| | Wednesday 18 July 2012 QUOTE OF THE DAY In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497
- Warren Buffett
THIS MORNING IN LONDON FTSE 100 5,636.44 
7.35 0.13% FTSE 250 11,040.55
21.32 0.19% FTSE 350 2,989.61
4.14 0.14% FTSE All Share 2,923.80
4.11 0.14% AIM 100 3,092.53 
-8.48 -0.27% AIM All Share 684.08
-1.39 -0.20% 11:51 am
German ZEW data dampens stocks
- BoE could consider rate cut in future
- UK unemployment falls
- Bernanke comments will be closely watched
The morning's gains were pared by Wednesday lunchtime as investors digested the minutes of the latest UK policy-makers' meeting and prepared for another testimony from Federal Reserve Chairman Ben Bernanke this afternoon.
The majority of policy makers at the Bank of England (BoE) voted in favour of increasing quantitative easing at the last meeting, while the Monetary Policy Committee (MPC) were unanimous in their decision to maintain the Bank Rate.
However, the Committee said that new initiatives, such as the BoE's Funding for Lending Scheme (FLS), which offers cheap funding to banks to encourage lending, could make a case for an interest-rate cut in the future.
In other news, UK unemployment fell by 65,000 to 2.58m in the three months to May, according to the Office for National Statistics. The jobless rate dropped from 8.3% to 8.1%, better than the consensus estimate of 8.2%. Nevertheless, the number of people claiming jobless benefits rose by more than expected.
European stocks were dampened yesterday by the Federal Reserve's semi-annual policy report to Congress as Chairman Ben Bernanke said that the central bank is "prepared to take further action as appropriate". The comments were more or less in line with his comments in the past, disappointing markets who were hoping for hints at further stimulus. Bernanke is due to testify again to Congress today.
Analyst Craig Erlam from Alpari said this morning: "Bernanke did concede that the Fed will continue to look at a number of measures to stimulate the economy. However, given the response to the extension of Operation Twist last month, this doesn't exactly fill people with hope. Many are still hopeful that QE3 will at least be discussed at the next meeting in two weeks, but given the Fed's policy so far and their reasons for the lack of growth - Eurozone crisis and poor fiscal policy - this may be overly optimistic."
FTSE 100: G4S and Fresnillo lead the risers
Security solutions group G4S was performing well as it attempts to claw back some of the losses it has incurred over the last week - including today's gain, the stock is still down nearly 15% on last Wednesday. The group said on Monday that it will take a GBP35-50m loss on its Olympics contract.
Silver and gold miner Fresnillo surged after notching up record levels of gold production in the second quarter while silver output was up quarter-on-quarter. Sector peer BHP Billiton also rose after achieving annual production records across ten of its operations in the year to the end of June.
Fund managers Ashmore and Schroders were high risers early on after Goldman Sachs upgraded its ratings on the stocks to 'buy' and 'conviction buy', respectively.
RSA Insurance was a heavy faller after the miserable weather over the past few months put a dampener on its full-year underwriting performance.
Real estate group Land Securities fell despite saying that it has seen "good momentum" on lettings across all schemes in the first quarter. Land Secs and sector peer Hammerson were being pressured lower after Barclays Capital downgraded the stocks to 'equal weight'. Meanwhile, tobacco giant Imperial fell after going ex-dividend.
Oil and gas giant Tullow edged higher after finding oil and gas-condensate at its Wawa-1 well offshore Ghana, likely to reassure shareholders who were disappointed on Monday after the firm plugged and abandoned a well in Guyana due to safety concerns.
FTSE 250: Homeserve surges on M&A speculation
Homeserve, the troubled emergency home repairs company, jumped despite denying it is in talks about a possible takeover. Shares were up nearly 14% by midday.
Wireless technology and computer chip company CSR was in the red, pulling back after gaining over 30% the day before as it announced the sale of its handset connectivity technology business to Samsung. UBS downgraded the stock from 'buy' to 'neutral' this morning.
FTSE 100 - Risers
G4S (GFS) 247.20p +3.00%
Fresnillo (FRES) 1,444.00p +2.56%
Ashmore Group (ASHM) 329.50p +2.33%
Capital Shopping Centres Group (CSCG) 334.10p +2.05%
Marks & Spencer Group (MKS) 323.70p +1.70%
Antofagasta (ANTO) 1,061.00p +1.63%
Burberry Group (BRBY) 1,215.00p +1.59%
Johnson Matthey (JMAT) 2,131.00p +1.33%
Hargreaves Lansdown (HL.) 559.50p +1.27%
Compass Group (CPG) 661.00p +1.15%
FTSE 100 - Fallers
Reed Elsevier (REL) 521.50p -2.16%
Weir Group (WEIR) 1,479.00p -1.53%
United Utilities Group (UU.) 688.00p -1.43%
RSA Insurance Group (RSA) 106.90p -1.29%
Imperial Tobacco Group (IMT) 2,517.00p -1.10%
Admiral Group (ADM) 1,127.00p -1.05%
Evraz (EVR) 248.00p -1.04%
Tate & Lyle (TATE) 665.50p -0.82%
HSBC Holdings (HSBA) 543.20p -0.77%
ITV (ITV) 73.45p -0.74%
FTSE 250 - Risers
Homeserve (HSV) 188.80p +13.05%
Ruspetro (RPO) 139.40p +7.23%
Kenmare Resources (KMR) 32.90p +4.21%
Hays (HAS) 69.10p +4.07%
Imagination Technologies Group (IMG) 459.50p +3.61%
Stobart Group Ltd. (STOB) 119.00p +3.39%
Elementis (ELM) 185.00p +3.35%
Avocet Mining (AVM) 69.60p +2.88%
Yule Catto & Co (YULC) 134.00p +2.68%
Booker Group (BOK) 88.55p +2.67%
FTSE 250 - Fallers
Melrose (MRO) 218.50p -2.89%
Morgan Crucible Co (MGCR) 261.70p -2.79%
Petropavlovsk (POG) 417.50p -2.57%
Hochschild Mining (HOC) 428.30p -2.50%
Aquarius Platinum Ltd. (AQP) 40.47p -2.15%
Perform Group (PER) 354.40p -2.10%
Ferrexpo (FXPO) 192.60p -2.08%
Afren (AFR) 116.00p -2.03%
New World Resources A Shares (NWR) 309.00p -1.94%
Essar Energy (ESSR) 113.00p -1.82%
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
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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.
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