Gilts

Gilt future prices fell to their lowest since October as hopes of an interest rate cut this year continued to fade. The June long gilt future was down 24 ticks at 107.11, having earlier hit 106.48. Yields on ten-year benchmark gilts were flat at 4.81 per cent, having traded earlier as high as 4.94 per cent.

Rumour of the day

DermaSalve Sciences, a maker of skin cream and owner of a fish-oil distributor, rose 1¼p to 4.125p amid talk of stakebuilding by an overseas investor. It is understood that the company has quietly agreed to make monthly payments to Trafalgar Capital, a holder of convertible loan notes, in cash rather than new shares, so contributing to a stock shortage.

Deal of the day

Peet Nienaber, the chief executive of Xstrata’s ferroalloys arm, sold 17,000 shares at £41.01. The shares in the Swiss-based miner had been given to him as part of his bonus plan. The price of Xstrata has soared – along with the mining sector and the climbing price of metals – from only £18 two years ago and was up 7p to £42.90, close to a record.

Bet of the day

Fears over inflation in the US has resulted in the pound falling to three-month lows against the dollar but Mervyn King, Governor of the Bank of England, this week all but ruled out an interest rate cut until the end of the year and BetBrokersBinaries gives odds of 2-1 that the pound will bounce back above $1.9560 in three market days.

Tiddler to watch

Just Retirement, the company that sells annuities and equity release schemes, gained 4¼p to 122¼p after Barrie Cornes, of Panmure Gordon, raised his target price from 136p to 166p. Pensioners who have been delaying selling their pension pots in the grim equity market can not afford to wait much longer, he said.

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