Date: Thursday 17 May 2012
LONDON (ShareCast) - 1630: Close Losses were halved by the close in London but the Footsie still finished firmly in the red as the uncertain outlook for Europe was met with some disappointing manufacturing data (Philly Fed) from the US. Also weighing on sentiment were rumours that Moodys could be downgrading the credit rating of Spanish banks later on today, a few days after it cut the ratings of 26 of their Italian counterparts. Unsurprisingly, banks in London were among the worst performers today on worries over the Eurozone, with Barclays, RBS, Lloyds and Standard Chartered suffering heavy losses. IAG was out of favour on concerns over the Spanish economy and one of its major shareholders, Bankia. The FTSE 100 finished down 67 at 5,338.
1531: The FTSE 100 is off its lowest levels of the day but still down over one per cent, trading 63 points lower at 5,342. Markets across Europe are registering similar losses as concerns over Greek contagion continue to make investors nervous. In London, miners are putting in a mixed performance. Randgold is up over three per cent as gold prices recover after a recent sell-off; Antofagasta and Fresnillo are also making gains. However, Vedanta Resources is among the worst performers after full-year revenue came in slightly below forecasts.
1442: The Footsie is trading 62 points lower at 5,344 after a poor start on Wall Street. US initial weekly jobless claims were unchanged last week at 370,000, in line with consensus estimates, after the previous weeks reading was revised up by 2,000. The little-changed reading is positive though, as steady figures below 400,000 generally indicate an improving labour market. In London, just ten stocks are in positive territory, with ICAP leading the way after a UBS upgrade (from sell to neutral). IAG is down 5%, leading the fallers, as major shareholder Bankia (the troubled Spanish lender which owns a 12.05 per cent interest in the airline) is taking a battering on the IBEX. Although denied by the bank, there were rumours that customers have withdrawn more than one billion euros from deposits since it was part-nationalise last week.
1143: After a mildly softer opening Footsie has steadily declined throughout the morning, in contrast to the mid-cap index, which is in positive territory on the back of positive reactions to updates from TalkTalk Telecom, Cookson, Restaurant Group, Premier Oil, Marston's, Amlin and Salamander Energy. Banks are taking a real bashing as the increasing number of financial big-wigs warning of the dangers of Greece leaving the Eurozone only makes such a departure seem more inevitable. International Monetary Fund (IMF) Managing Director Christine Lagarde insists that Greece needs to continue to comply with the agreements it made to receive the bailout package, while warning that its exit could be an extremely costly process that the IMF needs to be prepared to face. Her comments follow hot on the heels of comments from James Bullard, the president of the St Louis Federal Reserve Bank, about the devastating effects that a break-up of the Eurozone would have on the US economy. FTSE 100 is down 62 at 5,343.
1029: The FTSE 100 is trading 41 points lower at 5,365 with banks and miners providing a drag as investors flee away from 'riskier' assets. Jefferies this morning reduced its target prices for miners under its coverage by around a tenth on average as macroeconomic concerns have increased in recent weeks, which could be having some downward pressure on such stocks as Anglo American, Vedanta and Xstrata. Nevertheless, the broker did say that it sees the recent underperformance in the sector as a good buying opportunity, as it believes that mining equities are 'already discounting an earnings outlook well below consensus expectations'.
0942: Greece's future in the Eurozone is very much on investors' minds, sapping demand for shares - especially banks. The minutes from the latest US Federal Reserve policy-setting meeting were published last night and members expressed concern over the threats from the heightened tension in European debt markets. Copper prices have recovered in London, helping Chilean copper miner Antofagasta outperform the mining sector, though it is still lower after reporting sharply improved first quarter earnings this morning. Diversified mining group Vedanta Resources is the worst performing blue-chip as full-year revenue came in slightly below forecasts. FTSE 100 is down 31 at 5,375.
0841: Footsie has opened on the back foot with trading updates from index constituents Aviva and Vedanta getting a lukewarm reception. In the mid-cap section, TalkTalk Telecom is buzzing after announcing headline earnings grew by a fifth in the year to the end of March. FTSE 100 is down 18 at 5,387.