G4S shares steady thanks to bargain hunters

Bargain hunters helped shares in under-fire Olympic security firm G4S steady today as the wider market lifted thanks to gains on Wall Street.

The FTSE 100 Index rallied 44.5 points to 5673.6 in response to an early session rise on America’s Dow Jones Industrial Average.

US data on housing starts showed home construction increasing by a better-than-expected 6.9% between May and June to an annual rate of 760,000 - the highest level in nearly four years.

This helped offset yesterday’s disappointment over US Federal Reserve chairman Ben Bernanke’s failure to signal more stimulus measures for the world’s biggest economy.

In London, blue-chip stock G4S pulled out of the nosedive caused by the group’s Games staffing crisis, which led to a £700m (€891m) slump in value.

The company, whose boss Nick Buckles told MPs yesterday that its staffing debacle had been a “humiliating shambles”, was 2% or 5.8p higher at 245.8p having fallen sharply over the previous four sessions.

The recovery was helped by comments from major shareholder Invesco Perpetual that Mr Buckles’ job should not be in jeopardy.

More Than firm RSA Insurance recovered early session falls seen after it revealed a £50m (€63m) hit from more than 6,500 UK weather-related claims since June.

It also revealed a £35m (€44m) impact from two earthquakes in Italy in May and said its combined operating ratio, which shows claims and expenses as a percentage of premium income, had been affected.

Shares were later 0.5p higher at 108.8p.

Outside the top flight, Homeserve rose by 15% at one stage amid newspaper speculation that the home repair and insurance business is in the sights of potential private equity suitors.

Homeserve denied it is in offer talks but shares were still 21.3p higher at 188.3p on hopes that a £1 billion deal could be in the pipeline.

The company was valued at £1.8bn (€2.29bn) in August last year but an ongoing FSA investigation into mis-selling reduced this to £550m (€700m) by Tuesday night’s close.

Equipment rental firm Speedy Hire rose 3% or 0.6p to 23.9p after it secured a £40m (€50.9m) contract to work on a major oil drilling project in the Middle East.

The Merseyside-based firm will provide tools, scaffolding and other equipment for the £12.2bn (€15.5bn) scheme at the second biggest field in the Persian Gulf.

But there was grim news for shareholders of climate change consultancy AEA Technology after the debt-laden company warned its shares were worthless.

The former part of the old Atomic Energy Authority is looking at all options but warned investors could be left with nothing even if it seals a rescue takeover. Shares dived 79.5% to just 0.05p.