Senin, 23 April 2012

FTSE LIVE: Market opens down as expected

FTSE LIVE: Market opens down as expected

By This Is Money Reporters

PUBLISHED: 02:21 EST, 23 April 2012 | UPDATED: 08:13 EST, 23 April 2012

12.30: The Footsie has lost nearly 2 per cent or 99 points at 5,672.

As disputes over austerity measures in Holland threaten to undermine eurozone recovery plans, the sterling is holding at a 20-month high against a basket of currencies. We've got the full story here.

The euro dipped 0.3 per cent against the pound to 81.69p, close to a 20-month low of 81.62p, as investors looked to UK assets for safer alternatives with the eurozone running into more difficulties.

Amongst London's leading shares, engine-maker Rolls-Royce fell 2 per cent despite unveiling a new £370million contract with the U.S. Department of Defence to provide engines for aircraft. Rolls shares lost 16p to 816p.

Shares in Greene King dipped 2.5p to 526.5p despite revealing highe r like-for-like sales in the 13 weeks to April 15. The pub chain said its managed pubs saw a 4.5 per cent in like-for-like sales, with sales of food up 6.7 per cent, after a run of special events such as Mother's Day and Valentines Day boosted trade - read more here.

Brokers

Footsie movers: UK dividend growth has undershot expectations so far this year

And transport group Stagecoach saw shares slip after it revealed a slowdown in sales growth in recent weeks. The Perth-based company, which runs a rail and bus division, said profits over the coming year will at least hold steady but still saw shares fall 2.2p to 250.9p.

10.20:

The Footsie is still falling, down 89 points (1.5 per cent) to 5,683.

Joshua Raymond, chief market strategist at City Index, commented: 'The situation in the Netherlands is concerning, purely on the basis that it is creating more political instability in Europe at a time when the markets want to see the eurozone’s fiscal firewalls maintained and strengthened and EU members focusing on growth policies.

'At the same time we have seen some shockingly bad data out of Europe this morning, which investors have proved to be highly sensitive to. German PMI manufacturing shrank at its fastest pace in nearly three years this month, with the flash PMI measure falling to 46.3 when a small rise from 48.4 to 49 had been expected.

'The fall was quite a shock, particularly given that investors were relying on German strength to drive growth within the eurozone.'

Eurozone flash PMI also disappointed badly, coming in at 46 when a small rise from 47.7 to 48 had been expected.

Germany's Dax index was down 2.5 per cent while France's Cac 40 was about 1.5 per cent lower.

Confidence was also hit by weak manufacturing survey figures from Germany and the wider eurozone.

Just yesterday Chinese Premier Wen Jiabao said during a visit to Germany: 'The reason why the global economy cannot walk out of the shadow of the (financial) crisis is also related to the lack of new growth points in the real economy,' adding that China and Germany had fared better than most during the crisis due to their strong manufacturing bases.   

'(The two countries) will surely have an ever more important role to play in innovation and development of worldwide industry,' he said.

German Chancellor Angela Merkel, whose country has faced criticism over its insistence on reducing debts, said Germany wanted to strike a good balance between fiscal discipline and fostering growth.

'We must succeed with both because responsibility rests with Germany too for a sensible global economic development,' she said.   

09.40: Cable Wireless Worldwide shares are up 5.2p (16.5 per cent) at 37.3p after the ailing telecoms group was bought by mobile phone giant Vodafone for £1.04billion.

The 38p-a-share bid marks a 92 per cent premium to the CWW closing price on the day before the talks were made public. Read the full story here.

The Footsie has lost 78 points (1.4 per cent) to 5,693.7 in early trading as political uncertainty in France and the Netherlands rattled investors confidence.

French President Nicolas Sarkozy came second in Sunday's first round of the presidential election to socialist rival Francois Hollande, while third-place Marine Le Pen took the largest share of the vote for her far-right National Front party.

