Market overview: FTSE closes down 4 at 5,447

Date: Tuesday 26 Jun 2012

1630: Today Chancellor George Osborne announced the government will not go ahead with a three pence-a-litre rise in fuel duty due in August, telling MPs that it would now be frozen for the rest of the year. Meanwhile, the government's finances took a hit in May as a drop in income tax receipts and a rise in spending pushed public borrowing higher. Net borrowing, excluding the temporary effects of financial interventions, hit £17.9bn, up from £15.2bn last May, according to the ONS. Elsewhere, analysts said they were confident that more quantitative easing was on the way in July after BofE policy makers gave downbeat evidence to MPs this morning. Governor Mervyn King told the Treasury Select Committee that the outlook for the UK economy had worsened recently, driven by the crisis gripping the eurozone. The FTSE 100 closed down four points to 5,447.

1620: Shares seem to be dipping back into the red on renewed remarks out of German authorities. Thus, the ECB´s Jens Weidmann is being cited as having said that there is no end in sight for the Eurozone crisis. There is also speculation regarding a possible downgrade of Spain´s credit rating to junk status by Moody´s. Back in the equity space, shares of British Sky Broadcasting are outperforming. That may be linked to reports in The Wall Street Journal to the effect that News Corp. may separate its entertainment and publishing units. In turn, some may hope that this would influence the results of Ofcom´s investigation. FTSE 100 down 10 to 5,441.

1521: The FTSE 100 is up two points at 5,452, having pared earlier gains on the back of mixed economic data from the US. The SandP/Case-Shiller index of home prices fell by 1.9 per cent year-on-year in April, the slowest decline in over a year. Analysts were expecting a greater drop of 2.5 per cent. However, consumer confidence fell to a five-month low this month, according to the Conference Board, from 64.4 to 62. Analysts were expecting a smaller decline to 63.

1411: London equities continue to flat-line ahead of the release of further economic data this afternoon Stateside, and as investors look for greater clarity regarding the situation in the Eurozone. Also worth mentioning, Citi´s William Buiter is again being cited as forecasting sovereign bail-outs for Spain and Italy, perhaps even quite soon. Glencore International and Xstrata, who are seeking to complete a merger next quarter, are considering changing proposed retention payments for Xstrata executives that have drawn the ire of investors, Bloomberg reports. Stagecoach is the best performer at the moment on the FTSE 350; the company today announced a 10 per cent dividend increase. FTSE 100 up 12 to 5,463.

1122: Speaking before parliament´s Treasury Committee this morning Bank of England Governor Mervyn King has said that, "in the last six weeks... I am very struck by how much has changed since we produced our May Inflation Report. I am pessimistic (…)." More tellingly, he added that we are still not half way through the current financial crisis. Meantime, the UK´s public sector net borrowing requirement rose to 17.9bn pounds in May, well above the 14.8bn expected by the consensus, as the recession weighed on tax revenues. Petra Diamonds and Carpetright are leading gains on the FTSE 350 now; the latter after announcing that its fiscal year revenue fell by 3.1 per cent to 471.5m pounds. Acting as a backdrop, Spain´s Economics Minister has reiterated his country´s call for a banking union. FTSE 100 up by 6 to 5,456.

1014: The Footsie has dropped into the red after a bright start and is now trading seven points lower at 5,444 with banks extending losses after Spain's debt auctions of three- and six-month bills were met with weaker demand than the previous ones. RBS is out of favour on the back of technical issues at Natwest over the last few days. Meanwhile, banking peers Barclays and Lloyds are also down, tracking their European counterparts lower after Moody's downgraded 28 Spanish banks.

0845: London stocks have begun the day slightly higher, following yesterday´s losses. That ahead of this morning´s public debt auctions in Spain and Italy and public sector net borrowing figures here in the UK. Ahead of those events chemical manufacturer Croda is leading gains on the top share index following positive comments from analysts at JP Morgan. Shire is also benefitting from upgrades to buy from SocGen and Berenger. On the downside, ARM Holdings may be getting dragged down by all the positive news flow surrounding Samsung. Ocado is leading losses on the FTSE 350 after unveiling a 12% first half sales increase; Oriel Securities and Shore Capital have both reiterated their sell recommendations on the stock. FTSE 100 up 17 to 5,468.

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