Date: Monday 11 Jun 2012
- Spain asks for 100bn euros for its banks
- Spanish bond yields still on the up
- Financials across Europe gain
The FTSE 100 was firmly in positive territory by Monday lunchtime, but the index was trading well off its intraday high of 5,532 as investors digested this weekend's request from Spain for a bailout for its troubled banks.
Spain, the fourth EU country to request a bailout, made a formal petition to the Eurogroup on Saturday for up to €100bn in aid to help recapitalise its banks.
Equity markets across Europe rocketed higher early on, though gains were pared in mid-morning trade, perhaps as the news failed to stop a rise in Spanish bond yields - the borrowing rate on a 10-year Spanish note was up 6.8 basis points at 6.284% by midday.
"The Spanish banking crisis along with the Greek elections was seen as a major threat in the Eurozone. With the Greek elections unlikely to be as straightforward, the timing of the bailout couldn’t be better for investor sentiment," said analyst Craig Erlam from Alpari.
However, Shavaz Dhalla, a trader from Spreadex, said that investors should still remain cautious: "headline trading is likely to return to the markets this week, which could potentially be partnered with volatility, as the focus moves from Spain back to Greece with the anticipated elections due in Greece this Sunday."
Also helping sentiment today was some economic data from China over the weekend. Both exports and imports outpaced forecasts in May, while industrial output increased by 9.6%, broadly in line with expectations. Fixed-asset investment however, increased by just 20% in the year-to-date, the smallest gains since 2001.
Financial stocks were tracking their European counterparts higher by midday, as the continent's banking industry celebrated Spain's request for aid. Barclays, Lloyds and RBS were among the highest risers, helped by Oriel Securities which kept buy ratings on all three stocks today. HSBC was also gaining, albeit by a lesser amount; Oriel reiterated a reduce recommendation on the shares this morning.
Engineering group GKN was a high riser after its Aerospace division was awarded a contract by US aircraft maker Boeing at the weekend to supply complex machined titanium and aluminium parts and assemblies for the horizontal stabiliser of the 787-9 Dreamliner.
Supermarket giant Tesco edged lower despite some in-line first-quarter figures. UK sales including VAT and petrol grew by 2.1% in the 13 weeks to May 26th, but like-for-like sales (excluding VAT and petrol) fell by 1.5%.
Joining Tesco in the red was a host of defensive stocks as investors fled towards 'riskier' assets. Utilities peers United Utilities, Centrica and National Grid were among the worst performers.
Aquarius Platinum disappointed after saying that its operations with its Marikana Pooling and Sharing Agreement in South Africa are being put on hold as a result of the ongoing low PGM (platinum group metals) basket price. "Trading conditions in the platinum industry are expected to remain difficult in the short to medium term and these conditions have rendered the operations at the P&SA2 uneconomic," the company said.
Rental equipment firm Ashtead was on the rise ahead of its full-year results next week, with Jefferies saying this morning that it sees upside risk to current-year forecasts. The broker retained its buy recommendation for the stock.
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 29.08p +3.82%
CRH (CRH) 1,154.00p +3.68%
Schroders (SDR) 1,269.00p +3.17%
Schroders (Non-Voting) (SDRC) 1,005.00p +2.97%
GKN (GKN) 187.10p +2.92%
International Consolidated Airlines Group SA (CDI) (IAG) 150.10p +2.74%
Wolseley (WOS) 2,270.00p +2.67%
Vedanta Resources (VED) 960.00p +2.62%
Polymetal International (POLY) 834.50p +2.46%
Antofagasta (ANTO) 1,086.00p +2.45%
FTSE 100 - Fallers
Man Group (EMG) 78.70p -1.44%
United Utilities Group (UU.) 674.00p -0.96%
Hammerson (HMSO) 411.50p -0.96%
Tesco (TSCO) 300.90p -0.63%
National Grid (NG.) 658.50p -0.53%
Vodafone Group (VOD) 170.70p -0.47%
Land Securities Group (LAND) 714.00p -0.42%
British Land Co (BLND) 486.50p -0.39%
Capita (CPI) 647.00p -0.38%
Capital Shopping Centres Group (CSCG) 311.60p -0.38%
FTSE 250 - Risers
Talvivaara Mining Company (TALV) 159.10p +5.78%
Spirent Communications (SPT) 164.60p +3.98%
JD Sports Fashion (JD.) 692.00p +3.44%
Ocado Group (OCDO) 98.15p +3.42%
Filtrona PLC (FLTR) 462.10p +3.26%
Renishaw (RSW) 1,499.00p +3.17%
Redrow (RDW) 115.00p +3.14%
Northgate (NTG) 174.00p +2.96%
Genus (GNS) 1,277.00p +2.82%
Dixons Retail (DXNS) 13.02p +2.76%
FTSE 250 - Fallers
Supergroup (SGP) 285.90p -3.05%
Aquarius Platinum Ltd. (AQP) 71.35p -2.93%
Savills (SVS) 318.70p -2.27%
Centamin (DI) (CEY) 69.85p -1.69%
Premier Farnell (PFL) 158.30p -1.68%
Spirit Pub Company (SPRT) 48.00p -1.54%
Synergy Health (SYR) 874.50p -1.41%
African Barrick Gold (ABG) 393.00p -1.31%
Big Yellow Group (BYG) 282.00p -1.02%
Shaftesbury (SHB) 504.50p -0.98%
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