Date: Wednesday 27 Jun 2012
- US data fuels buying late on
- EU summit in focus tomorrow
- Xstrata appeases shareholders, Barclays rises despite ‘market manipulation’
London’s blue chip index surged in afternoon trade on Wednesday after some upbeat housing data from the US lifted sentiment ahead of the crucial two-day EU summit which begins in Brussels tomorrow.
The National Association of Realtors revealed that its pending US home sales index for the month of May increased by 5.8% on a month-by-month basis, better than the 1% rise expected. The news sent Wall Street benchmarks higher after the opening bell in New York.
Economic data closer to home was also cheery, with the Queen's Diamond Jubilee weekend pushing retail sales up sharply in June, according to new figures. The CBI’s latest Distributive Trades Survey, covering the first two weeks in June, showed 58% of retailers reported that sales volumes were up on a year ago, while 17% said sales had fallen.
As for the EU summit, leaders are expected to discuss specific steps towards a cross-border banking union, closer fiscal integration and the possibility of a debt redemption fund, however expectations of any firm solutions or decisions are very low. “With expectations so low for a change, we may just see a surprise in the markets. There has been little movement in equities in particular in the first half of the week, so I expect to see a big reaction one way or another,” said analyst Craig Erlam from Alpari.
Speculation of additional stimulus measures in China lifted sentiment this morning after the China Securities Journal said that the world's largest economy could introduce "more proactive" policies.
Steel giant Evraz was suffering heavy losses after German peer Salzgitter gave a gloomy outlook for the industry, saying that the Eurozone economy has deteriorated and steel processors and stockholding steel traders are expecting business to “stagnate”. “Breakeven can no longer be anticipated for the Salzgitter Group’s Steel Division this year”, the group announced.
After an initial fall, Xstrata rallied late on after the company bowed into pressure from angry investors and announced that retention awards for management as part of its merger with Glencore will paid in shares instead of cash and will be subject to their future performances. “These amendments now allow shareholders to focus on the strategic rationale for the merger, which the independent non-executive directors continue to support,” said Chairman Sir John Bond. As for Glencore, the stock finished with mild losses.
Banking stocks were making gains today with Lloyds, RBS, Standard Chartered and Barclays putting in a good performance. Barclays was higher despite the news that is to pay a £290m fine following an investigation by UK and US regulators into manipulation of inter-bank lending rates. Meanwhile, emerging markets-focused lender Standard Chartered rose after saying that the robust income growth seen in the first quarter continued into the second, although FX movements are still limiting the increase.
British Sky Broadcasting was on the rise after News Corp said that it was considering splitting the company into two; there were rumours that Rupert Murdoch could again look into buying the satellite broadcaster.
ICAP and Next were heavy fallers after going ex-dividend - from today, investors will not be able to get their hands on the companies' latest dividend payouts.
Specialist chemicals maker Yule Catto tanked after saying that the challenging trading conditions outlined in its May update have continued through the rest of the first half. Demand at its Europe and North America business segment, remains subdued, as it battles against deteriorating business confidence as economic uncertainty continues.
Online gaming company bwin.party fell after saying a potential buyer for its Ongame poker network has pulled out of discussions.
FTSE 100 - Risers
CRH (CRH) 1,132.00p +4.24%
BG Group (BG.) 1,256.00p +3.84%
Wolseley (WOS) 2,294.00p +3.66%
Lloyds Banking Group (LLOY) 31.16p +3.52%
Amec (AMEC) 964.50p +3.38%
ITV (ITV) 75.50p +3.35%
Aberdeen Asset Management (ADN) 257.70p +3.12%
Standard Chartered (STAN) 1,375.00p +3.07%
Weir Group (WEIR) 1,457.00p +3.04%
Tullow Oil (TLW) 1,437.00p +3.01%
FTSE 100 - Fallers
ICAP (IAP) 345.50p -3.95%
Aggreko (AGK) 1,961.00p -3.30%
Evraz (EVR) 248.90p -2.89%
Polymetal International (POLY) 907.50p -2.52%
Resolution Ltd. (RSL) 190.30p -1.76%
Tate & Lyle (TATE) 634.50p -1.70%
Next (NXT) 3,142.00p -1.66%
Glencore International (GLEN) 298.30p -1.45%
Old Mutual (OML) 149.60p -1.12%
Eurasian Natural Resources Corp. (ENRC) 396.40p -0.90%
FTSE 250 - Risers
Shanks Group (SKS) 79.60p +5.01%
New World Resources A Shares (NWR) 309.30p +4.99%
Bank of Georgia Holdings (BGEO) 1,054.00p +4.05%
Euromoney Institutional Investor (ERM) 743.00p +3.99%
Morgan Crucible Co (MGCR) 274.60p +3.82%
Micro Focus International (MCRO) 529.50p +3.82%
Dixons Retail (DXNS) 17.84p +3.48%
Phoenix Group Holdings (DI) (PHNX) 475.70p +3.41%
WH Smith (SMWH) 534.00p +3.29%
Hikma Pharmaceuticals (HIK) 651.50p +3.25%
FTSE 250 - Fallers
Yule Catto & Co (YULC) 138.00p -21.99%
Homeserve (HSV) 150.90p -5.57%
SDL (SDL) 644.00p -4.10%
Brown (N.) Group (BWNG) 241.60p -4.05%
Elementis (ELM) 188.00p -3.24%
KCOM Group (KCOM) 70.25p -3.04%
Bwin.party Digital Entertainment (BPTY) 116.10p -2.76%
Ophir Energy (OPHR) 563.50p -2.42%
Carpetright (CPR) 670.00p -2.33%
Petropavlovsk (POG) 447.00p -2.27%
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