Date: Monday 26 Mar 2012
- German confidence continues to improve
- Merkel in favour of boosting firewall
- Bernanke hints at continued support for economy
London’s blue chip index finished close to its intraday highs on Monday helped by positive news flow from Europe and remarks from the Federal Reserve. Stocks were rebounding from last week when the Footsie lost nearly two per cent on the back of weak global manufacturing data.
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.
Meanwhile, it seems as if German Chancellor Angela Merkel is now in favour of running the two European rescue funds, the EFSF and ESM, in parallel. This is expected to translate into an effective boost in the amount of resources available to stave off tensions in debt markets.
US stocks started strongly on Wall Street after Fed Chairman Ben Bernanke said that improvements in the jobless rate will require “a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.”
A late statement by Tullow Oil meant that the oil and gas giant overtook Aberdeen Asset Management to secure the top spot on the Footsie risers list. It seems as if Tullow’s exploration campaign in Kenya has got off to a pretty good start, with its first exploration well encountering more than 20 metres of net oil pay. “To make a good oil discovery in our first well is beyond our expectations and bodes well for the material programme ahead of us,” said Tullow’s Exploration Director Angus McCoss. Shares rose 6.6%.
Fund manager Aberdeen Asset Management gained 4.4% after assets under management at the end of February stood at £184.4bn, up from £173.9bn at the end of 2011, as investors continued to return to equity markets.
Technology firm Smiths Group was also a high riser after bagging a €100m contract to equip the New Doha International Airport (NDIA) in Qatar, the biggest single-airport contract that it has ever been awarded.
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, Kazakhmys, Xstrata and ENRC among the heaviest fallers of the day.
Shares in the African energy firm Ophir leapt 18.9% 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 7.5% after saying that its financial performance in the first half of the year would exceed guidance it gave in January.
In other news, the administrators have been called in to perform the last rites on GAME Group, the video games retailer which crashed and burned in March. The board of GAME said the decision to pull the plug was taken "after careful consideration and ceaseless interrogation of every possible alternative."
FTSE 100 - Risers
Tullow Oil (TLW) 1,570.00p +6.59%
Aberdeen Asset Management (ADN) 260.80p +4.36%
Smiths Group (SMIN) 1,049.00p +2.84%
Croda International (CRDA) 2,156.00p +2.81%
SSE (SSE) 1,348.00p +2.74%
Petrofac Ltd. (PFC) 1,719.00p +2.69%
International Power (IPR) 382.40p +2.58%
Randgold Resources Ltd. (RRS) 5,780.00p +2.30%
Burberry Group (BRBY) 1,547.00p +2.25%
Wolseley (WOS) 2,519.00p +2.23%
FTSE 100 - Fallers
Polymetal International (POLY) 935.00p -2.65%
ICAP (IAP) 408.90p -2.13%
Resolution Ltd. (RSL) 274.90p -1.65%
Weir Group (WEIR) 1,787.00p -1.49%
Lloyds Banking Group (LLOY) 35.54p -1.21%
Kazakhmys (KAZ) 925.00p -1.12%
Royal Bank of Scotland Group (RBS) 27.75p -1.00%
Xstrata (XTA) 1,095.50p -0.90%
Eurasian Natural Resources Corp. (ENRC) 626.50p -0.87%
BT Group (BT.A) 230.10p -0.86%
FTSE 250 - Risers
Ophir Energy (OPHR) 477.60p +18.81%
African Barrick Gold (ABG) 424.00p +7.48%
easyJet (EZJ) 495.80p +7.46%
Ruspetro (RPO) 203.70p +7.38%
Kentz Corporation Ltd. (KENZ) 474.80p +6.86%
Bellway (BWY) 859.50p +6.11%
Afren (AFR) 131.00p +5.65%
Carpetright (CPR) 697.50p +5.12%
New World Resources A Shares (NWR) 453.80p +4.90%
Diploma (DPLM) 426.50p +4.61%
FTSE 250 - Fallers
Northgate (NTG) 215.10p -2.23%
Cable & Wireless Worldwide (CW.) 36.75p -2.00%
BH Global Ltd. USD Shares (BHGU) 11.85 -1.99%
Wetherspoon (J.D.) (JDW) 414.10p -1.40%
JPMorgan Indian Inv Trust (JII) 358.00p -1.38%
PayPoint (PAY) 596.50p -1.32%
Home Retail Group (HOME) 121.60p -1.14%
Amlin (AML) 337.30p -1.00%
Ocado Group (OCDO) 117.20p -0.93%
Tullett Prebon (TLPR) 350.00p -0.91%
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