PartyGaming stood out in a mixed session's trading on the London Stock Exchange amid optimism American lawmakers will fold on their plans to ban online gambling.
Vodafone was another positive feature after it hinted at a move away from wireless, while Alliance & Leicester and Scottish & Newcastle retreated as M&A talk unwound. The FTSE 100 index closed up just 1.6 to 6045.7, having reached a new five-year high of 6073.3 in the first hour of trading.
European stock indices were similarly unmoved as both the European Central Bank and Bank of England opted to leave borrowing costs unchanged, surprising nobody.
Jean-Claude Trichet, the President of the ECB, said the bank no longer shares the market’s expectation of a rate hike in May. However, that looked most like a riposte to news agencies that had cited "anonymous ECB sources" claiming the contrary.
For more on the BoE's decision, click here.
Trading was a similarly tepid across the Atlantic, where the Dow Jones Industrial Average drifted 30 to 11210 ahead of tomorrow's key monthly payroll data. Some dealers put the decline down to disappointing March sales numbers from the likes of Gap and JC Penney.
For an overview of world markets, click here.
PartyGaming led the FTSE 100 risers after a US bill aimed at restricting internet gambling failed to pass through the House of Representatives at an initial reading.
Republican Congressman Robert Goodlatte put his Internet Gambling Prohibition Act, which targeted use of credit cards for internet gambling, to the House's Judicial subcomittee last night. No vote was taken to pass the legislation out of committee and no second hearing was scheduled, effectively blocking the bill from progressing any further.
Committee members argued that the legislation could prove unworkable because of the difficulty of prosecuting offshore operators, particularly if foreign governments did not cooperate. Opponents also claimed that the bill would add a regulatory burden to the banking industry.
The Internet Gambling Prohibition Act is one of three proposed gambling bills currently in the US legislature.
"Two further bills represent further risk but we continue to believe there will be no regulatory change in 2006 either permissive or restrictive," wrote Tim Ramskill, a Dresdner Kleinwort analyst. He repeated "buy" ratings on PartyGaming and SportingBet.
PartyGaming, which operates the world's No 1 online poker site from a Gibraltar base, surged 13p to 142.5p. 888 Holdings, the world's biggest casino operator, rose 19p to 240p and Neteller, which runs a Paypal-like system for betting companies, added 59p to 800p.
Track PartyGaming shares here.
Elsewhere on the leaderboard, steelmaker Corus was ahead 2.25p to 89.25p after Deutsche Bank lifted its rating to "buy" from "hold" on a target of 100p.
"Corus's near-term results are expected to be weak, but the group retains high operational gearing to the ongoing strength in the steel cycle," wrote Deutsche's Johan Rode, who took over from Pascal Spano as lead analyst on the stock. "Strong future cash generation should add to a structurally improved balance sheet and improve the group's flexibility to participate in steel industry corporate activity. The group’s margins and returns should improve as its transformation gathers pace and reduce the value gap to its peers."
Track Corus shares here.
Commodity stocks extended their recent rally as prices of copper and zinc pushed further into record-high territory, driven up by new fund inflows. Kazakhyms gained 2.25p to £12.69 and Xstrata added 40p to £20.28, while platinum processor Johnson Matthey rose 70p to 15.10.
Selected energy stocks were also higher, with BG up 5.5p to 736.5p and Shell adding 6p to £19.18. That came as New York's benchmark crude futures contract traded at a nine-week high of $68 a barrel on worries about dwindling US stockpiles, and as OPEC said it could not do anything to moderate prices.
Track today's trading by industry sector here.
Vodafone inched up 0.75p to 124.25p on news it will split into three new business units -- Europe; New Business and Innovation; and Central Europe, Middle East, Asia Pacific and Affiliates. A more detailed strategy update will come at the end of May.
While Vodafone said the rejig was to cut costs, the company provided no new financial targets and did not reveal where the savings would come from. Investors were more excited by creation of the Innovation unit, which indicated to some that the company is throwing a lot of weight behind moving itself away from pure-play wireless services.
Today's statement "suggests that Vodafone realises the key issues it faces and that the board is acting proactively to address them, perhaps taking a more pragmatic and technology-agnostic attitude to way forward," JP Morgan told clients.
Vodafone said today that any developments would be "infastructure light" and about internet convergence rather than bundling together fixed-line and mobile products. That decision was contradicted slightly by the group's apparent decision to keep control of Arcor, Germany's largest private fixed network operator. To JP Morgan's team, that suggested Vodafone will at least consider owning its own wired networks.
Vodafone has recently been rumoured as a potential bidder for Cable & Wireless's UK fixed-line business -- a move that would make a fraction more sense if JP Morgan's reading of today's news turns out to be accurate. Bidding for Italy's Fastweb and Iliad in France would also offer the company similar infrastructure to Arcor in Germany, the US broker noted.
