Investors are starting to take on slightly more risk, according to Atif Latif, director of trading at Guardian Stockbrokers.
He said: "We have seen volumes starting to pick up slowly as investors are becoming slightly more risk on mode. The volume at the start of the week was quite low and hence the reason for the volatility.
"The cash that is currently on the sidelines is being used to buy growth companies that are falling with the general market and there is appetite on the buy side for specific names."
Meanwhile, analysts at JP Morgan Cazenove said today miner Antofagasta (LON:ANTO) had struck a good deal on the sale of its Antucoya project on Wednesday.
They maintain a 'neutral' rating of the stock and have a price target of 1130 pence for the shares. The analysts have, however, adjusted some estimates.
"Antofagasta announced board approval of its Antucoya project on Wednesday afternoon as well as the sale of a 30 per cent stake in the project to Marubeni for a consideration of $350 million. Marubeni will also fund its proportionate share of the capex for the project," said analyst Roger Bell.
"The net effect of the two changes described above is an 11 per cent decrease in our full year 2011 earnings EPS estimate to $1.36 per share," said the analyst, who added that NPV (net present value) increases by just over 1 per cent to £9.11 per share.
Meanwhile, life insurer Old Mutual (LON:OML)'s announcement that it plans to divest Skandia Insurance Company - its Nordic business for £2.1 billion (Skr22.5 bn) to Skandia Liv was greeted by Goldman analysts by putting their estimates and price target under review.
Goldman believes the transaction is positive.
"Assuming this transaction is approved at the Old Mutual EGM, which we believe to be a formality owing to the premium of the transaction price over book value, the company should become significantly less complex and have less debt.
"This should allow it to either return capital and or revise its payout ratio to 40 per cent from the current 23 per cent for FY2011 on our estimates. In our opinion, today’s transaction is significantly positive for the group and its share price," it said.
Elsewhere, Evolution Securities has maintained its 'buy' rating on oil major BP (LON:BP) today after the company said that it had settled with contractor Cameron over the Macondo incident.
Cameron has agreed to pay BP US$250 million in exchange for settling all claims between both parties. No liabilities are admitted on either side.
"Our target price of 510 pence is the lower end of a valuation range where the upside is 771 pence a share," said analyst Richard Griffith, who added that it maintained a 'buy' rating on the stock.
In other coverage, Panmure Gordon has downgraded IT services firm Logica (LON:LOG) to 'hold' from 'buy'.
The company announced this week that it was speeding up restructuring and cutting 1,300 jobs due to the decline in European markets.
In a note today, the broker said: "The restructuring is half baked and half hearted shedding 1300 staff when unplanned staff attrition is 14 per cent.."
"We reduce our EPS from 10.4p to 9.7p and reduce our target price to 92p. We have a 'Hold' because we don’t think management has the gumption to drive through the changes necessary to create shareholder value."
Elsewhere, Dragon Oil (LON:DGO) reached a significant milestone in its ongoing expansion as its latest well brings total daily production up to the 70,000 barrel mark.
This morning it revealed that the Dzheitune (Lam) 28/164 development well has now been completed. Testing showed an initial production rate of 3,018 barrels of oil per day.
Davy analyst Caren Crowley said the broker liked the company.
“It is undervalued despite management having more than once revised upwards its production guidance in 2011.”
The stock is trading at a 26 per cent discount to Davy’s 632p net asset value. Furthermore the firm’s gas volumes, which are currently not being marketed, could be worth around 70p a share, the analyst added.
Crowley said the stock’s valuation looked cheap and Dragon’s balance sheet is strong.
“The strength of the balance sheet is very friendly for deals and further distribution of income to shareholders. We expect more deals, and if the financial markets remain nervous, the opportunities should improve.”
DiamondCorp’s (LON:DCP) receipt of £2 million from an insurance settlement is a great result for the company, according to analysts at Ocean Equities.
Yesterday the South Africa based diamond mining firm revealed an agreement with its insurer over a claim for damage to timbers and pumps in the vertical shaft at the Lace mine. The timbers were damaged incurred during heavy rains earlier in this year.
According to Ocean, DiamondCorp is in an advantageous position because it is now debt free and it can tie project development debts to its hard assets at the processing plant.
“We remain in a high diamond price environment in spite of the recent correction, which should be viewed in respect to the longer term trends in the market which saw diamond prices reach record highs in Q3’11 from recent lows over a short period.
“This has been brought about by inventory building across Asia to meet new retail demand. The current buoyant diamond market conditions and the expected strong profit margin from the Lace mine make it an attractive asset for debt financing.”