London close: Stocks stage late rally but sentiment still fragile
Market Movers
- techMARK 2,062.32 +0.01%
- FTSE 100 5,786.25 +0.33%
- FTSE 250 11,797.22 -0.05%
- Greece granted two more years to meet target - German sentiment worsens in November - ITV soars nine per cent after third-quarter figures
A positive start on Wall Street prompted a rally for equity markets
this side of the Atlantic on Tuesday afternoon, as investors temporarily
shrugged off concerns about the impending 'fiscal cliff', the ongoing
Greek debt crisis and a disappointing reading of German sentiment.
Nevertheless, financial trader David White from Spreadex said this
afternoon: "The mood in the market can once again be described as
fearful and concerned, as investors have spent most of the day raising
cash in line with fragile sentiment." After a Eurogroup meeting yesterday, Chairman Jean-Claude Juncker stated that Greece's
deadline to bring debt down to 120% of gross domestic product by 2020
would be extended to 2022. However, the decision to give the go-ahead on
the next 31.5bn of aid was postponed until another meeting next week,
just as a 5bn bond repayment is due this Friday. International Monetary Fund (IMF) Managing Director Christine Lagarde openly showed her disapproval
and said that the two organisations obviously had "different views" on
the timetable that the Hellenic Republic needs to complete. Economic data from Germany dampened the mood further this morning, after the Germany ZEW economic sentiment index
worsened to -15.7 in November, from -11.5 the month before. Analysts
were expected a slight improvement to -10.0. ZEW President Wolfgang
Franz said: "Prevailing recessionary developments in the Eurozone impact
the German economy via foreign trade and a lack of confidence. This is
likely to be a burden for economic growth in Germany during the next six
months". In domestic news, the UK consumer prices index
(CPI) measure of annual inflation came in at 2.7% in October, up from
2.2% in September, according to the Office for National Statistics. This
rise was considerably stronger than anticipated by analysts, who had
pencilled in 2.4%. The ONS also said that producer price index (PPI) was flat in October at an annualised 2.5%, in line with expectations. There was also news that China
is "actively studying" the expansion of the property tax programme on
concerns that transaction volumes and home prices could increase
"substantially", according to the Minister of Housing and Urban-Rural
Development, Jiang Weixin.
FTSE 100 movers: ITV soars after third-quarter report
Shares in terrestrial broadcaster ITV
surged today after a well-received third-quarter statement. Group
revenues of £1,573m were broadly in line with expectations despite
weaker-than-expected ad revenues, but analysts were impressed with
better-than-forecast Studios profitability and cost savings. Credit
Suisse this morning raised its target for the stock from 100p to 110p
and reiterated its 'outperform' rating. Banking giant Lloyds
was continuing to rise following a strong set of results last week and
an upbeat note from UBS yesterday, which raised its target from 44p to
46p, saying that the bank's third-quarter results showed "solid progress
and improving momentum". Continuing delays on Anglo American's
Minas-Rio iron ore project in Brazil are likely to push up the cost of
the project more than the market had been expecting, causing shares to
drop. Sector peer BHP Billiton edged higher after saying that it is selling its diamonds business to Canadian miner Harry Winston for $500m in cash. British Gas owner Centrica
was out of favour on claims that it had a hand in the manipulation of
wholesale gas prices, something that was vigorously denied by the firm. Telecoms giant Vodafone
fell after plunging into the red after being hit by a huge £5.9bn
impairment charge during the half year ended September 30th, related to
its operations in Spain and Italy. Outsourcing giant Capita
was also a heavy faller despite saying it is confident it will deliver
3% organic growth for the year and an improved cash conversion rate for
2012 as compared to 2011. Panmure Gordon said this morning that the
stock's premium valuation (compared with the sector) is "too rich". Building materials giant CRH
rose despite scaling back its earnings forecast this year on the back
of ongoing weakness in Europe and Hurricane Sandy disrupting its
operations in eastern America. G4S gained on reports that fund manager Invesco Perpetual has increased its stake in the security giant from 11.3% to 12.22%.
FTSE 250: Talvivaara continues to gall
Nickel miner Talvivaara
plummeted again today as market continue to speculate about the impact
that last week's gypsum pond leakage at its project in Finland will have
on production. According to media reports this afternoon, toxic amounts
of nickel have been found at a nearby lake. The Finnish Environment
Institute is reported to have said that concentrations now exceeding the
level "regarded as harmful to organisms". Uranium concentration is also
now thought to be a concern. Bank note printer De La Rue
fell sharply after saying that while banknote print volumes were up
4.0% to 2.9bn notes in the six months ended September 29th, banknote
paper volumes declined 15% to 4,500 tonnes. Telecoms operator TalkTalk
soared into the top spot after it said it is on track to return to
revenue growth in the full year as half year revenue fell by two per
cent to £828m. Regneration specialist St Modwen was
also rising after it was reported on Monday that construction on a
housing estate it is developing has begun. The company has said that the
first houses are expected to come on the market in December. bwin.party digital entertainment
fell after it was forced to confirm that its Chief Executive Officer,
Norbert Teufelberger, has agreed to attend an interview with the Belgium
authorities. It was reported earlier on Tuesday that the CEO was
detained by police during the Responsible Gaming Day conference in
Brussels, although naturally the company gave no information regarding
this.
