Date: Friday 29 Jun 2012
- EU leaders make break-through agreements
- FSA reveals another banking scandal
- Banks rise after yesterday's sell-off
The FTSE 100 surged in early trading on Friday on the back of developments at the EU summit after European leaders issued a joint statement after the first day of discussions.
Leaders declared their resolve to "break the vicious circle between banks and sovereigns" once an effective system for joint bank supervision has been set up. Once that mechanism is set up the European Stability Mechanism may, “following a regular decision, have the possibility to recapitalise banks directly.”
The negotiations, which finished at 04:30 in Brussels, also saw European authorities drop the requirement that governments get preferred creditor status on crisis loans to Spain’s banks, according to remarks attributed to European Union President Herman Van Rompuy.
Following Barclays's 16% drop yesterday after it was found to have manipulated interbank lending rates, shares rebounded today despite the Financial Services Authority (FSA) revealing it has found "serious failings" in the way lenders sold complicated interest rate protection products to businesses. Some businesses claims they have been bankrupted by the liabilities they took on when entering the so-called “swap” arrangements.
Yesterday's news prompted calls for the resignation of Barclays CEO Bob Diamond and today's developments will have further dented confidence in the British lender. Oriel Securities downgraded its rating for Barclays this morning to 'hold'. Sector peers Lloyds, HSBC and RBS were also making gains this morning as they pulled back after yesterday's sharp falls.
Outsourcing group Serco rose after completing the disposal of its Technical Services business to engineering giant AMEC for £137m.
Miners were on the up after the positive developments in the Eurozone last night. ENRC, Vedanta and Antofagasta were registering decent gains early on.
House-builder Berkeley Group jumped after seeing both revenues and profits surge in the 2011/2012 fiscal year and saying it would hit its medium-term profit targets quicker than first thought.
Two weeks after confirming speculation that it was interested in German engineering group Elster, buy-out firm Melrose said that it is looking to take over the firm by spending $2.3bn, or £1.5bn. Melrose will finance the acquisition and expenses through a combination of new debt and by way of a £1.2bn fully underwritten rights issue.
Digital sports media company Perform Group rose after it acquired a majority stake in Mackolik Internet, which owns and operates a number of Turkey's leading independent sports websites including mackolik.com and sahadan.com.
Edinburgh-based oil and gas giant Cairn Energy advanced after selling a 3.5% interest in its oil unit Cairn India to help support its recent spate of acquisitions.
Private equity group 3i gained after saying that jobs will be slashed as it seeks to recover from its five-year long share price slump.
Dairy Crest edged higher after saying that it has received a binding offer from Montagu Private Equity for the proposed disposal of the entire issued share capital of St Hubert following a strategic review of the business. Montagu is offering a consideration of €430m (£344m) in cash for St Hubert.
FTSE 100 - Risers
CRH (CRH) 1,201.00p +4.62%
Weir Group (WEIR) 1,505.00p +3.79%
Evraz (EVR) 249.40p +3.49%
Aviva (AV.) 271.00p +3.47%
Schroders (SDR) 1,331.00p +3.34%
Vedanta Resources (VED) 900.50p +3.33%
Eurasian Natural Resources Corp. (ENRC) 413.10p +3.20%
Wolseley (WOS) 2,356.00p +3.11%
IMI (IMI) 814.00p +3.04%
Johnson Matthey (JMAT) 2,211.00p +2.89%
FTSE 100 - Fallers
Pennon Group (PNN) 768.00p -1.16%
Severn Trent (SVT) 1,632.00p -0.79%
United Utilities Group (UU.) 672.00p -0.37%
GlaxoSmithKline (GSK) 1,441.00p -0.35%
Vodafone Group (VOD) 180.35p -0.25%
SSE (SSE) 1,371.00p -0.22%
Morrison (Wm) Supermarkets (MRW) 265.80p -0.11%
Centrica (CNA) 316.10p -0.09%
Sainsbury (J) (SBRY) 295.90p -0.03%
Associated British Foods (ABF) 1,273.00p +0.08%
FTSE 250 - Risers
Dixons Retail (DXNS) 18.69p +5.47%
Bumi (BUMI) 320.00p +4.92%
Henderson Group (HGG) 100.60p +4.90%
Afren (AFR) 103.20p +4.88%
Talvivaara Mining Company (TALV) 164.10p +4.52%
Salamander Energy (SMDR) 169.50p +4.50%
Berkeley Group Holdings (The) (BKG) 1,426.00p +4.47%
Taylor Wimpey (TW.) 47.25p +4.40%
Barratt Developments (BDEV) 135.90p +4.38%
New World Resources A Shares (NWR) 313.10p +4.37%
FTSE 250 - Fallers
Ocado Group (OCDO) 76.25p -4.09%
Chemring Group (CHG) 274.10p -1.37%
Micro Focus International (MCRO) 521.50p -1.14%
BH Global Ltd. USD Shares (BHGU) 11.15 -0.80%
Domino's Pizza Group (DOM) 512.50p -0.68%
Logica (LOG) 105.60p -0.66%
Ted Baker (TED) 900.00p -0.55%
Spirit Pub Company (SPRT) 50.50p -0.49%
Synergy Health (SYR) 905.50p -0.49%
Drax Group (DRX) 557.50p -0.27%
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