'Masterstroke' by Rolls-Royce earns plaudits from City

The blue-chip giant revealed late last night that not only was it getting $1.5 billion (£955.6 million) from exiting the International Aero Engines consortium, which makes Airbus engines, but that its partner Pratt & Whitney would still pay it revenues for the next 15 years.

In addition to this, Rolls and Pratt will also start a new joint venture that will concentrate on producing engines for the next generation of aircraft.

Analysts were cheering the news as a positive end to what has been a somewhat difficult alliance between the two, with both suing each other last year over patent rights.

Pointing out the initial sum "largely offsets" the £1.4 billion Rolls is paying for German engineer Tognum, Investec's analysts added that the deal could see its earning for the next financial year jump up by as much as 9 per cent. They added that the company remains "way too cheap", and kept their "buy" rating as the shares flew up 41.5p, or 6.63%, to 667.75p.

With the FTSE 100 closing last night at its highest level for more than two months, investors today did not need too much persuading to take profits as the benchmark index dipped by 51.19 points to 5390.61.

After trade surplus data from China disappointed, the miners were pushed back, including Antofagasta and Kazakhmys, which fell 31p to 1119.5p and 21p to 912p respectively.

Man Group was once again occupying its familiar spot at the foot of the blue-chip index, as it continued to fall after the world's largest listed hedge fund announced yesterday its key AHL fund had lost more than 5% last week. The group was knocked back a further 9.4p to 146.9p - the cheapest its shares have been for over eight years.

International Airlines Group flew up 3.6p to 169.45p after scribblers at Deutsche Bank changed their recommendation to "buy". Despite fretting they may be "slightly early with our upgrade call", the analysts said encouraging signs over premium traffic suggested a "collapse... looks unlikely".

Bad news from one of its major peers across the Channel failed to scare investors away from Tesco. The supermarket ticked up 3.1p to 403.8p even though Carrefour - Europe's largest retailer - admitted its operating profit for 2011 could be down by 20%.

Ladbrokes pushed up 2.6p to 130.6p thanks to a positive reaction to its third-quarter figures, but Numis Securites' Ivor Jones was urging caution. The analyst - who cut his advice to "hold" - questioned why its failure to close a deal with small-cap online gaming group Sportingbet was the latest in a run of attempted acquisitions that haven't gone through for the bookie.He speculated whether this may have been caused by a possible split on strategy between Ladbrokes' management and its board.

The gossips returned to Lochard Energy, as the North Sea oil and gas group advanced 5.82% to 13.62p on AIM. The explorer revealed it was in bid talks back in September, but the latest vague rumours - which investors were urged to treat with caution - suggested up to three potential predators could be interested.