Date: Friday 10 Aug 2012
After trading in the red for most of the day Footsie put in a late spurt in the last half hour to claw back most of the day's losses.
Shares, and in particular miners, had been on the back foot after some disappointing trade data from China.
Chinese exports grew 1.0% from a year earlier in July, which is not the sort of growth the market has become used to; economists had plumped for a growth rate of 8.6%.
Imports, meanwhile, grew less expected. The year-on-year rise was 4.7% versus market expectations of a 7.2% rise.
The trade surplus narrowed from $31.7bn in June to $25.1bn in July.
The mining sector actually ended the day in positive territory, however, helping the top share index to close virtually unchanged.
UK producer prices data gave sentiment a boost. According to the Office for National Statistics (ONS), the output price index for home sales of manufactured products rose to 1.7% in the year to July, its slowest rate since October 2009.
The increase was mainly the result of rising oil and food materials prices.
If retailers opt to pass on the reduction to consumers, this could bring about a decline in the official rate of inflation.
Scandal-hit bank Barclays was wanted after it announced last night it is to appoint City veteran Sir David Walker as its new Chairman. Walker will join the board on September 1st before replacing the outgoing Chairman, Marcus Agius, in November.
Walker has served as Chairman of Morgan Stanley International and Deputy Chairman of Lloyds Bank, but also has experience in government as Assistant Secretary to the Treasury and Executive Director of the Bank of England. His time as a regulator will be crucial for Barclays to rebuild trust after the agonies of the LIBOR debacle which saw the departure of the ultra-high profile Chief Executive, Bob Diamond.
Sector peer Standard Chartered, embroiled in an entirely different scandal to Barclays, was under a little pressure as ratings agency Fitch is making noises about reviewing the bank's AA- credit rating, as it fears the investigation by a New York regulator could damage the bank's reputation.
The Fitch analysts expect to have more clarity on the possible outcomes after the hearing scheduled for August 15th.
"Standard Chartered has informed Fitch that deposit outflows have been limited so far and that its USD [US dollar] liquidity has remained strong. The bank has substantial sources of USD liquidity outside its New York branch,” Fitch said.
Elsewhere in the financial sector, insurance titan Prudential is, not for the first time, thanking its Asian operations for a solid first-half performance.
Although the figures failed to wow the market - IFRS operating profit was up 13% to £1,162m from £1,028m a year earlier, beating broker Panmure Gordon's forecast for IFRS operating profit of £1,095m - performance in Asia was a bright spot, with IFRS operating profit up 21% year-on-year. IFRS stands for International Financial Reporting Standards. Insurance companies also present results using the European Embedded Value (EEV) guidelines, and on this basis operating profit came in at £2,109m, versus £2,147m the year before. Panmure Gordon had forecast headline European Embedded Value operating profit of £2,160m, up 1% on the first half of 2011.
Outsourcing firm Bunzl was the worst performing blue-chip stock after UBS recommended selling the stock.
Flybe, Europe's largest regional airline, has warned that is has experienced another 'very challenging' year, with the forward booking visibility remaining 'extremely limited'. Looking ahead, the firm expects total year-on-year growth for the year ended March 31st to be between flat and 2.0%, below its previous expectations. The stock has lost altitude rapidly, dragging easyJet lower with it.
Another stock going down was UK Coal after the debt-laden firm announced a restructuring. The restructuring will see the pension fund defer contributions for two years while each of the firm’s nine mines is hived off into a separate business, avoiding one mine failure from bringing down the rest of the group (which is essentially what is happening now).
Collectibles dealer Stanley Gibbons left its stamp on the market after reporting rising interim profits and forecasting growth for the rest of the year ‘irrespective of economic conditions’ as it continues to lead the way in sourcing rare stamps.
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