- Footsie swings into negative territory after Bernanke speech
- ECB to be given power to grant banking licences
- Miners lead risers by the close
Ben Bernanke's keenly watched speech at Jackson Hole sparked some volatility on equity markets in late afternoon trade, sending London's blue-chip index into the red by the close.
The Federal Reserve Chairman said that more quantitative easing (QE) would be necessary at some point, as he harboured some serious concerns about the US economy. He said that the Fed "will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labour market conditions."
However, as CMC Markets analyst Michael Hewson explains, the Chairman gave no new information regarding the extent and timing of further QE. "And so we now move onto the next piece of US data, and next week's jobs data, and a continuation of the 'will they, won't they' QE dance," he said.
In other news, the European Central Bank (ECB) will be given the sole power to grant banking licences under a Eurozone banking union plan, according to an EU official cited by Reuters.
Meanwhile, the Eurozone unemployment rate for July remained at a record high of 11.3%, according to Eurostat, in line with the consensus expectations.
FTSE 100: Miners rebound after recent sell-off
Mining stocks were rebounding after bearing the brunt of 'risk-off' trade over the past few days. Glencore, Xstrata, Randgold and Rio Tinto making decent gains by the close.
Potential merger partners Glencore and Xstrata were performing well in spite of Qatar Holdings' announcement yesterday that it would vote against the proposed tie-up at the shareholder meeting on September 7th. The Xstrata shareholder supports the tie-up but said that "it will not support the proposed merger terms of 2.8 new Glencore shares
for every one existing Xstrata share." The Qataris are wanting Glencore to raise the exchange ratio to 3.2.
However, Eurasian Natural Resource Corp (ENRC) and Anglo American finished the day in the red after Nomura said that they were its least preferred stocks in the iron ore sector.
Airline IAG was also suffering after Credit Suisse reduced its target price for the stock from 160p to 140p "as valuation support dissipates for the stock". The broker reiterated its 'neutral' rating for the company, saying that the stock will "remain weak in the short term as the market more fully factors in recent jet fuel price appreciation."
Media giant WPP was extending its losses after having to scale back its full-year like-for-like revenue target yesterday. Societe Generale and Berenberg both reduced their target prices for the stock this morning.
FTSE 250: bwin.party slumps after first-half results
Online gaming titan bwin.party after saying that revenues in the first half of 2012 grew at its casino and gaming offerings but poker has been hit by strong competitors and difficulties in southern Europe.
House-builder Redrow was in demand after saying that three investment firms are interested in a takeover, one of which is controlled by the company's Chairman and well-known businessman, Steve Morgan. While the offer of 152p a share represents a 23.8% premium to the 90-day average share price, the stock has risen strongly in recent weeks on speculation, closing yesterday at 151p.
FTSE 100 - Risers
Glencore International (GLEN) 385.05p +7.72%
Xstrata (XTA) 952.20p +5.68%
Petrofac Ltd. (PFC) 1,502.00p +2.81%
Intertek Group (ITRK) 2,815.00p +2.55%
Babcock International Group (BAB) 937.00p +2.46%
Aggreko (AGK) 2,360.00p +2.39%
Randgold Resources Ltd. (RRS) 6,320.00p +2.27%
IMI (IMI) 860.00p +2.14%
Admiral Group (ADM) 1,186.00p +2.07%
Weir Group (WEIR) 1,633.00p +2.00%
FTSE 100 - Fallers
Eurasian Natural Resources Corp. (ENRC) 301.90p -1.50%
Sainsbury (J) (SBRY) 327.60p -1.47%
Centrica (CNA) 326.70p -1.45%
Severn Trent (SVT) 1,731.00p -1.42%
National Grid (NG.) 683.50p -1.37%
Next (NXT) 3,575.00p -1.19%
Carnival (CCL) 2,159.00p -1.19%
ITV (ITV) 83.30p -1.19%
GlaxoSmithKline (GSK) 1,425.00p -1.04%
Reckitt Benckiser Group (RB.) 3,560.00p -1.03%
FTSE 250 - Risers
Bumi (BUMI) 318.00p +8.98%
Regus (RGU) 104.10p +6.77%
Cape (CIU) 242.40p +5.39%
Laird (LRD) 234.20p +5.02%
Centamin (DI) (CEY) 79.50p +4.88%
Cairn Energy (CNE) 287.00p +4.74%
Avocet Mining (AVM) 90.80p +4.67%
Aveva Group (AVV) 1,853.00p +3.98%
Michael Page International (MPI) 362.40p +3.51%
AZ Electronic Materials SA (DI) (AZEM) 310.80p +3.39%
FTSE 250 - Fallers
Bwin.party Digital Entertainment (BPTY) 94.10p -4.95%
Gem Diamonds Ltd. (DI) (GEMD) 165.70p -4.28%
JD Sports Fashion (JD.) 658.00p -4.01%
Wetherspoon (J.D.) (JDW) 447.90p -2.59%
Bank of Georgia Holdings (BGEO) 1,101.00p -2.57%
Dechra Pharmaceuticals (DPH) 492.30p -2.51%
Lonmin (LMI) 573.00p -1.97%
Ocado Group (OCDO) 60.50p -1.87%
Rank Group (RNK) 132.00p -1.86%
Dunelm Group (DNLM) 590.00p -1.75%