Date: Monday 26 Mar 2012
- Germany's IFO index rises for fifth straight month
- Concerns about Spain still on investors' minds
- Aberdeen leads rise on FTSE 100, Ophir surges on FTSE 250
UK stocks managed to extend gains by Monday lunchtime after a confidence survey from Germany rose to a seven-month high.
Germany's Ifo business climate index came in at 109.8 points for March, up from 109.7 in February (revised up from 109.6) according to the IFO Institute, based in Munich. The market was expecting a reading of 109.6. "The robust IFO results, compared to relatively weak PMIs, would then indicate that the domestic economy is performing better than the export-oriented sector and some rebalancing is under way," said Barclays Capital analyst Thomas Harjes.
The STOXX Europe 600 Index lost a total of 2.5% last week as poor manufacturing data from both China and Europe disappointed. While most major benchmarks across the continent edged higher this morning, Spain's Ibex 35 index, dropped after Prime Minister Mariano Rajoy's People's Party failed to secure a majority in the Andalucia regional election with just a few days to go before he presents his 2012 budget.
Italian Prime Minister Mario Monti said at the weekend: “[Spain] certainly made profound reform of the labour market but it did not pay the same attention to public finances. This is causing us big concern because their yields are rising and it wouldn’t take much to recreate trends that could spread to us through contagion."
In other news, Germany is poised to bow to international pressure and allow a temporary increase in the Eurozone’s financial firewall this week, to prevent the crisis in the region’s periphery from spreading to other member states, The Financial Times has reported. Officials in Berlin signalled on Sunday that the government would allow funds to be boosted as a way of calming financial market pressures.
Fund manager Aberdeen Asset Management rose strongly after seeing investors continue to return to equity markets in 2012. Assets under management at the end of February stood at £184.4bn, up from £173.9bn at the end of 2011. Of the £10.5bn increase, £1.4bn was accounted for by net new business, with equities products seeing net inflows of £2.5bn, compensating for net outflows in other parts of the business.
BP was higher after the Sunday Times said that the oil giant has begun auctioning off £2bn-worth of North Sea assets. Meanwhile, shares of IAG were slightly lower on the back of rumours that it is considering the purchase of a stake in American Airlines to pre-empt similar moves by rival airlines.
Utilities giant International Power rose strongly after two sale and purchase agreements announced late morning. The group is offloading its total 17.4% stake in The Hub Power Company for €51m and is acquiring an additional 20.1% interest in Pakistani power plant Uch 1 for €357m.
Randgold Resources was on the rise, rebounding after last week's sell-off on the back of disruption concerns in Mali due to a military coup. Nomura said this morning that while the situation has stabilised somewhat over the weekend, the market will likely apply a higher level of political risk to Randgold's valuation in the short-term. Meanwhile, Randgold's mining peers weren't performing as well today, with Polymetal, Vedanta, ENRC, Glencore, Rio Tinto and Xstrata among the heaviest fallers.
Pharma titan AstraZeneca was under the weather after a US court dismissed its request for an injunction barring the FDA from releasing generic versions of its quetiapine drug onto the market. Sector peer GlaxoSmithKline was also lower.
Shares in the African energy firm Ophir leapt 16% after it announced a record gas discovery off the coast of Tanzania. The firm said the 4.5tr cubic feet (TCF) of gas discovery at its Jodari-1 well, exceeded pre-drill estimates by 55%. The find marks the fourth consecutive gas discovery in the area for the joint venture between Ophir and FTSE 100 peer BG Group - and the largest by Ophir in its history.
Budget airline easyJet which was up 7% after saying that its financial performance in the first half of the year would exceed guidance it gave in January.
Elsewhere, a big mover of the day was leisure industry software group Anite, which jumped 10% after saying that, due a big contract win with Thomas Cook, full-year profits will be at least at the top end of current market expectations.
FTSE 100 - Risers
Aberdeen Asset Management (ADN) 259.60p +3.88%
Tullow Oil (TLW) 1,510.00p +2.51%
International Power (IPR) 381.10p +2.23%
Wolseley (WOS) 2,518.00p +2.19%
WPP (WPP) 879.50p +2.09%
Reed Elsevier (REL) 560.00p +2.00%
Croda International (CRDA) 2,137.00p +1.91%
Tate & Lyle (TATE) 715.00p +1.85%
Petrofac Ltd. (PFC) 1,704.00p +1.79%
Diageo (DGE) 1,535.00p +1.66%
FTSE 100 - Fallers
Polymetal International (POLY) 942.50p -1.87%
ICAP (IAP) 410.80p -1.68%
Vedanta Resources (VED) 1,297.00p -1.37%
Eurasian Natural Resources Corp. (ENRC) 624.50p -1.19%
Glencore International (GLEN) 400.95p -0.99%
Lloyds Banking Group (LLOY) 35.63p -0.95%
Xstrata (XTA) 1,095.00p -0.95%
BT Group (BT.A) 230.10p -0.86%
BHP Billiton (BLT) 1,903.00p -0.76%
Anglo American (AAL) 2,442.50p -0.69%
FTSE 250 - Risers
Ophir Energy (OPHR) 466.50p +16.04%
easyJet (EZJ) 493.70p +7.00%
Ruspetro (RPO) 202.00p +6.48%
Kentz Corporation Ltd. (KENZ) 470.60p +5.92%
African Barrick Gold (ABG) 417.10p +5.73%
Fenner (FENR) 457.20p +4.98%
Lamprell (LAM) 353.40p +4.87%
Diploma (DPLM) 426.00p +4.49%
Bellway (BWY) 840.00p +3.70%
Taylor Wimpey (TW.) 52.35p +3.46%
FTSE 250 - Fallers
Home Retail Group (HOME) 119.80p -2.60%
Cable & Wireless Worldwide (CW.) 36.72p -2.08%
Amlin (AML) 333.90p -2.00%
JPMorgan Indian Inv Trust (JII) 357.00p -1.65%
Perform Group (PER) 300.00p -1.64%
Oxford Instruments (OXIG) 1,171.00p -1.26%
Aquarius Platinum Ltd. (AQP) 150.50p -1.12%
Tullett Prebon (TLPR) 349.50p -1.05%
Ocado Group (OCDO) 117.20p -0.93%
Dixons Retail (DXNS) 19.37p -0.92%
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