Far from letting their fingers do the walking to sort out their £3.8 billion debt, managers of Yellow Pages publisher Yell have been keeping them crossed, one broker said yesterday.

The company has consistently refused to reveal details of its bank covenants but John Davis, the finance director, has let slip to analysts that if underlying earnings remain steady in the next financial year from April 2009 he will have to talk to the banks. He also said that if earnings are flat in the current year Yell is only 5 per cent away from a breach.

Paul Gooden, analyst for ABN Amro, said: “There is a material risk of a covenant breach next year.” Yell shares gained 1¼p to 61¾p, valuing it at £482.3 million compared with its £3.8 billion debt as Mr Gooden said that the banks would probably insist on a rights issue before they agreed to refinance £3.8 billion debt. He suggests a five for two rights issue at 39p would raise £760 million. But Mr Gooden said: “Management has adopted a wait and see approach which has not served shareholders well.”

The FTSE 100 gained 50.3 points to 5,476.6 on a rollercoaster day rising as high as 5,490.6 and falling as low as 5,358.5 as the index’s usual prop – miners and oils – went up and down on speculation that the commodities boom was finally over. There were worries that steel demand has passed a peak as the car industry goes into reverse, meaning that the price of steel’s raw materials, iron ore, coking coal and ferrochrome, could also dive. Coal for European delivery experienced a sharp sell-off on Wednesday.

Coal and iron ore producers such as BHP Billiton, down 10p at £17.49, and Rio Tinto, off 51p at £54.60, could be affected. Liberum Capital, the investment bank, believes that “in a correction scenario”, earnings downgrades for ENRC, up 14p at £10.79, and International Ferro Metals, down 7¾p to 97p, could be dramatic.

Copper producers managed gains, with Antofagasta up 36½p at 604½p and Kazakhmysup 45p at £14.42 after Jeremy Gray at Credit Suisse said copper prices had broken above their usual range and advised that miners are set for a “massive rally”.

J Sainsbury lost another 10p to 280p after Marks & Spencer’s warning. It too has been losing food market share in recent weeks. Premier Foods, a key M&S supplier, lost 9½p to 73¾p. Sports Direct International lost 7p to 69p ahead of results next week.

Carphone Warehouse fell 4.8p to 182p amid worries that it will overpay for Tiscali’s UK broadband business at a time when the market is declining. Mobile phone customers are trading down to the less profitable pay-as-you-go rather than contracts.

Johnston Press was under further pressure, down 4½p to 35½p, after talks suggested it would need a second rights issue as the first was not enough.

Pendragon, the highly indebted car dealer that on Monday said it could not predict profits this year, fell 2p to 12¼p. Warnings that General Motors could go bankrupt have not helped.

Avis Europe, the car hire group, lost 2p to 18p after a profit warning from US peer Avis Budget.

— New York: Wall Street blue-chips rose after Wednesday’s dramatic falls on relief that American job losses were not as steep as had been predicted. At the close the Dow Jones industrial average was up 73.00 points at 11,288.50.

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