Friday 20 July 2012
QUOTE OF THE DAY
A fine is a tax for doing wrong. A tax is a fine for doing well
- Anonymous
TIP OF THE MONTH
Richard Gill presents the new video Tip of the Month
THIS MORNING IN LONDON
FTSE 100
5,681.58
-32.61 -0.57%
FTSE 250
11,186.03
-56.47 -0.50%
FTSE 350
3,015.56
-17.03 -0.56%
FTSE All Share
2,949.03
-16.60 -0.56%
AIM 100
3,125.90
23.84 0.77%
AIM All Share
689.50
3.59 0.52%
11:54 am
Rising Spanish bond yields dampen stocks
- Footsie pulls back after hitting two-month high
- UK borrowing, Spanish bond yields weigh on sentiment
- Resolution tanks after cancelling capital return
European markets were trading moderately lower on Friday morning, pulling back after a strong performance on the week so far. In London, sentiment was being weighed down by UK borrowing figures and rising bond yields in Spain.
Yesterday, the Footsie finished at 5,714, a closing level not surpassed since May 3rd, when it finished at 5,767.
Analyst Craig Erlam from Alpari said: "Stocks have performed well this week. Better-than-expected corporate earnings in the US has led to a seventh straight week of gains in the FTSE, while the NASDAQ is seeing its strongest week since the start of June. Little noise from the euro area has allowed the earnings to take the spotlight recently, but that is unlikely to last."
Net borrowing by the UK public sector, excluding the temporary effects of financial interventions (PSNB ex), reached £14.4bn in June 2012; £0.5bn higher than in June 2011, according to the latest data from the Office for National Statistics. The consensus estimate was for a fall to £13.4bn.
Eyes will be on the Eurogroup today as they meet to discuss the memorandum of understanding (MoU) for financial assistance to Spain's banks. "We expect that the Eurogroup will approve the MoU (which was approved yesterday by the German parliament) without any substantial changes to the version that has circulated last week. In our view the banking sector measures are well targeted to complete the cleanup of the banking system and, if the programme is also well implemented, is likely to be credible for the markets," said analysts at Barclays Capital.
Worrying investors over the last couple of days have been the escalating borrowing costs for Spanish debt on the secondary sovereign debt market. Today, the yield on a 10-year Spanish bond was 10.3 basis points higher at 7.114%.
FTSE 100: Resolution and Vodafone provide a drag
Shares in UK life insurance and asset management group Resolution dropped sharply after the group cancelled the cash return of £250m set for the first half of 2012 due to "uncertainty" in the markets.
The group said that the decision was based on its estimated capital position as at the end of June after working out the expected future capital requirements of Friends Life Group "against a backdrop of heightened investment, economic and regulatory uncertainty."
Telecoms group Vodafone declined early on after reported revenues fell by 7.7% (up 1% on an organic basis) in the first quarter with unfavourable foreign exchange movements in Europe providing a drag.
Anglo American, one of the largest mining companies in the world, was a high riser after it saw volume growth across most of its portfolio in the second quarter, with the exception of platinum and diamond production.
FTSE 250: Homeserve continues to make progress at home and abroad
HomeServe, the international home emergency business, advanced after saying it continues to grow its international businesses and is making progress in the UK in simplifying and refocusing the business.
Telecoms firm Cable & Wireless Comms dropped despite saying that the overall trading performance in the first quarter was in line with its initial outlook. The group said that voice revenues continue to decline across the group as market conditions in the Caribbean and Panama remain tough.
London Stock Exchange (LSE) was on the up on the back of rumours that is in merger talks with Singapore Exchange.The Telegraph reported that the CEOs of both firms had informal discussions recently, while the Financial Times said that they were not thinking about a "full-blown merger".
Banking, securities and asset management firm Close Brothers fell after admitting that difficult trading conditions in the Winterflood division continued to affect its overall performance during the five months ended June 30th.
FTSE 100 - Risers
Weir Group (WEIR) 1,607.00p +5.38%
Meggitt (MGGT) 407.90p +1.49%
IMI (IMI) 818.50p +1.36%
ARM Holdings (ARM) 497.40p +1.18%
Bunzl (BNZL) 1,116.00p +0.90%
Anglo American (AAL) 2,051.50p +0.81%
Rolls-Royce Holdings (RR.) 874.50p +0.81%
British Sky Broadcasting Group (BSY) 698.50p +0.72%
WPP (WPP) 825.00p +0.67%
Johnson Matthey (JMAT) 2,217.00p +0.59%
FTSE 100 - Fallers
Resolution Ltd. (RSL) 207.40p -9.00%
Evraz (EVR) 239.50p -4.35%
Aberdeen Asset Management (ADN) 249.10p -3.79%
Vodafone Group (VOD) 178.45p -2.51%
GKN (GKN) 211.10p -2.09%
Kingfisher (KGF) 266.00p -2.06%
Aviva (AV.) 294.60p -1.83%
Schroders (SDR) 1,348.00p -1.82%
Aggreko (AGK) 1,973.00p -1.79%
Barclays (BARC) 161.55p -1.64%
FTSE 250 - Risers
Homeserve (HSV) 196.50p +4.30%
Dixons Retail (DXNS) 16.83p +3.57%
Regus (RGU) 90.70p +2.14%
CSR (CSR) 297.90p +1.92%
Dignity (DTY) 829.00p +1.91%
Morgan Crucible Co (MGCR) 271.60p +1.72%
Raven Russia Ltd (RUS) 63.55p +1.68%
RPS Group (RPS) 225.60p +1.53%
Micro Focus International (MCRO) 545.00p +1.49%
Imagination Technologies Group (IMG) 495.70p +1.33%
FTSE 250 - Fallers
New World Resources A Shares (NWR) 302.70p -4.69%
Phoenix Group Holdings (DI) (PHNX) 484.80p -4.09%
Paragon Group Of Companies (PAG) 176.60p -3.71%
Bumi (BUMI) 308.50p -3.41%
SEGRO (SGRO) 229.60p -3.24%
Jupiter Fund Management (JUP) 211.60p -2.94%
Halfords Group (HFD) 200.10p -2.77%
Shanks Group (SKS) 78.60p -2.72%
Drax Group (DRX) 530.50p -2.66%
Inmarsat (ISAT) 478.80p -2.66%
ON THE SHARECRAZY BLOG
In recent times the printing press has been the 'get out of jail card' for the authorities. Could it ever occur to them that it was the printing press that put them there in the first place? As the world spirals down into a renewed slump, you can bet your bottom dollar (if there is such a thing in a system of elastic paper money) that the central bankers will charge once more into the breach with a renewed round of monetary 'stimulus'. As the conventional wisdom goes, injecting fresh money into the economy through the purchase of government bonds from banks helps to stimulate investment through lowering long-term interest rates. At a superficial level, this holds true. However, the wider consequences of 'quantitative easing' and the long-term impact on the economy are not as rosy.
Click here to view the rest of the article
WHAT THE BROKERS SAY
THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
Rockhopper
Falkland Oil & Gas
Bloomsbury Publishing
IP Group
Running trading thread
Click here to discuss shares with other ShareCrazy members
BOOK OF THE WEEK
By Wilhelm Hankel and Robert Isaak
A book review by Emanuil Halicioglu of Growth Equities & Company Research
Democratic capitalism, one of the greatest civilising forces known to man, has been pushed to the edge of a precipice. A brave new world economy, one not in thrall to a runaway interbank credit system, is struggling to be born, and only the actions of world policymakers, working in concert to make the hard choices, can bring it into being.
Click here to view the rest of the article
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