Date: Wednesday 22 Aug 2012
- Japan swings to massive trade deficit
- Greece to ask officials for more time
- BHP and the miners fall steeply early on
Following a strong rise for mining stocks on Tuesday, the sector was providing a drag in London this morning after gloomy economic data from Japan dampened sentiment and scaled back risk appetite.
"Weaker equity markets across the board in Asia due to disappointing trade data out of Japan and renewed concerns about sharply falling corporate profits in China is also taking a toll on European equity markets this morning with most major indices handing back yesterday’s gains putting them firmly back into the old trading ranges seen during past few days," said analyst Markus Huber from ETX Capital.
Japan swung to a trade deficit of 517.4bn yen (£4.14bn) in July, from a surplus of 60.3bn yen in July, on the back of slowing demand in Asia and the Eurozone crisis. Analysts were expecting a deficit of 270bn yen.
Meanwhile, eyes will be kept on Greece today as Prime Minister Antonis Samaras speaks with Eurozone officials this week to renegotiate the terms of the bailout. He is expected to request a two-year extension to Greece's fiscal-adjustment programme.
“All we want is a bit of 'air to breathe' to get the economy running and to increase state income. More time does not automatically mean more money," Samaras said.
Markets will also be focusing on the US later today as the minutes of the latest Federal Open Market Committee (FOMC) are due for release.
Metals and mining stocks dropped on Wednesday morning after Japanese trade data disappointed, weighed on the outlook for demand. BHP Billiton fell after saying that weakness in commodity markets and industry-wide cost pressures resulted in earnings declining in the first half. The group also decided against spending up to $30bn on a uranium and copper mine extension in South Australia.
Evraz, Fresnillo, Kazakhmys and Rio Tinto were also heavy fallers, while ENRC was lower after going ex-dividend and being downgraded by Deutsche Bank to 'neutral'.
FTSE 100 counterparts CRH, InterContinental Hotels, Prudential and Standard Life also went ex-div today.
B&Q owner Kingfisher was a heavy faller after Deutsche Bank lowered its recommendation for the stock to 'hold' and cut its target price from 340p to 315p.
Steam trap and pump maker company Spirax Sarco was out of favour after reporting a decline in first-half pre-tax profits following higher material costs, the impact of lower volumes in its main European factories and the economic downturn in Latin America.
Bus and rail group Stagecoach fell after revealing a decline in like-for-like revenue at its UK bus operations as all of its other divisions grew in the twelve weeks ended July 22nd.
FTSE 100 - Risers
Tullow Oil (TLW) 1,396.00p +1.53%
Gemfields (GEM) 37.00p +0.68%
United Utilities Group (UU.) 718.00p +0.21%
Diageo (DGE) 1,686.50p +0.15%
Pennon Group (PNN) 740.50p +0.07%
Centrica (CNA) 326.20p +0.06%
FTSE 100 - Fallers
Fresnillo (FRES) 1,505.00p -4.81%
Evraz (EVR) 254.60p -4.21%
Eurasian Natural Resources Corp. (ENRC) 355.90p -3.86%
Kingfisher (KGF) 282.90p -3.78%
Kazakhmys (KAZ) 708.00p -3.67%
Vedanta Resources (VED) 937.50p -3.00%
CRH (CRH) 1,133.00p -2.66%
IMI (IMI) 888.00p -2.63%
Randgold Resources Ltd. (RRS) 6,150.00p -2.61%
Anglo American (AAL) 1,932.00p -2.57%
FTSE 250 - Risers
Barr (A.G.) (BAG) 455.00p +2.22%
Shanks Group (SKS) 86.25p +1.41%
Gem Diamonds Ltd. (DI) (GEMD) 190.40p +1.38%
Hochschild Mining (HOC) 441.00p +1.15%
Chemring Group (CHG) 382.60p +0.90%
Big Yellow Group (BYG) 305.20p +0.79%
Phoenix Group Holdings (DI) (PHNX) 496.20p +0.77%
Kentz Corporation Ltd. (KENZ) 352.00p +0.57%
Carillion (CLLN) 269.30p +0.56%
Interserve (IRV) 351.90p +0.54%
FTSE 250 - Fallers
Homeserve (HSV) 203.60p -11.98%
Spirax-Sarco Engineering (SPX) 1,924.00p -6.60%
Aquarius Platinum Ltd. (AQP) 38.14p -3.93%
Heritage Oil (HOIL) 198.00p -3.41%
Man Group (EMG) 77.70p -3.30%
Yule Catto & Co (YULC) 156.00p -3.29%
Henderson Group (HGG) 108.90p -3.03%
Brewin Dolphin Holdings (BRW) 150.70p -2.77%
St James's Place (STJ) 351.60p -2.60%
Bwin.party Digital Entertainment (BPTY) 97.45p -2.50%
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