Date: Wednesday 08 Aug 2012
- Market Movers
- techMARK 2,103.70 -0.99%
- FTSE 100 5,812.13 -0.50%
- FTSE 250 11,386.87 -0.65%
LONDON (ShareCast) - - ECB optimism fades
- S and P cuts Greek outlook to 'negative'
- BoE slashes growth forecast
The Footsie remained firmly in the red on Wednesday morning as optimism earlier this week about the situation in Europe began to fade, particularly as Greece's credit rating outlook was lowered by Standard and Poor's.
"Draghi hinted last week at the ECB offering assistance alongside the EFSF to bring down borrowing costs of Spain and Italy. Until today, this has pushed stocks up to three-month highs while the euro has gained significantly against the other major currencies," said analyst Craig Erlam from Alpari.
"The effect appears to be fading now, with people waiting for the Eurozone to take the next step. Even details confirming how the scheme would work, and when it will begin, would see the rally continue. Until then, were unlikely to see any major moves in either direction," he said.
US stock futures were pointing to falls early on in New York on the back of Eurozone concerns. Investors are thought to remain nervous ahead of a barrage of economic data from China due out later today and tomorrow.
Credit ratings agency S&P lowered its outlook on Greece last night from 'stable' to 'negative' to reflect the possibility of a downgrade if the country fails to secure the next tranche of aid. The sovereign rating still remains at 'CCC'.
In a statement, S&P said: "Following delays in implementing budgetary consolidation measures and a worsening Greek economy, we believe Greece is likely to require additional financing for 2012 under the EU/International Monetary Fund."
Also weighing on sentiment today was the Bank of England's inflation report in which it said that the UK economy will not grow this year, compared with its May estimate of 0.8% growth. We will get back to the same growth rates we experienced before the crisis . . . but its quite impossible to know over what time period," said BoE Governor Mervyn King.
StanChart bonus back after steep sell-off
Following a 16% slump yesterday, emerging markets-focused bank Standard Chartered was leading the risers today. It was revealed yesterday that a US banking regulator accused it of collusion with the government of Iran to hide transactions from authorities.
Pharma giant AstraZeneca was under the weather after its study of BTG's CytoFab drug showed that there were no significant improvements versus a placebo. Both Astra and BTG have now halted further development and BTG said it will take a £28m one-off charge this year.
Rio Tinto, the mining and resources giant, jumped after managing to beat market expectations on earnings in the first half. Mining peers Fresnillo, Randgold and Xstrata were also making gains.
Engineering group GKN was a heavy faller after going ex-dividend - from today, investors will not have the right to the group's latest dividend. Also going ex-div today were FTSE 350 peers Reckitt Benckiser, Reed Elsevier, SABMiller, BT Group, Rexam, Spirent Communications, Greene King and RPC.
Currency headwinds were a problem for South African insurance group Old Mutual in the first half of 2012, as were falling interest rates, which hit investment returns, causing shares to fall early on.
Aquarius Platinum was in the red after the firm swung to a pre-tax loss of $189m in the 12 months to June 30th, versus a profit of $25.4m the year before, while revenue slumped 29% to $485.4m.
FTSE 100 - Risers
Standard Chartered (STAN) 1,321.50p +7.57%
Rio Tinto (RIO) 3,222.00p +2.92%
Fresnillo (FRES) 1,553.00p +1.50%
Randgold Resources Ltd. (RRS) 6,145.00p +0.99%
Bunzl (BNZL) 1,147.00p +0.97%
Croda International (CRDA) 2,412.00p +0.96%
Xstrata (XTA) 903.70p +0.76%
National Grid (NG.) 689.00p +0.58%
Rolls-Royce Holdings (RR.) 854.00p +0.47%
BHP Billiton (BLT) 1,968.00p +0.41%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 150.70p -3.77%
Smiths Group (SMIN) 1,078.00p -3.14%
ICAP (IAP) 326.40p -2.91%
Tullow Oil (TLW) 1,331.00p -2.85%
Serco Group (SRP) 576.00p -2.70%
Pennon Group (PNN) 734.50p -2.52%
AstraZeneca (AZN) 3,011.50p -2.32%
BT Group (BT.A) 219.60p -2.14%
Reed Elsevier (REL) 558.50p -1.93%
GKN (GKN) 215.50p -1.78%
FTSE 250 - Risers
Heritage Oil (HOIL) 155.50p +4.50%
Stobart Group Ltd. (STOB) 121.90p +2.44%
Melrose (MRO) 233.90p +1.92%
BH Global Ltd. USD Shares (BHGU) 11.5 +1.77%
Dunelm Group (DNLM) 592.50p +1.72%
Henderson Group (HGG) 105.40p +1.35%
BBA Aviation (BBA) 180.40p +1.35%
JD Sports Fashion (JD.) 680.00p +1.34%
UBM (UBM) 683.00p +1.26%
Taylor Wimpey (TW.) 49.06p +1.15%
FTSE 250 - Fallers
Cobham (COB) 224.30p -5.95%
Petra Diamonds Ltd.(DI) (PDL) 109.30p -4.62%
Greene King (GNK) 574.00p -4.09%
Bwin.party Digital Entertainment (BPTY) 93.60p -3.60%
Homeserve (HSV) 217.30p -3.51%
Talvivaara Mining Company (TALV) 149.20p -3.24%
Aquarius Platinum Ltd. (AQP) 35.50p -3.22%
Tullett Prebon (TLPR) 287.60p -3.20%
Michael Page International (MPI) 377.70p -3.10%
Amlin (AML) 373.80p -2.86%