Date: Thursday 12 Jul 2012
LONDON (ShareCast) - 1630:Close The Eurozone's industrial production rose by 0.6 per cent month-on-month (-2.8 per cent year-on-year) in May according to the latest data released by Eurostat, the European Union's official statistics office. Meanwhile, under increasing public pressure that criticises the back-stepping in campaign promises, the leaders of Greeces coalition government are trying to get up to speed in order to bring forward the renegotiation of the terms of its bailout. In UK companies, Ashmore was by far the worst performer on the Footsie, dropping nearly eight per cent after saying AuM dropped over three per cent in Q2, while miners were registering steep losses after Credit Suisse slashed target prices across the sector on the back of downward revisions to its commodity price forecasts. The FTSE closed down 56 points at 5,608.
1409: The FTSE 100 has come off its intraday low but remains firmly in the red, down 55 points at 5,609, as US stock futures point to moderate falls after the opening bell in just over 20 minutes. Helping limit losses on Wall Street will be weekly jobless claims which fell to a four-year low last week. According to the Labor Department, applications for unemployment benefits fell 26,000 to 350,000 from an upwardly revised 376,000 the week before. Consensus forecasts were for a more modest decline to 372,000. Thus, analyst Cooper Howes at Barclays Capital said that the near-10,000 drop in the four-week moving average is certainly an encouraging sign, given that jobless claims stood higher during most of Q2 than they did at the end of Q1.
1201: Footsie has fallen below 5600 with resource stocks largely responsible for the decline in the wake of the decision by Credit Suisse to lower its commodity price forecasts. Sandy Flockhart is to hang up his pinstripe suit after 37 years working for banking giant HSBC. Cancer-stricken Flockhart will retire as a non-executive director of HSBC Holdings and from his position as Chairman of HSBC Bank on July 31st. FTSE 100 is down 66 at 5,598.
1044: UK debt management office has just sold 3.5bn pounds in 10 year gilts at a record low yield of 1.72%. That ties in with dropping sovereign bond yields the world over which some are tying to the European Central Bank´s recent decision to cut its deposit rate to 0 per cent. As an aside, this is what analysts at Morgan Stanley had to say about the Fed´s decision last night, "the FOMC minutes reveal that there appears to be little appetite by the Fed to enter another round of full balance sheet-expanding QE at this point, despite the recent loss of momentum in the pace of the U.S. recovery (...) our US economists maintain their view that the bar is high for QE3, especially ahead of the election. Hence, we would expect little in the way of support for struggling risk appetite." Credit Suisse has slashed its target price on Aquarius Platinum to 55p from 85p. FTSE 100 down 35 to 5,629.
0934: The latest monthly Chinese bank lending data just out have revealed a modestly larger than expected increase of 919bn Yuan, versus the 880bn expected, Bloomberg TV reports. That may help to temper worries about growth in the Asian giant. A member (Bonicci) of the ECB´s governing council has also been cited as saying that the central bank still has tools left to act. FTSE 100 has come off its lows and is now down 28 at 5,637.
0840: Sticking with the theme of global growth worries, fund manager Ashmore said assets under management (AuM) fell 3.3 per cent to $63.7bn in the quarter ended 30 June 2012 as worries about the Eurozone crisis and global growth rattled investor confidence. It is now the worst performer on the FTSE 350. G4S is also weak this morning on negative media coverage of the government´s impending decision to use Army troops to fill gaps in Olympic Secur¡ties. Also worth noting, Credit Suisse has today revised its commodity price forecasts, leading it to downgrade its recommendation on shares of BHP Billiton to neutral from outperform. Closer to home, real house prices will not return to pre-crisis peaks until the middle of the next decade, as lack of access to credit continues to hamper first time buyers, according to research by PwC, with the risk of double-digit price declines if the situation on the euro area becomes chaotic, the Times reports this morning. FTSE 100 down 52 to 5,612.
0812: London has made a jittery start in the wake of yesterday's release of the minutes of the July meeting of the US Federal Open Market Committee, though there appeared to be little in them that should have surprised the market. Unexpectedly weak employment figures in Australia and a surprise interest rate cut by South Korea´s central bank have contributed to a sense of unease in global markets, with both Tokyo and Hong Kong trading lower. Some analysts may also have been expecting the Bank of Japan (boJ) to loosen its policy last night, which it has not. In the UK, there are just three Footsie constituents in positive territory. Fund manager Ashmore is the worst performer after assets under management in the April-June quarter fell even more than the market expected. Resource stocks are down in the dumps, with Rio Tinto the hardest hit after long-standing Chief Financial Officer Guy Elliott announced he is to retire at the end of next year. FTSE 100 is down 41 at 5,624.