The uncertainty in both countries rocked the banking sector with Royal Bank of Scotland losing l 4 per cent or 0.9p to 23.2p and Lloyds Banking Group falling 0.6p to 29.4p.

And the weak purchasing managers survey of China's manufacturing sector knocked the mining sector, with Vedanta Resources dropping 4 per cent or 29p at 1188p, while Antofagasta lost 3 per cent or 36p at 1142p.

Vodafone was one of a handful of risers on London's top flight, as shares rose 0.4p to 171.9p, after it announced its deal to buy CWW,  which will help it bolster its corporate arm in the face of slow consumer growth.

08.15: The Footsie has dropped on opening by 47 points (0.8 per cent) to 5,725.

07.30: The FTSE 100 is seen opening down 23-25 points or as much as 0.4 percent lower, giving back most of Friday's gains due to concerns over the eurozone debt crisis.

Firmer banks and mining stocks had seen the index posting its biggest weekly gain since February at the close on Friday, up 27.60 points at 5,772.15.

But the Netherlands, a core eurozone member, was drawn into the crisis at the weekend when the government failed to agree on budget cuts, making elections almost unavoidable and casting doubt on its support for future eurozone measures.

'The Netherlands could be a problem because up until now it was a stable partner in the euro zone, this shows the problems and increasing tensions within the area. It's definitely a problem for the market,' said Christian Stocker, strategist at UniCredit Global Research.

Banks, which have huge exposure to the debt problems, were down 1.4 per cent across Europe, while basic resource stocks  fell 2 per cent after HSBC's Flash Purchasing Managers Index showed China's factory output was still contracting.     

UK dividend growth undershot expectations in the first quarter of 2012, hitting 6.6 percent after the exclusion of one-off factors, and will miss original forecasts for the full year, Capita Registrars reported.      

Stocks to watch

ASTRAZENECA: The drugmaker has agreed to buy U.S. biotech company Ardea Biosciences for $1.26 billion, giving it access to a new drug for treating gout patients in the latest deal to try and bolster its weak drug pipeline.          

VODAFONE, CW WORLDWIDE: Vodafone has agreed to buy corporate telecoms company Cable Wireless Worldwide for £1.04 billion, in a deal that adds a British fixed line network to its wireless network.

ROLLS-ROYCE: The engineer has signed a $598 Million contract with the U.S. Department of Defense for 268 engines for V-22 aircraft.        

AVIVA: Britain's second biggest insurer is expected to announce the sale of its American life assurance business Aviva USA next month, on which it will make a loss of £1billion.           

BARCLAYS: The Local Authority Pension Fund Forum (LAPFF) has urged its members to oppose Barclays' pay deal for chief executive Bob Diamond, who is due to take home about £17million in salary, bonus and share awards for last year.

BHP BILLITON: The global miner faces a $5 billion write-down after two ill-times acquisitions in America, raising doubts over the future of chief executive Marius Kloppers.       

TESCO: The retailer has launched a reorganisation of its non-food internet business after it failed to make a profit last year.

STAGECOACH GROUP: The transport operator says overall current trading and profitability of the group remains good , with its wholly owned divisions well placed to at least maintain level of operating profit in 2012-13 year.

GREENE KING: The brewer and pubs operator said retail like-for-like (LFL) sales rose 4.5 percent in the last thirteen weeks, with food LFL sales in retail up 6.7 percent in that period, and its profit, cashflow and balance sheet remain in line with the firm's expectations.          

BTG: The drugs firm said it had positive results from second U.S. phase III trial of its Varisolve product.   

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Situation absolutely normal.Stock Market investments should be kicked into the long grass for ever.The only people that are ever going to make any money out of these are the traders and the fund managers.They do not mind and the investor certainly does not matter.Refresh my memory how much the pensions industry takes out in fees annually,oh yes I recall up to £67.2 bn a year,obscene obscene obscene,but still these people are allowed to flourish at our expense.

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The headless chickens seem to have been let loose again on the floor of the stock market!!!!!

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