Cable & Wireless finished lower by 0.5p to 106.75p.
For detailed information on Vodafone, click here.
Among the financial issues, Prudential bounced 26p to 677.5p as news of a Chinese joint venture helped distract attention from Aviva's decision last week not to pursue a bid for its insurance peer. There was also a vague flier of a story going round that France's AXA or AIG, Manchester United's new shirt sponsor, could make an approach on the Pru.
Meanwhile, Barclays added 8p to 686p as the old story about Citigroup interest was give another airing.
Read about AIG's Man United tie-up here.
Alliance & Leicester was the biggest blue-chip faller, down 34p to £11.60 having yesterday lost rights to its latest dividend payment. Shares in the mortgage bank had rallied from £10.55 over the past month on talk that it had rejected a takeover proposal from France's Credit Agricole, and was mulling a deal with Spain's BSCH.
A&L has kept mum on both stories, suggesting that the talks, if they ever happened, are probably not happening any more. Some dealers also argued that there was a hangover from yesterday's Office of Fair Trading ruling on credit card fees.
Takeover speculation also cooled for the two S&Ns, with Scottish & Newcastle falling 2p to 542p and Smith & Nephew unchanged at 536p. The former was yesterday rumoured to be considering a merger with Carlsberg, its brewing partner in Russia, while the latter has been suggested as a predator for US orthopaedics peer Biomet.
For analysis of recent takeover rumours, click here.
Pearson, publisher of the Financial Times, slipped 15.5p to 771.5p as Deutsche Bank sold a line of 6 million shares at 781p on behalf of a client. And Premier Foods, the maker of Branston Pickle, slid 5.75p to 294.25p as Citigroup moved 5 million shares at 294p. That latter stake, equivalent to about 2 per cent of Premier, was said to have come from a UK asset manager.
Track Pearson shares here.
Among the mid-caps, iSoft dived as much as 69p to 78p after an apparently well-sourced rumour went round the City that the software maker was about to be cut out of a £2 billion NHS deal by main contractor Accenture, which may in turn sue the UK firm for lost revenue.
ISoft rushed out a statement which repeated full-year guidance and said it believes the rumour is unfounded. That sent shares rallying back to 136p -- before traders took fright at the word "believes" and put them back to 113p.
Dealers were particularly nervous about this story because any further problems to the NHS deal could cause iSoft to restate sales it has already put through the books, potentially triggering a breach of the group's debt covenants. Accenture warned on profits last week because of delays in installing NHS hardware, a problem it blamed exclusively on iSoft delivery.
For detailed information on iSoft shares, click here.
Michael Page International rose 23.5p to 379.5p after the recruitment firm said first-quarter net fees grew 31.9 per cent to £79.1 million, beating consensus expectations that had centred at about £74 million. There was no comment on profitability.
"Although distorted by the timing of Easter this year, trading momentum does appear to have been stronger than anticipated across the board," said Merrill Lynch. "At this stage of the year, we are comfortable with our top of the range forecasts (of £88 million profit before tax this year) but suspect that brokers with more cautious projections may upgrade."
Track Michael Page shares here.
Halfords dropped 18.75p to 315.75p after cautioning that the growing popularity of technology such as satellite navigation had changed its sales mix and reduced overall profit margins.
Despite sales rising a better-than-expected 8.4 per cent, Halfords said it expects only to match forecasts with a profit before tax for the year through March of around £77 million.
Read Halfords' statement here.
Fellow retailer Mothercare rose 19.25p to 360p after it said annual profits and gross profit margin would be in line with market forecasts. Richard Ratner, Seymour Pierce's retail guru, moved the stock to "outperform" from "hold" in reaction.
In a trading statement, Mothercare said like-for-like sales in the UK, stripping out the impact of newly opened space, edged 0.2 per cent higher in the 12 weeks ended April. Adjusted for Easter, that figure rose 1.2 per cent compared with the same period last year.
For detailed information on Mothercare, click here.
Track Innovation shares here.
House of Fraser jumped 10.75p to 135.25p on talk that Merrill Lynch was instructed by a client to buy around 6 per cent of the department store operator in a dawn raid before the market opened. A single buyer would become House of Fraser's biggest shareholder.
Dealers reported talk that the purchaser was venture capital firm Apax, which was rumoured to have pulled out of takeover talks with House of Fraser just three weeks ago. As it made no former offer, it would not be barred from returning.
On broker watch:
Morgan Stanley cut Whitbead to "underweight" from "equal-weight".
Teather & Greenwood cut Northern Rock and Monstermob to "hold" from "buy".
Dresdner Kleinwort moved Keir Group to "add" from "buy".
And UBS started coverage of Paypoint with a "neutral" rating.
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