Date: Friday 22 Jun 2012
1630:Close London equities have finished the week on a down note, following the heavy selling seen last night on Wall Street. The country´s major banking groups however performed solidly today, brushing off yesterday´s credit ratings downgrade from Moody´s. Of note, reports that the Bank of England´s financial policy committee will lower the size of the liquidity buffers that it requires from banks. Eurozone periphery bond yields came slightly off the boil again today. On the top share index defensive stocks such as BT Group and Unilever led on the upside, along with gains in HSBC and Lloyds. On the negative side of the ledger, silver miner Fresnillo was the worst performer, along with Petrofac, with the latter falling on the back of lower energy prices. Wolseley was another unwanted stock today given its exposure to the slowing US economy. Carnival also came in at the bottom of the pile after revealing that it is being forced to lower prices to drum up business. FTSE 100 down 53 to 5,514.
1456: Spain´s Economics Minister has just dismissed reports that the country will impose losses on holders of junior bank debt as untrue. FTSE 100 down 45 to 5,522.
1446: The European Central Bank has announced an easing in its collateral rules, sending periphery Eurozone equity markets sharply higher, as well as the top share index. However, according to Bloomberg Spain may be considering imposing losses on holders of junior bank debt, contrary to reports which appeared earlier in the day, in the Spanish press, which seemed to point to the contrary. FTSE 100 down 35 to 34 to 5,532.
1352: UK stocks are holding to today´s trading range despite US equity futures having climbed slightly higher in the last couple of hours. Shares of the main lenders, HSBC, Barclays, Lloyds and RBS, on the other hand, have reversed course and brushed-off Moody´s ratings downgrades from last night. Of particular interest, Spanish daily El Mundo reports that the country´s Economics minister may make a formal request for aid today. As an aside, Bloomberg cites Goldman Sachs´s Jim O´Neill as having said that he would accept the post of Governor of the Bank of England if so asked. FTSE 100 down 44 to 5,523.
1106: Michael Page is leading fallers now on the FTSE 350 after the decision this morning by analysts at Credit Suisse to downgrade the shares to underperform from neutral.
1059: At its meeting this morning the Bank of England´s financial policy committee (FPC) is expected to announce a reduction of between 20 per cent and 30 per cent in banks´ liquidity buffers. That when the country´s four largest lenders are estimated to be holding between 650 billion to 700 billion pounds in liquidity. In the meantime weakness in the Footsie is now concentrated in the oil patch. That after Brent futures yesterday fell below the 90 dollar mark for the first time sine late 2010. Hence, the losses that are to be seen in shares of Petrofac, Tullow Oil and BP for example. As for Vedanta, according to India’s Business Standard the government will reject Vedanta’s offer to buy stakes in Hindustan Zinc and Bharat Aluminium. FTSE 100 down 59 to 5,507.
1012: Though most of the attention is focused on the banking sector following Moody's downgrades of 15 major financial institutions, it is resource stocks that are dragging the Footsie lower, with both energy stocks and miners under selling pressure. Of the few blue-chips making progress, the traditionally defensive sectors are well represented; household goods firm Unilever, supermarket chains Morrisons and Tesco, drugs firms Glaxo and Asta plus utility International Power are all defying the trend. FTSE 100 is down 53 at 5,513.
0845: London has opened lower after Moody's published its long-awaited review of the global banking sector which saw many major players get downgraded. Lloyds was among those to get the treatment, with its longer-term senior debt and deposit ratings lowered by one notch to A2 from A1, and the standalone credit assessment lowered by one notch to baa2 from baa1. The shares are up this morning, however, with Lloyds' Chief Executive Officer, António Horta-Osório, claiming that Moody's review had recognised 'the substantial momentum we have made in de-risking our balance sheet.' While the banks take Moody's decision in their stride - the market has been waiting for ages for the other shoe to drop - resource stocks are in the dog house again on fears of a slow-down in global activity. In the mid-cap space Aquarius Platinum is under the cosh once more, having already taken a pounding yesterday when it announced the mothballing of another mine in South Africa. FTSE 100 is down 44 at 5,523.
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