- Europe grants Greece more aid
- OECD cuts growth estimates
- Footsie comes off day's highs by the close
After a solid start for the Footsie following last night's Greek bailout deal, gains were pared by the close of trade on Tuesday with some saying that the agreement just kicks the can down the road for the heavily indebted nation.
The FTSE 100 index finished the session at 5,800, up 13 points on the day (+0.22%) but under the intraday high of 5,822 reached this morning.
Eurozone finance ministers yesterday finally inked out an agreement on Greece, giving the green light to the disbursement of the next €43.7bn bailout tranche (€34.4bn will be issued next month and the remaining monies will be disbursed in the first quarter of 2013).
Market strategist Ishaq Siddiqi from ETX Capital said that the deal was widely priced in to markets given the subdued reaction. "Traders feel all EU leaders have done here is kick the can way down the road with the measures perhaps still not as affective to solve Greece's problems."
Similarly, the agreement was labelled a "new can-kicking world record" by Societe Generale chief currencies strategist Kit Juckes. "The key issue for Greece, as for the rest of the Eurozone, is the lack of growth. Today's optimistic mood will in due course be reversed unless someone comes along with a magic growth potion."
Also providing some downward pressure was the news that the OECD has slashed its 2013 growth forecasts for the world's advanced economies to 1.4%, from the 2.2% estimate in May. The OECD said that the global economy is "expected to make a hesitant and uneven recovery over the coming two years" and "decisive policy action is needed" in the Eurozone and US.
Meanwhile, a barrage of broadly better-than-expected economic data Stateside failed to give equities a boost this afternoon, with markets shrugging off decent readings of consumer confidence, durable goods orders, retail sales and home prices. Benchmarks on Wall Street opened more or less flat.
FTSE 100: Banks lead the upside
Banking peers Royal Bank of Scotland, Lloyds and Barclays were registering decent gains as investors built positions in 'riskier' assets. RBS was benefitting from an rating upgrade by UBS to 'buy', while Barclays Capital raised its target price for both RBS and Lloyds.
In contrast, Aberdeen Asset Management was among the worst performers of the morning after Citigroup downgraded its recommendation for the stock to 'neutral'.
dropped after Rona Fairhead, the Chairman and Chief Executive Officer (CEO) of its subsidiary the Financial Times Group, announced that she is to leave the firm next year. Fairhead, who has been with Pearson for 12 years, is said to be pursuing "the next phase of her career outside Pearson".
Vodafone, the telecoms giant involved in the development of the M-Pesa service in Africa, rose after announcing that from Tuesday 27th the service's Kenyan customers will have access to interest bearing saving accounts and have the ability to take out small loans through a new service, called M-Shwari.
Meanwhile, outsourcing giant Capita rose after it said it was the preferred bidder for an educational support services joint venture with Staffordshire County Council. The joint venture, in which Capita will hold a majority stake, will initially deliver a range of educational support services for schools and academies in the Staffordshire region.
FTSE 250: Mitchells & Butlers sinks on poor outlook
Mitchells & Butlers, the UK's largest operator of managed restaurants and pub, was unwanted after noting it had made a slow start to the new financial year, partly because of unseasonably warm weather in the same period in 2011.
India-focused Essar Energy was also lower as shares retreated after making strong gains on Monday on the back of a strong set of first-half results.
Broadband and communications provider KCOM fell after reporting a slight fall in revenue and a large rise in net debt in the first half, its first increase in net debt in four years following seven consecutive six-month periods of reduction.
British defence-equipment maker Chemring, which scaled back full-year profit guidance earlier this month, made strong gains after saying that expectations for the full year remain unchanged since its last update.
Business information and events group Informa was also higher after Morgan Stanley raised its target price on the stock from 415p to 485p and upgraded it to 'overweight'.
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 295.10p +3.51%
Capita (CPI) 751.00p +3.16%
Lloyds Banking Group (LLOY) 46.41p +2.92%
BAE Systems (BA.) 319.70p +2.47%
Aggreko (AGK) 2,235.00p +2.43%
ARM Holdings (ARM) 758.00p +2.36%
Intertek Group (ITRK) 3,023.00p +1.99%
Standard Life (SL.) 310.70p +1.50%
Barclays (BARC) 243.65p +1.31%
Tate & Lyle (TATE) 779.00p +1.30%
FTSE 100 - Fallers
Aberdeen Asset Management (ADN) 328.60p -2.20%
Pearson (PSON) 1,168.00p -1.35%
Johnson Matthey (JMAT) 2,269.00p -1.18%
BG Group (BG.) 1,060.00p -1.07%
Royal Dutch Shell 'B' (RDSB) 2,140.50p -0.67%
Eurasian Natural Resources Corp. (ENRC) 270.20p -0.66%
Antofagasta (ANTO) 1,238.00p -0.64%
Rio Tinto (RIO) 2,978.50p -0.52%
Royal Dutch Shell 'A' (RDSA) 2,072.00p -0.50%
Xstrata (XTA) 1,011.50p -0.49%
FTSE 250 - Risers
Kenmare Resources (KMR) 33.46p +5.52%
New World Resources A Shares (NWR) 252.30p +4.60%
Chemring Group (CHG) 238.20p +3.57%
St. Modwen Properties (SMP) 218.70p +3.11%
Domino Printing Sciences (DNO) 563.50p +2.83%
Pace (PIC) 182.30p +2.82%
Informa (INF) 416.80p +2.79%
Carpetright (CPR) 678.50p +2.73%
Bumi (BUMI) 265.00p +2.71%
Hunting (HTG) 789.00p +2.47%
FTSE 250 - Fallers
Mitchells & Butlers (MAB) 312.10p -5.71%
Man Group (EMG) 73.25p -4.68%
Essar Energy (ESSR) 122.00p -3.94%
Perform Group (PER) 380.00p -3.55%
Lonmin (LMI) 275.00p -3.34%
KCOM Group (KCOM) 69.45p -2.59%
Ocado Group (OCDO) 70.10p -2.37%
Petropavlovsk (POG) 350.60p -2.15%
Petra Diamonds Ltd.(DI) (PDL) 103.00p -2.09%
Raven Russia Ltd (RUS) 61.70p -2.06%