Market Report: Yell makes a big noise on last day in FTSE 100

The Yellow Pages publisher Yell enjoyed a positive send-off from the FTSE 100 yesterday. After a torrid week, when it slumped from an opening price of 161.7p on Monday of last week to 138p on Thursday, Yell soared to an intra-day high of 166.1p yesterday, up more than 20 per cent.

Cyclical concerns about the industry, about the future of directories in an increasingly internet-driven culture and about the company's debt-laden balance sheet, sparked the recent sell-off in Yell, which will join the FTSE 250 today after the recent FTSE quarterly index review.

A feeling that the stock had been oversold, coupled with a realisation that, for all the burden on its balance sheet, the company would only have to refinance its debt in 2011 – a fair distance from today's crammed credit markets – took Yell up12.32 per cent, or 17p, to 155p, leaving it in second place on the FTSE 100 leader board.

In the wider market, banking stocks were the feature of the day. The sector bounced back after being hit by false rumours about HBOS last week. Positive news from the US, where JP Morgan raised its offer for its troubled rival Bear Stearns, helped the banks up the leader board.

HBOS, which was also boosted by confirmation of share buying by senior management, was the best of the lot, gaining almost 15 per cent or 70.75p to 544.50p, claiming first place on the FTSE 100. Other banks were also buoyant yesterday, including Royal Bank of Scotland, which climbed 30p to 351.25p, Barclays, which added 30p to 459p, Standard Chartered, which gained 109p to 1790p, and Lloyds TSB, which climbed 27.50p to 461.50p.

Overall, driven by the banking sector, the FTSE 100 gained 193.9, or 3.5 per cent, to 5,689.1. And while late-afternoon news from the US – where the Conference Board's consumer confidence index plunged to a five-year low, renewing fears of a sharper-than-expected economic slowdown – took the London benchmark off earlier highs, it failed to end the market rally.

The FTSE 250 was also up, gaining 346.2, or 3.7 per cent, to 9,794.6.

Beyond the banks, the housing sector staged a comeback. Better-than-expected US housing data on Monday, which showed that American home sales rose for the first time in seven months in February, took Persimmon up to fourth place on the FTSE 100 leader board, up 71.50p to 770p. Taylor Wimpey, which will take its place among the FTSE 250 today, spent its last day on the FTSE 100 at third place on the leader board, up 19.50p at 183.30p.

Others in the sector, including Bovis Homes, which gained 74p to 597.50p, Redrow, which added 33.75p to 303.75p, Barratt Developments, which climbed by 39.25p to 417.75p, and Bellway, which gained 57p to 810p, were also up yesterday.

For similar reasons, the construction materials company Wolseley gained 50.50p to 550.50p.

The supermarket group Wm Morrison was less fortunate. While noting that the company has been "the clear trading winner of late in the UK", analysts at Merrill Lynch none the less downgraded its stock, to "neutral" from "buy". "In attributing it with a 'Waitrose for the workers' moniker, we do believe Morrisons has found a good balance between quality, service and price. Hence, holders of the shares should stick with the story," wrote Merrill's analyst John Kershaw, adding: "However, having so outperformed and with trading inevitably likely to ease back from sky-high levels, we expect a quieter period for the shares."

The downgrade contributed to a slide in the company's share price, down 7.50p to 272p.

On the FTSE 250, the Kazakhstan-focused miner Eurasian Natural Resources climbed 91p to 976p as it prepared to take its place today on the FTSE 100.

The sugar maker Tate & Lyle, which was also promoted in the recent index review, was up 60p to 583p. The aerospace and defence systems company Cobham, the final FTSE 250 constituent which is due to enter the FTSE 100 today, was down 3p to 199.50p.

Among the risers, Go Ahead gained 54p to 1582p after being upgraded to "buy" from "add" at Brewin Dolphin, whose analysts view the stock, which has suffered since the company announced its interim results, as a buying opportunity.

On AIM, the interactive gaming company Netplay TV was up after announcing a deal with the entertainers Jim Bowen, Cannon and Ball, who will join the host Greg Scott for the launch of a daily bingo show. The Celebrity TV Bingo programme will give bingo players the change to play the game online and on the TV at the same time.

News of the show, which follows Netplay's earlier £6.25m acquisition of www.bingos.com, took the company's shares up by 2.75p to 20.75p.