Date: Wednesday 30 May 2012
- Ex-div stocks, miners provide a drag
- Hopes over Chinese stimulus fade
- ECB rejects Spain's plan for Bankia
After rumours of additional Chinese stimulus measures were quashed yesterday, the FTSE 100 sank in early trading on Wednesday, with resource companies among the worst performers; ex-dividend stocks were also heavy fallers this morning.
China does not intend to introduce economic stimulus measures like it did when the financial crisis started, according to Chinese news agency Xinhua. Speculation of a massive stimulus plan had surfaced last week after Chinese Prime Minister Wen Jiabao said that his country would take the necessary steps towards policies that will support the economy.
"There was a hope from traders and spread bettors alike that a potential four trillion yuan package would be announced, however the latest news is likely to dent confidence further when people are looking for a gem of positivity in what is currently a fairly dark situation in Europe," said sales trader Matthew Nelson from SpreadEx.
In Eurozone news, the European Central Bank (ECB) has rejected Spain's funding plan for troubled lender Bankia. Madrid had apparently proposed injecting bonds into Bankia’s parent company BFA and then having it exchange those bonds for cash through the ECB’s three month refinancing window. This would have allowed Spain to avoid having to sell the debt directly in credit markets. However, according to the report, the ECB told the Spanish government that Bankia needed a capital injection and that the plan violated European Union financing policies.
Also dampening sentiment today was the news that the governor of the Bank of Spain, Miguel Fernández Ordóñez, has announced that he will resign on Sunday, June 10th, instead of waiting for his term to expire on July 12th.
Several stocks on the Footsie were falling after going ex-dividend - trading without the right for their latest dividend payouts - including National Grid, Capital Shopping Centres Group, Marks & Spencer and AMEC.
AMEC, the engineering and project management group, announced this morning that it has acquired a Brisbane-based consulting, engineering and technical services business to expand its Environment and Infrastructure service offering in Australia.
Mining groups Vedanta Resources, Evraz, Kazakhmys and ENRC were firmly out of favour as hopes of a stronger Chinese economy fade. Even Glencore was lower after revealing that its takeover of agricultural business Viterra has moved a step closer after Viterra passed a special resolution.
Natural gas giant BG Group fell after saying that it is to sell its stake in to gas-fired power generation plants in the Philippines as part of its planned release of $5bn of capital over the next two years.
Utility provider Severn Trent disappointed after pre-tax profits fell 38% in the year to the end of March, something the firm blamed on operational, infrastructure and employment costs.
Energy support services firm Cape jumped after announcing that a new Chief Executive will join the firm at the end of June. Joe Oatley will become Group Chief Executive and comes from Hamworthy, a global engineering business serving the oil and gas industry.
Food wholesaler Booker Group rose after saying it is to buy Makro UK, a subsidiary of the huge German retailer Metro, in a combined share and cash deal. Booker says the transaction will enable it to become the “UK's leading wholesaler to caterers, retailers and small and medium sized enterprises.”
Ex-dividend stocks were also trading lower early on; these included Britvic, Daily Mail & General Trust, Marston's, Cable & Wireless Communications and Intermediate Capital.
FTSE 100 - Risers
Man Group (EMG) 75.35p +1.48%
Barclays (BARC) 182.30p +0.72%
Diageo (DGE) 1,539.00p +0.16%
Morrison (Wm) Supermarkets (MRW) 273.70p +0.15%
International Power (IPR) 414.10p +0.02%
FTSE 100 - Fallers
National Grid (NG.) 653.50p -3.97%
Capital Shopping Centres Group (CSCG) 310.90p -3.95%
Fresnillo (FRES) 1,299.00p -3.64%
Amec (AMEC) 984.00p -3.05%
Marks & Spencer Group (MKS) 334.50p -3.04%
Vedanta Resources (VED) 965.00p -2.92%
Eurasian Natural Resources Corp. (ENRC) 452.40p -2.75%
CRH (CRH) 1,142.00p -2.31%
Rio Tinto (RIO) 2,856.50p -2.24%
Randgold Resources Ltd. (RRS) 5,115.00p -2.20%
FTSE 250 - Risers
Booker Group (BOK) 85.00p +7.46%
Cape (CIU) 244.00p +5.86%
Centamin (DI) (CEY) 64.20p +3.97%
Aquarius Platinum Ltd. (AQP) 78.15p +2.76%
Synergy Health (SYR) 810.00p +1.44%
Supergroup (SGP) 319.30p +1.11%
Domino Printing Sciences (DNO) 564.00p +0.71%
Rathbone Brothers (RAT) 1,219.00p +0.66%
Spirit Pub Company (SPRT) 51.25p +0.49%
Bellway (BWY) 679.00p +0.44%
FTSE 250 - Fallers
Cable & Wireless Communications (CWC) 28.96p -10.06%
Intermediate Capital Group (ICP) 251.90p -4.69%
Premier Farnell (PFL) 164.10p -3.41%
Diploma (DPLM) 428.60p -3.38%
Spectris (SXS) 1,648.00p -3.34%
Petropavlovsk (POG) 374.00p -3.28%
Ferrexpo (FXPO) 211.40p -3.25%
Ruspetro (RPO) 155.00p -3.06%
Kesa Electricals (KESA) 47.49p -3.04%
Heritage Oil (HOIL) 124.30p -3.04%
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