LONDON (ShareCast) - - Shire tumbles after generic ADHD deal gets approval
- Spain officially requests aid
- Investors look to EU summit
The FTSE 100 slipped on Monday morning as investors showed caution ahead of a crucial EU summit later this week; US stocks futures were tracking European markets lower at lunchtime.
Analyst Craig Erlam from Alpari thinks that stocks and other risky assets are likely to "struggle" this week. "There are ongoing concerns that we are still not seeing the tough decisions being made by the Eurozone leaders to get the economies moving again," he said.
Investors will be looking ahead to the crucial European Union summit on June 28-29th, where European leaders will discuss specific steps towards a cross-border banking union, closer fiscal integration and the possibility of a debt redemption fund, according to reports. Investors, nonetheless, are still at a loss over how authorities intend to go about severing the link between banks' and sovereigns' debts.
Spains Ministry of Economy formally announced its request for "financial assistance for the Spanish banking system" today in a letter sent to Eurogroup President Jean-Claude Juncker. Though no specific amount was requested, independent audits last week revealed that the country's banks would need up to 62bn.
In other news, Goldman Sachs chief asset manager Jim ONeill has warned that worries about Greece pale in comparison to the danger from other peripheral southern European countries such as the third- and fourth-largest economies in the Eurozone, Italy and Spain. The recent election results in Greece show that the probability of its exit from the euro has considerably diminished. The true problems are Spain and Italy as both are just too big to be ignored, ONeill said in an interview with the Spanish newspaper El Mundo.
FTSE 100: Shire leads Footsie lower
Shares in pharmaceutical giant Shire tanked after the US Food and Drug Administration approved a rivals application to make a generic version of its attention deficit and hyperactivity disorder (ADHD) drug, Adderall XR.
Also falling was Morrisons after the supermarket group announced that its Finance Director Richard Pennycook is to leave next year to concentrate on building a "portfolio career".
IAG was out of favour on reports that nationalised Spanish bank Bankia and its holding company are preparing to sell most of their corporate shareholdings, including the 12% stake in the airline. IAG said last week that it was open to a rival airline buying the stake owned by Bankia.
Financial stocks were registering losses as investors fled from risk. Banking groups Lloyds, RBS, Standard Chartered and Barclays were out of favour, joined by insurance group Aviva and Aberdeen Asset Management.
Precious metals miner Polymetal was gaining after Nomura upgraded the stock by two notches from 'reduce' to 'buy', saying that "now that Polymetal has passed the FTSE re-weighting, we believe that these [current] levels provide a decent entry point." Sector peer Randgold was also in demand [see below].
SABMiller was lower after Liberum Capital downgraded the stock to 'sell'.
FTSE 250: Gold miners advance on Nomura comments
Gold miners Centamin and Petropavlovsk were benefiting from bullish remarks from Nomura about the gold sector. "Gold remains fundamentally supported by long-term trends", including increasing gold holdings within central bank reserves and strong Chinese demand.
Essar Energy, the India-focused integrated energy company, was in the red despite saying that the first of two 255MW units at its Vadinar Phase 2 power plant has been synchronised with the transmission grid.
Industrial property specialist Segro fell after selling four non-core industrial estates for £204.5m.
FTSE 100 - Risers
Polymetal International (POLY) 928.00p +1.59%
Rolls-Royce Holdings (RR.) 851.00p +1.01%
Randgold Resources Ltd. (RRS) 5,745.00p +0.97%
Hargreaves Lansdown (HL.) 505.50p +0.90%
Petrofac Ltd. (PFC) 1,382.00p +0.80%
Kingfisher (KGF) 282.80p +0.53%
Old Mutual (OML) 155.50p +0.52%
Fresnillo (FRES) 1,425.00p +0.49%
Wolseley (WOS) 2,262.00p +0.44%
Severn Trent (SVT) 1,612.00p +0.37%
FTSE 100 - Fallers
Shire Plc (SHP) 1,715.00p -12.77%
Aviva (AV.) 267.00p -2.77%
Morrison (Wm) Supermarkets (MRW) 262.20p -2.31%
Evraz (EVR) 262.40p -2.16%
Aberdeen Asset Management (ADN) 249.40p -1.85%
Standard Chartered (STAN) 1,362.00p -1.73%
SABMiller (SAB) 2,462.50p -1.66%
Lloyds Banking Group (LLOY) 30.88p -1.62%
International Consolidated Airlines Group SA (CDI) (IAG) 153.80p -1.47%
Barclays (BARC) 197.90p -1.40%
FTSE 250 - Risers
Centamin (DI) (CEY) 69.95p +8.37%
Micro Focus International (MCRO) 507.50p +3.89%
Dixons Retail (DXNS) 17.73p +2.72%
Petropavlovsk (POG) 467.50p +2.68%
Ashtead Group (AHT) 258.00p +2.38%
Greene King (GNK) 530.50p +2.12%
Domino's Pizza Group (DOM) 511.00p +2.00%
COLT Group SA (COLT) 125.10p +1.87%
Daejan Holdings (DJAN) 2,599.00p +1.72%
Spirit Pub Company (SPRT) 49.00p +1.55%
FTSE 250 - Fallers
Essar Energy (ESSR) 117.00p -7.00%
Ophir Energy (OPHR) 590.50p -3.75%
Premier Oil (PMO) 328.30p -3.50%
Heritage Oil (HOIL) 121.90p -3.48%
International Personal Finance (IPF) 248.00p -3.31%
Talvivaara Mining Company (TALV) 167.30p -2.85%
Regus (RGU) 84.40p -2.77%
Ruspetro (RPO) 132.60p -2.64%
Hays (HAS) 72.05p -2.64%
Intermediate Capital Group (ICP) 261.80p -2.42%