|CATEGORY: MARKET REPORT - CLOSE SECTOR: BANKS
Wed 04 Jul 2012
LONDON (SHARECAST) - - Former Barclays CEO quizzed by MPs over LIBOR fixing
techMARK 2,048.83 0.00%
FTSE 100 5,684.47 -0.06%
FTSE 250 11,161.21 -0.26%
- Market subdued as Wall Street closed
- Tomorrow's policy decisions eyed
After a brief foray into positive territory, gains for the Footsie were pared in the final hour of trade with the focus shifting to Barclays as its former boss was being grilled by MPs over the LIBOR scandal. Weighing on sentiment today was disappointing economic data from China and Europe, while volumes were said to have been light given that Wall Street was closed for Independence Day.
HSBC's China services purchasing managers' index (PMI) fell from 54.7 to 52.3 in June, its slowest rate of expansion in 10 months. HSBC chief China economist Hongbin Qu said: "This, plus the ongoing slowdown of manufacturing sectors, points to growing pressures on the jobs market - the last thing Beijing policy makers want to see".
Meanwhile, Eurozone services PMI rose from 46.7 to 47.1 in June but still remains firmly under the crucial 50-point benchmark that separates contraction and expansion.
Both the European Central Bank (ECB) and the Bank of England (BoE) will give their policy decisions on Thursday. The ECB is widely expected to cut interest rates to a new record-low, although International Monetary Fund Managing Director Christine Lagarde has said that an increase in quantitative easing my be a better option.
"While nobody really expects that a 25 basis-point cut will jump start growth in Europe, it would give a boost more of a psychological and a symbolic nature showing that the ECB is not leaving Europe to their own devices instead is willing to break new ground by for the first time in its history lowering rates to below 1%," according to Markus Huber, head of German HNW Trading at ETX Capital.
Meanwhile, the BoE is predicted to ramp up its own asset purchase programme tomorrow. Matthew Nelson, a sales trader at Spreadex, said this morning: "Following a closer than expected vote on QE in June the question is no longer if but by how much the Bank of England and Monetary Policy Committee will decide to inject in to the economy this time round after the UK’s latest bout of poor figures, with many looking for an increase of £50bn on the current £325bn pot."
FTSE 100: All eyes on Bob, Barclays falls late on
With former Chief Executive Officer Bob Diamond in the hot seat, facing an intense quizzing by MPs of the Treasury Select Committee over the manipulation of interbank lending rates, shares in Barclays sank after an earlier spell in the blue. To sum up the meeting, Diamond acknowledged that a small group of people within the bank were guilty of wrongdoing and were dealt with. However, he said that no report of LIBOR tampering went above desk supervisor until investigations started.
Potential merger partners Glencore and Xstrata were high risers despite reports the Xstrata shareholder Knight Vinke said it was against the deal on its original terms.
Supermarket giants Tesco and Morrisons were out of favour today after ING downgraded its rating on both stocks. The Dutch broker cut its recommendation for Tesco from ‘hold’ to ‘sell’, saying that the chain should make more price cuts to retain its customers. The rating for Morrisons was also reduced from ‘buy’ to ‘hold’ on the back of the recent slowdown in sales growth and a lack of short-term catalysts.
Oil giant Tullow fell despite revealing that it revenues in the first half of 2012 would be a record $1.15bn, up from $1.06bn the year before. Analysts at Investec said the trading update was in line with forecasts but has reduced its EPS predictions by around 10% for 2013 and 2014 on the back of lowered Brent crude estimates.
REIT group British Land and engineering support services firm Babcock were falling heavily after going ex-dividend - from today, investors will not have the chance to benefit from their latest dividend payouts. Burberry was another ex-div stock today but was putting in a robust performance (finishing slightly higher) after Credit Suisse named the stock as its top pick in the European luxury goods sector.
FTSE 250: Ex-div stocks provide a drag
Second-tier constituents Halfords, TalkTalk and Cranswick were lower after going ex-dividend. Meanwhile, financial group Phoenix was among the best performers after Berenberg upgraded its rating on the stock to 'buy'.
Fund manager Henderson fell after Morgan Stanley downgraded its rating on the stock to 'equal weight'.
Support services firm Carillion dropped after confirming predictions that its profits will be lower in the first half of the year.
FTSE 100 - Risers
Aberdeen Asset Management (ADN) 263.80p +3.45%
Glencore International (GLEN) 312.05p +2.73%
Xstrata (XTA) 820.80p +1.79%
GKN (GKN) 186.60p +1.63%
Resolution Ltd. (RSL) 203.00p +1.50%
Carnival (CCL) 2,223.00p +1.18%
Capita (CPI) 673.50p +1.13%
Croda International (CRDA) 2,357.00p +1.03%
Serco Group (SRP) 554.50p +0.91%
Tate & Lyle (TATE) 656.00p +0.85%
FTSE 100 - Fallers
Vedanta Resources (VED) 942.00p -1.98%
Aviva (AV.) 281.40p -1.92%
Tullow Oil (TLW) 1,502.00p -1.89%
Babcock International Group (BAB) 871.00p -1.47%
Prudential (PRU) 741.00p -1.40%
British Land Co (BLND) 514.50p -1.34%
Tesco (TSCO) 315.95p -1.19%
ICAP (IAP) 331.00p -1.14%
Admiral Group (ADM) 1,172.00p -1.10%
Schroders (SDR) 1,366.00p -1.01%
FTSE 250 - Risers
Gem Diamonds Ltd. (DI) (GEMD) 211.40p +4.29%
Yule Catto & Co (YULC) 145.20p +3.64%
Talvivaara Mining Company (TALV) 152.90p +2.89%
NMC Health (NMC) 203.00p +2.84%
Phoenix Group Holdings (DI) (PHNX) 489.30p +2.82%
Ocado Group (OCDO) 78.85p +2.40%
Close Brothers Group (CBG) 779.50p +2.30%
Inchcape (INCH) 357.40p +2.26%
Atkins (WS) (ATK) 714.50p +2.22%
F&C Asset Management (FCAM) 86.10p +2.14%
FTSE 250 - Fallers
Halfords Group (HFD) 208.00p -8.93%
Aquarius Platinum Ltd. (AQP) 48.22p -5.45%
De La Rue (DLAR) 974.50p -4.74%
Man Group (EMG) 67.55p -4.66%
Avocet Mining (AVM) 68.15p -4.35%
Britvic (BVIC) 303.50p -4.17%
Carillion (CLLN) 273.10p -3.19%
Domino Printing Sciences (DNO) 552.00p -3.16%
Shanks Group (SKS) 76.85p -2.97%
Computacenter (CCC) 309.80p -2.82%
|Babcock International Group
|British Land Co
|Morrison (Wm) Supermarkets
|Phoenix Group Holdings (DI)
|TalkTalk Telecom Group
|Fixed Line Telecommunications
|Food & Drug Retailers
|Food Producers & Processors
|Oil & Gas Producers
|Real Estate Investment Trusts