Newspaper groups were in focus after an upbeat note from Merrill Lynch.
Daily Mail & General Trust was among the leading risers in the FTSE 100 after Merrill began coverage of the group with a buy recommendation and a 680p price target. Merrill predicts earnings growth of around 9% in the next two years. "This is a function of 1) colour ad opportunities at the nationals, 2) loss reduction at London Lite and Australian radio, and 3) strong growth in resilient B2B data," said the bank.
Longer term, added Merrill, "the key drivers of growth are 1) shifting the nationals mix towards digital, 2) profitable growth from B2B data businesses at both DMG Info and Euromoney, and 3) shifting the mix to B2B exhibitions at DMG World Media."
It also said the company could have up to £500m to spend on acquisitions by 2009.
All this lifted DMGT 5.5%, and also benefited other newspaper groups. Johnston Press rose 7% to 270.5p, and Trinity Mirror was 12.5p to 346.5p.
But not all analysts note have a predictable effect. Dresdner Kleinwort started coverage of drugs group AstraZeneca with a reduce recommendation and a £20 target. Among a number of choice phrases Dresdner called the company "potentially the worst performer in the sector" and predicted "potential for up to eight years of poor growth".
Astra however rose 55p to £22.10 as investors shook off these concerns.
Overall the FTSE 100 regained lost ground, up 6.3 points at 6344.2 by mid-afternoon. London was helped by a 100 point gain by Wall Street in early trading, thanks to better than expected profits at retail group Wal-Mart.
There has been some interest in online fashion retailer Asos, Asos up 12.7p to 175p. The company is again being touted as a bid target - despite Hennes & Mauritz recently denying reports it was interested. Analysts at Daniel Stewart issued a buy note, saying Asos was an attractive target for a number of major retailers. They reckon any bidder could afford to pay up to 214p a share.
