Concerns about Spain and Greece hit markets again, but telecoms group benefits from broker upgrade

Leading shares are heading lower as the eurozone crisis intensifies, heading for its worst weekly fall since late November.

But BT has bucked the trend, adding 2.8p to 205.3p and topping the FTSE 100 risers, following an upgrade from analysts at Berenberg, who raised their rating from hold to buy and their price target from 220p to 245p. The bank said:

Having revisited our cost analysis for BT, we conclude that consensus estimates for March 2013 are too low and we believe that BT will beat expectations by more than 2%. Against a backdrop of most other incumbent operators facing increasing operational pressure and threats to forecasts, we believe this will continue to make BT a safe haven.

Mining groups Antofagasta, up 3p at £10.29, and Fresnillo, 9p better at £13.39 regained some ground, and Icap, the interdealer broker continued its recent rise, up another 1.4p to 343.4p.

But otherwise it was another bleak start to the day, with the FTSE 100 down 48.36 points to 5290.02 in the wake of Fitch’s downgrade of Greek sovereign debt, amid growing talk of its possible exit from the eurozone.

Moody’s downgrade of 16 Spanish banks has put more pressure on the sector, with Royal Bank of Scotland down 0.61p to 20.45p and Lloyds Banking Group 0.75p lower at 26.9p. Barclays has fallen 2p to 179.9p.

But building materials group Wolseley is leading the losers, down 65p at £21.24 on worries about the outlook for its US business after disappointing data from the world’s largest economy on Thursday.

Among the mid-caps, the London Stock Exchange has added 52.5p to £10.17 after it announced a 30% rise in full year profits. In a buy note James Hamilton at Numis said:

[This was a] strong result from the LSE, 6% ahead of consensus excluding exceptional gains. With the benefits of the acquisitions largely still to flow through the profit and loss account, we believe the LSE offers good value at less than 10 times historic earnings.

Kesa, which last year paid private equity firm £50m to take British electricals group Comet off its hands, warned that trading ‘remained weak in most of our markets’

Kesa Electrical shares dropped 10% on Thursday after the company warned of a 10% fall in sales at its French supermarkets.

Kesa, which last year paid private equity firm £50m to take British electricals group Comet off its hands, warned that trading “remained weak in most of our markets”. The warning made Kesa’s shares the biggest fallers in the FTSE 350 this morning.

Like-for-like sales dropped by 5.9% across its European businesses. The biggest decline was in sales at its Darty France supermarkets where sales declined by 10% on a like-for-like basis as consumers tightened their belts in advance of the French presidential elections.

Thierry Falque-Pierrotin, Kesa’s chief executive, warned that: “Since last reporting in January trading conditions have been volatile and have remained weak in most of our markets, particularly in Vision [TVs, DVD players, etc] and in Italy and Spain.”

TV sales dropped by more than 30% because of the digital switchover in France.

Kesa said it would continue with its “relentless focus” on cutting costs to prepare for another tough year ahead.

Earlier this year Kesa was forced to swallow an additional £15m writedown on Comet losses despite having already agreed to pay private equity firm OpCapita a £50m dowry to take the UK business of its hands. The extra writedown came after Comet’s Christmas trading was so poor its debt exceed the “net debt threshold” agreed with OpCapita.

Across the markets, the FTSE 100 was down 24 points in early trading at 5381, as the euro crisis continued to weigh on the markets. ICAP was the biggest riser, gaining 11.4p to 347.9, following confirmation that it is negotiating to buy the Plus Markets Group, the UK exchange for small companies that is planning to close after failing to secure a buyer.

Retailer warns investors that it ‘appears unlikely’ its UK and European profits will meet City expectations this year

French Connection shares lost more than a fifth of their value on Thursday, after the retailer issued its third profits warning of the year.

The company, which made operating losses of £8.2m in its UK and European retail division last year, warned investors that it “appears unlikely” that its profits will meet City expectations this year after it reported a 12% fall in sales over the last three months.

The group as a whole made a £5m profit, but Stephen Marks, the retailer’s founder and chief executive, said the British high street “remains particularly challenging” and warned that it “will not improve in the second half of the year”.

“We therefore remain cautious about the outlook for the rest of the financial year. Given this, it appears unlikely that our profit performance for the full year will meet current market expectations,” he said in a management statement.

The company, which counts the Duchess of Cambridge among its celebrity clientele, also cautioned that forward orders for the winter season were slightly lower than for the same period last year.

French Connection began a strategic review of its UK retail operations in March.

The company’s shares, which have lost 70% of their value since September, were down 23% to 30.25p on Thursday morning.

The most hyped IPO of the year is here, but you won’t be able to trade Facebook’s stock right when the market opens at 9:30 on Friday.

Rating agency Moody’s downgraded 16 Spanish banks on Thursday, the latest sign of distress in Europe.

Investors fled stocks and made a rush toward the safety of U.S. Treasuries Thursday, sending 10-year yield to a record low close, as worries about Greece’s future in the eurozone continued to escalate.

Despite the recent fall in oil prices, analysts say President Obama may tap the Strategic Petroleum Reserve as sanctions on Iran take hold.

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