Date: Wednesday 20 Jun 2012
- Market Movers
- techMARK 2,004.25 +0.85%
- FTSE 100 5,622.29 +0.64%
- FTSE 250 11,022.81 +1.40%
LONDON (ShareCast) - -Greek forms new coalition government
-MPC divided on more QE
-Markets await the Fed decision later today
News of the formation of a Greek coalition and hopes of further stimulus measures in the UK and the US gave stocks a lift on Wednesday afternoon.
New Democracy leader Antonis Samaras was sworn in as Greece's new Prime Minister today. After winning Sunday's elections and meeting with other parties, Samarias met with President Karolos Papoulias at the presidential palace to announce the composition of the coalition government with the support of Pasok and Democratic Left. Pasok leader Evangelos Venizelos pointed to the upcoming European Summit as the place to debate the renegotiation of the Greek bailout conditions.
Minutes from the latest Monetary Policy Committee (MPC) meeting in the UK were released this morning, showing that Junes vote to leave the asset purchase programme unchanged was a contentious issue for policy makers, who were split five against four in maintaining the status quo. The previous month the MPC had voted seven-to-one in favour of leaving the QE pot at £325bn.
"Most members judged that some further economic stimulus was either warranted immediately or would probably become warranted in order to meet the inflation target," the minutes said.
Meanwhile, investors await the outcome of the latest two-day meeting of the US Federal Open Market Committee (FOMC). Markets are hoping that members will vote on further easing measures in light of recent mixed economic data and Eurozone concerns.
The latest Group of 20 (G20) meeting in Mexico over the last few days saw leaders promise to do what they can to support global growth without actually outlining any of the specific steps they plan to take. However, European officials promised to take all necessary policy measures' to combat the current sovereign debt crisis.
FTSE 100: Sage provides a lift after acquisition
Accountancy software behemoth Sage Group finished nearly 6% higher after acquiring a majority interest in Folhamatic Group, a provider of accounting,tax and payroll and regulatory content software in Brazil, for 125m pounds. Investec upgraded its rating on the stock today from 'sell' to 'hold' after the shares surpassed its target price.
According to reports today, the EU is thinking about phasing in new capital rules for life insurers over the next seven years, easing the pressure and buying the industry time to meet new regulations. Insurance giant Aviva was a high riser, while Prudential, Legal & General and RSA Insurance also made gains.
Fitch Ratings also said today that insurance companies are less exposed than banks to contagion risk triggered by a Greek exit from the Eurozone "because of insurers' ability to share losses with policyholders and their lower reliance on short-term funding."
Costa and Premier Inn owner Whitbread was extending its gains after its well-taken first-quarter results yesterday. Barclays Capital, Oddo, Morgan Stanley and Exane BNP Paribas all raised their target prices for the stock today.
Heading the other way were heavyweight utilities stocks Severn Trent and United Utilities after going ex-dividend; from today, investors will not have the right to their latest dividend payments.
Oilfield services group Petrofac dropped despite being declared as the selected bidder on the Pánuco integrated production service contract in Mexico.
Mid-cap movers: Aer Lingus flies sky high after Ryanair bid
Irish carrier Aer Lingus has told shareholders to do nothing and wait for advice from the board after rival Ryanair again staged to takeover bid for the airline. The latter has now made three unsolicited offers, with the latest valuing Aer Lingus at 694m. Aer Lingus was up 27% early on.
European electrical goods retailer Kesa Electricals sank after saying that Chairman David Newlands is to be succeeded by the group's Senior Independent Director, Alan Parker. The news came as the group slashed its dividend following a sharp decline in profits in a year in which it disposed of its Comet retail chain for just £2 - and even then it had to pump in £30m of cash to persuade turnaround specialist OpCapita to take it off its hands.
FTSE 100 - Risers
Sage Group (SGE) 267.50p +5.52%
Aviva (AV.) 279.10p +4.69%
Whitbread (WTB) 2,059.00p +4.68%
Hargreaves Lansdown (HL.) 518.50p +4.56%
Polymetal International (POLY) 940.00p +3.70%
Weir Group (WEIR) 1,558.00p +3.66%
ITV (ITV) 76.50p +3.03%
IMI (IMI) 889.00p +2.72%
Ashmore Group (ASHM) 350.80p +2.66%
Smiths Group (SMIN) 1,026.00p +2.60%
FTSE 100 - Fallers
Severn Trent (SVT) 1,634.00p -6.58%
Petrofac Ltd. (PFC) 1,455.00p -3.77%
United Utilities Group (UU.) 656.00p -2.02%
Morrison (Wm) Supermarkets (MRW) 272.90p -1.23%
Reckitt Benckiser Group (RB.) 3,367.00p -0.88%
Evraz (EVR) 281.50p -0.85%
Randgold Resources Ltd. (RRS) 5,995.00p -0.66%
Unilever (ULVR) 2,062.00p -0.63%
BT Group (BT.A) 202.70p -0.49%
Experian (EXPN) 934.00p -0.43%
FTSE 250 - Risers
Invensys (ISYS) 257.00p +26.60%
Ocado Group (OCDO) 111.90p +7.08%
Laird (LRD) 201.10p +7.08%
International Personal Finance (IPF) 260.20p +6.95%
Man Group (EMG) 77.85p +6.50%
Senior (SNR) 198.60p +5.98%
Imagination Technologies Group (IMG) 482.30p +5.56%
Bovis Homes Group (BVS) 453.40p +5.39%
Mondi (MNDI) 580.00p +5.26%
Intermediate Capital Group (ICP) 270.30p +5.18%
FTSE 250 - Fallers
Home Retail Group (HOME) 87.00p -5.28%
Dairy Crest Group (DCG) 316.00p -4.27%
Carpetright (CPR) 700.00p -3.91%
Dechra Pharmaceuticals (DPH) 483.00p -3.01%
Bumi (BUMI) 339.00p -2.89%
3i Infrastructure (3IN) 120.20p -2.75%
JD Sports Fashion (JD.) 625.50p -2.57%
BBA Aviation (BBA) 199.90p -2.49%
PayPoint (PAY) 722.00p -2.37%
Regus (RGU) 89.55p -2.29%