FTSE 100 - Risers ITV (ITV) 94.60p +8.99% Lloyds Banking Group (LLOY) 46.52p +3.07% Meggitt (MGGT) 374.10p +2.16% Prudential (PRU) 865.50p +1.94% Whitbread (WTB) 2,434.00p +1.71% Bunzl (BNZL) 1,030.00p +1.48% Compass Group (CPG) 700.00p +1.38% Associated British Foods (ABF) 1,404.00p +1.37% BT Group (BT.A) 227.90p +1.33% Aviva (AV.) 332.50p +1.28% FTSE 100 - Fallers Anglo American (AAL) 1,770.00p -3.15% Centrica (CNA) 310.80p -2.75% Vodafone Group (VOD) 162.50p -2.46% Polymetal International (POLY) 1,125.00p -2.09% Carnival (CCL) 2,502.00p -1.65% Burberry Group (BRBY) 1,231.00p -1.28% Vedanta Resources (VED) 1,090.00p -1.18% Tesco (TSCO) 321.00p -1.15% Evraz (EVR) 233.80p -1.14% Serco Group (SRP) 545.00p -1.09% FTSE 250 - Risers TalkTalk Telecom Group (TALK) 221.00p +18.44% Diploma (DPLM) 453.70p +4.27% St. Modwen Properties (SMP) 209.10p +4.03% Perform Group (PER) 409.90p +3.33% IP Group (IPO) 110.00p +3.29% Petra Diamonds Ltd.(DI) (PDL) 102.00p +2.67% TUI Travel (TT.) 254.50p +2.37% Euromoney Institutional Investor (ERM) 797.00p +2.18% Brewin Dolphin Holdings (BRW) 181.80p +2.13% Savills (SVS) 411.60p +2.08% FTSE 250 - Fallers Talvivaara Mining Company (TALV) 83.40p -12.90% De La Rue (DLAR) 1,006.00p -5.45% Ultra Electronics Holdings (ULE) 1,530.00p -4.79% JD Sports Fashion (JD.) 701.00p -4.69% Bwin.party Digital Entertainment (BPTY) 113.30p -4.15% SDL (SDL) 510.50p -4.04% FirstGroup (FGP) 181.00p -3.98% Chemring Group (CHG) 223.90p -3.78% Kentz Corporation Ltd. (KENZ) 374.00p -3.33% Interserve (IRV) 363.20p -3.17%
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Europe midday: Periphery stocks turn up
-Banks deposit 251bn euros overnight at ECB -Greece auctions 4.1bn euros in T-bills FTSE-100: -0.55% Dax-30: -0.80% Cac-40: -0.59% FTSE Mibtel 30: 0.02% Ibex 35: 0.15% Stoxx 600: -0.40%
The main European Equity benchmarks are now registering large losses.
That after a public disagreement between the International Monetary Fund
and the Eurogroup came to light last night. More
specifically, Eurozone Finance Ministers whose official grouping is
known as the Eurogroup- wish to extend the date for Greece to meet its
target of reaching a public debt to gross domestic product ratio of 120%
to 2022, instead of 2020. The IMF, however, apparently does not see a need for that.
In the final analysis the falling out seems to come down to whether or
not European governments have to take write-downs on their holdings of
Greek debt or not. As well, the Eurogroup´s proposal entails
that a solution must be found to the funding gap of approximately
33bn- which will arise as a result of following the above course of
action. Nevertheless, different reports are again indicating
that so long as Greece does what it needs to then European authorities
will continue to find ways to keep it inside the single currency. In
other words, Brussels at least seems to have garnered sufficient support
for that. Furthermore, Greece´s succesful auction of 4.1bn
in T-bills this morning means hat it now has nearly enough funds to roll
over 5bn in debt coming due on Friday. Potential further buyers will
have until noon on the previous day to present new bids. Acting as a backdrop, there continue to be latent worries regarding the so-called "fiscal cliff" Stateside.
From a sector stand-point the worst performance on the DJ Stoxx 600 is
now to be seen in the following industrial groups: Utilities (-2.93%),
Telecommunications (-1.46%) and Basic resources (-1.29%).
Spanish consumer prices in-line
Spain´s consumer price index came in at 3.5% year-on-year in September (Consensus: 3.5%). French non-farm payrolls were down by 0.3% in the third quarter (Consensus: -0.2%).
Crude off again
The euro/dollar is now falling by 0.19% to the 1.2680 dollar level. Front month crude futures are now down by 0.841 dollars to the $108.16 mark on the ICE. | |