Date: Thursday 12 Jul 2012
- FOMC minutes disappoint
- Miners tank after Credit Suisse cuts forecasts
- Aegis rockets after Dentsu offer
The FTSE 100 dropped sharply in morning trade on Thursday with sentiment dampened by last night's statement by the Federal Reserve which didn't give any hints at further stimulus measures for the world's largest economy.
The Fed released the minutes of the latest Federal Open Market Committee meeting on Wednesday evening at which is decided to expand its 'Operation Twist' programme. "Given the weak jobs data and slowing growth we've seen over recent months, many were expecting the minutes to contain hints that the US would embark on QE3 over the coming months. The hopes did not materialise."
Investors will also be digesting the news that both South Korea and Brazil cut interest rates and the unemployment rate in Australia edged higher.
China will reveal its second-quarter gross domestic product (GDP) growth rate tomorrow, with government think-tank Development Research Centre (DRC) expecting the Chinese economy to have grown 7.5% in the three-month period, down from 8.1% growth in the first quarter. While the government is targeting 7.5% GDP growth for 2012, DRC thinks that the economy could actually expand by 8% over the year.
Fund manager Ashmore took a tumble after saying assets under management fell 3.3%to $63.7bn in the quarter ended June 30th as worries about the Eurozone crisis and global growth rattled investor confidence.
Security giant G4S was a heavy faller on reports that it had encountered delays in training security staff for the Olympics. "We have encountered some delays in progressing applicants through the final stages but we are working extremely hard to process these as swiftly as possible," the firm said. Defence Secretary Philip Hammond is expected to announce details of an extra 3,500 troops to help with security for the Games today.
Mining heavyweights Rio Tinto, BHP Billiton, Anglo American, Antofagasta and ENRC were registering steep losses after Credit Suisse slashed target prices across the sector after lowering commodity price estimates. Rio Tinto announced this morning that its Chief Financial Officer is to retire at the end of next year.
Primark-owner Associated British Foods fell despite reporting that revenues rose 11% in the 40 weeks to June 23rd, in line with the rate reported in the interim results.
The relatively brief stock market history of Aegis is set to come to an end with the the media and digital communications group agreeing to a takeover by Japanese advertising agency Dentsu. Dentsu is offering 240p in cash for each Aegis share, almost half as much again as the shares were trading at in London on the day before the agreed bid announced. The offer terms value the whole of Aegis at around £3.16bn.
Oil and gas development and production company RusPetro jumped after saying it was confident of hitting an exit rate of 10,400 barrels of oil per day for 2012.
Oxford Instruments, a high technology tools and systems for industry and research, slipped despite saying it has made an encouraging start to the year with orders, sales and profits all ahead of the same period last year.
FTSE 100 - Risers
ITV (ITV) 73.30p +2.02%
Resolution Ltd. (RSL) 211.30p +1.15%
Evraz (EVR) 252.70p +1.08%
WPP (WPP) 790.50p +0.76%
British Sky Broadcasting Group (BSY) 689.00p +0.73%
Admiral Group (ADM) 1,175.00p +0.60%
Land Securities Group (LAND) 770.00p +0.59%
Old Mutual (OML) 154.60p +0.59%
International Consolidated Airlines Group SA (CDI) (IAG) 158.90p +0.51%
GKN (GKN) 211.00p +0.48%
FTSE 100 - Fallers
Ashmore Group (ASHM) 310.70p -5.85%
G4S (GFS) 282.20p -2.82%
Rio Tinto (RIO) 2,964.00p -2.27%
Polymetal International (POLY) 817.00p -2.04%
Anglo American (AAL) 2,014.00p -2.02%
InterContinental Hotels Group (IHG) 1,520.00p -1.94%
Marks & Spencer Group (MKS) 312.10p -1.92%
Standard Chartered (STAN) 1,430.00p -1.85%
IMI (IMI) 795.00p -1.67%
BG Group (BG.) 1,283.50p -1.65%
FTSE 250 - Risers
Aegis Group (AGS) 236.00p +45.50%
Ruspetro (RPO) 141.00p +5.78%
Melrose (MRO) 370.10p +4.34%
Cable & Wireless Communications (CWC) 31.47p +3.62%
Premier Oil (PMO) 370.50p +3.26%
Computacenter (CCC) 312.70p +2.52%
Barratt Developments (BDEV) 134.80p +1.35%
Informa (INF) 376.10p +1.29%
Salamander Energy (SMDR) 182.00p +1.22%
F&C Commercial Property Trust Ltd. (FCPT) 103.30p +1.08%
FTSE 250 - Fallers
Bodycote (BOY) 312.40p -4.00%
Bumi (BUMI) 306.10p -3.86%
Aquarius Platinum Ltd. (AQP) 40.60p -3.43%
Menzies(John) (MNZS) 587.50p -2.89%
Kentz Corporation Ltd. (KENZ) 376.60p -2.64%
Fidessa Group (FDSA) 1,501.00p -2.41%
Morgan Crucible Co (MGCR) 265.50p -2.32%
BlackRock World Mining Trust (BRWM) 561.50p -2.18%
BH Global Ltd. USD Shares (BHGU) 11.25 -2.17%
Renishaw (RSW) 1,312.00p -2.09%
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