 even though it said profits would be at the lower end of expectations during a difficult year.