Date: Friday 24 Aug 2012
- ECB considering target bands for yields
- Merkel wants Greece to stay in Eurozone
- UK Q2 GDP revised up.
The Footsie rallied in late trading to finish flat on Friday after rumours of a European plan for bonds yields.
According to Reuters, the European Central Bank (ECB) is looking at setting yield band targets under its new bond-buying programme. The move would help the ECB to shield its strategy and stop speculators trying to cash in. "That is one of the options that is currently being discussed in the working groups and will then be handled by the Governing Council,” an unnamed Eurozone official told the news agency.
Also helping equities in the final stretch was a report in the Wall Street Journal regarding the content of a letter from Federal Reserve President, Ben S.Bernanke, to a US congressman. In the same chairman Bernanke explains that there is scope for further "Fed action".
Nevertheless, the tone on equity markets was relatively subdued for most of the session with stocks trading firmly in the red from the off. Speaking this afternoon, market strategist Ishaq Siddiqi from ETX Capital said: “European financial markets have drifted lower through the course of the session, but are closing off the worse levels of the day, thanks to a decent session on Wall Street.”
However, Siddiqi highlighted today’s solid durable goods data Stateside which added to the “diminishing expectations for stimulus measures which were soured by Fed member James Bullard yesterday.”
In the Eurozone, German Chancellor Angela Merkel said this afternoon that she wanted to keep Greece in the single-currency region and added that Athens “will do what it takes to solve the problem.” However, there was no mention regarding Greek Prime Minister Antonis Samaras’s plea for a two-year extension to meet its bailout terms.
The state of Britain's economy in the second quarter was bad but not as bad as initially feared, revised figures for GDP show. Having initially estimated that GDP fell 0.7% in the second quarter, the Office for National Statistics (ONS) has revised its numbers which now indicate a 0.5% quarterly decline in GDP, bang in line with market expectations.
Shares in Marks & Spencer jumped on Friday afternoon on rumours that private equity titan CVC Capital Partners is considering a takeover offer for the High Street group. It is thought that CVC is looking at an bid and has approached executives both inside and outside the firm “about a possible management role under private equity control,” according to Bloombergwhich has spoken to unnamed sources close the matter.
Mining stocks were heavy fallers with Kazakhmys, Rio Tinto, ENRC, Antofagasta, Anglo American, Vedanta, BHP Billiton and Randgold falling sharply.
Anglo American dropped after Jefferies downgraded the stock this morning from 'buy' to 'hold' despite yesterday's news that it had resolved a 10-month dispute with Codelco relating to assets in Chile. "While this outcome should be a modest positive for Anglo, we are increasingly concerned about the fundamental outlook for the company," the broker said.
Financials were also out favour with fund manager Ashmore among the worst performers after Citigroup lowered its rating to 'sell'.
Global banking group HSBC was under the weather on rumours that it is in talks about a settlement concerning the allegations of laundering funds of sanctioned countries such as Iran and Sudan.
Meanwhile, utilities stocks were benefitting from as risk appetite was scaled back. National Grid gained after Nomura said that the stock remains a top pick in the European utilities sector. It is a "compelling growth story [with] rising visibility".
Work-wear and wash-room facilities provider Berendsen rose after increasing profitability in the first half of 2012, despite a small dip in revenues.
Logistics firm Stobart fell after saying its short-term performance in transport is lower than market expectations as the current recessionary climate continues to hurt the sector.
FTSE 100 - Risers
Marks & Spencer Group (MKS) 371.70p +4.26%
Smith & Nephew (SN.) 668.00p +1.52%
Reckitt Benckiser Group (RB.) 3,615.00p +1.49%
Standard Chartered (STAN) 1,413.00p +1.33%
Centrica (CNA) 327.40p +1.30%
Unilever (ULVR) 2,273.00p +1.16%
Aggreko (AGK) 2,284.00p +1.11%
CRH (CRH) 1,131.00p +1.07%
Associated British Foods (ABF) 1,329.00p +1.06%
Kingfisher (KGF) 285.70p +0.99%
FTSE 100 - Fallers
Ashmore Group (ASHM) 331.50p -4.33%
Eurasian Natural Resources Corp. (ENRC) 338.90p -3.58%
Evraz (EVR) 246.80p -3.06%
Kazakhmys (KAZ) 660.50p -2.94%
Anglo American (AAL) 1,885.00p -2.91%
Weir Group (WEIR) 1,692.00p -2.76%
Royal Bank of Scotland Group (RBS) 222.90p -2.19%
Barclays (BARC) 187.20p -1.99%
Tullow Oil (TLW) 1,370.00p -1.86%
GKN (GKN) 220.10p -1.70%
FTSE 250 - Risers
Dunelm Group (DNLM) 595.50p +6.43%
Computacenter (CCC) 390.00p +4.81%
Perform Group (PER) 380.00p +3.49%
QinetiQ Group (QQ.) 173.90p +3.39%
Phoenix Group Holdings (DI) (PHNX) 498.30p +2.74%
Brown (N.) Group (BWNG) 274.40p +2.54%
Premier Farnell (PFL) 189.00p +2.33%
Millennium & Copthorne Hotels (MLC) 488.10p +2.28%
Imagination Technologies Group (IMG) 566.50p +2.16%
Berendsen (BRSN) 524.50p +2.04%
FTSE 250 - Fallers
Ferrexpo (FXPO) 183.00p -4.59%
Salamander Energy (SMDR) 194.60p -4.47%
Moneysupermarket.com Group (MONY) 131.00p -4.38%
Man Group (EMG) 75.75p -4.17%
Hays (HAS) 77.40p -4.03%
Ocado Group (OCDO) 62.80p -3.53%
Stobart Group Ltd. (STOB) 114.90p -3.53%
Aquarius Platinum Ltd. (AQP) 39.76p -3.26%
Domino Printing Sciences (DNO) 566.00p -3.25%
Bodycote (BOY) 343.60p -3.13%
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