- Caterpillar disappoints with guidance
- Kenny-Merkel statement apparently overinterpreted -DPA
- BP falls after confirming Rosneft deal

After a brief stint in positive territory, UK stocks fell into the red by the close on Monday after some disappointing guidance for US economic bellwether Caterpillar dampened sentiment late on.

While Caterpillar beat earnings forecasts in the third quarter, the industrial machines giant's guidance was disappointing: the company estimates that full-year earnings per share (EPS) will be $9.00-9.25, down from $9.60 last year and below the current $9.40 consensus estimate.

"The general trend of the earnings season appears to be continuing today. Of the 12 companies that reported before the opening bell, 10 beat earnings expectations however only half reported higher revenue from a year earlier. With the global economy expected to deteriorate before it improves, these figures are likely to worsen in the coming quarters," said market analyst Craig Erlam from Alpari.

Nevertheless, improving newsflow from the Eurozone gave markets a lift earlier on, albeit only slightly. Thus, a decent outcome for Spanish Prime Minister Mariano Rajoy at the regional elections at the weekend helped sentiment as did a joint statement issued by Irish Taoiseach Enda Kenny and German Chancellor Angela Merkel managed to ease concerns temporarily. The latter however seems to have been overinterpreted, according to a German government spokesman.

Worries about the Japanese economy were also weighing on investors' minds today after exports dropped by their most since the aftermath of last year's earthquake and tsunami. Exports declined 10.3% year-on-year last month, worse than the 5.8% decrease in August and the 9.9% fall expected. The trade deficit was 588.6bn yen, higher than the 547.9bn expected by the consensus of analysts. Imports rose by a more-than-expected 4.1%.

FTSE 100: Aggreko, Petrofac hit by downgrades


Following on from Friday's sharp fall, Aggreko was again the worst perfumer on the Footsie this afternoon after HSBC downgraded its rating on the stock from 'neutral' to 'underweight' and reduced its target for the shares. Jefferies, JPMorgan Cazenove and Barclays Capital also lowered their target price for the stock today, after the temporary power and temperature control group said last week that exchange rates and increased bad debt provisions will have a 2.5% negative impact on its full-year bottom line.

Meanwhile, chemicals group Johnson Matthey was under the weather after Citigroup cut its target price on the stock by 10%, from 3,000p to 2,700p. The broker maintained a 'buy' rating though. Oilfield services firm Petrofac was lower after Liberum Capital lowered its recommendation to 'hold'.

Mining stocks held up well today despite macroeconomic concerns weighing on the wider market. Randgold, Fresnillo and Antofagasta were among the best performers by the close.

Tobacco peers British American and Imperial were lighting up after Credit Suisse retained its 'neutral' rating on US counterpart Philip Morris Internationa, saying that it sees "greater upside elsewhere in our coverage". The broker kept its 'outperform' ratings on the UK-listed stocks, highlighting that they trade at a discount to PMI.

Oil titan BP finished lower after agreeing to the terms of sale agreement of 50% stake in TNK-BP to Rosneft. Closure of deal seen in first half of 2013. BP will receive $17.1bn in cash plus shares. Of that amount $4.8bn will be reinvested. BP will thus receive $12.3bn in net terms and a 19.75% stake in Rosneft. A newswire report this afternoon cited BP's Russian head saying they are mulling over whether to do a share buy-back with proceeds of the deal.

FTSE 250: Spectris, Devro and Fidessa provide a drag


Instrumentation and controls company Spectris dropped after Panmure Gordon cut the stock from 'buy' to 'hold'. Analyst Oliver Wynne-James said: "The 12% move following Friday's IMS removed a large chunk of the 12 month implied upside, so we cut the recommendation to 'hold'."

Devro, a sausage casing supplier, was a heavy faller after warning that full-year operating profits will be slightly below expectations, although still ahead of last year.

Trading systems developer Fidessa fell after warning persistent challenges in the financial markets weighed on third-quarter equity market volumes; the on-going pressure means that full-year revenue is likely to be unchanged from the year before.


FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 7,615.00p +2.70%
Aviva (AV.) 341.60p +1.30%
Fresnillo (FRES) 1,916.00p +1.27%
Imperial Tobacco Group (IMT) 2,310.00p +1.05%
Associated British Foods (ABF) 1,373.00p +0.88%
Lloyds Banking Group (LLOY) 40.81p +0.80%
British American Tobacco (BATS) 3,216.00p +0.80%
Capita (CPI) 734.00p +0.76%
Glencore International (GLEN) 350.25p +0.72%
Capital Shopping Centres Group (CSCG) 336.30p +0.69%

FTSE 100 - Fallers
Aggreko (AGK) 2,073.00p -2.99%
Wolseley (WOS) 2,661.00p -2.49%
Petrofac Ltd. (PFC) 1,578.00p -2.29%
Experian (EXPN) 1,047.00p -2.24%
Johnson Matthey (JMAT) 2,280.00p -2.10%
Shire Plc (SHP) 1,822.00p -1.78%
Wood Group (John) (WG.) 860.50p -1.71%
International Consolidated Airlines Group SA (CDI) (IAG) 159.70p -1.54%
BP (BP.) 443.45p -1.54%
Centrica (CNA) 326.00p -1.51%

FTSE 250 - Risers
Homeserve (HSV) 239.10p +3.51%
Essar Energy (ESSR) 136.70p +3.40%
Diploma (DPLM) 459.90p +3.33%
Hansteen Holdings (HSTN) 79.00p +2.60%
NMC Health (NMC) 185.60p +2.54%
Heritage Oil (HOIL) 207.90p +2.46%
Go-Ahead Group (GOG) 1,374.00p +2.23%
Carillion (CLLN) 308.80p +2.15%
Kenmare Resources (KMR) 42.78p +2.10%
Millennium & Copthorne Hotels (MLC) 518.00p +1.97%

FTSE 250 - Fallers
Spectris (SXS) 1,709.00p -3.93%
Devro (DVO) 324.10p -3.54%
Regus (RGU) 103.50p -3.18%
Centamin (DI) (CEY) 104.00p -3.08%
Afren (AFR) 140.40p -2.84%
William Hill (WMH) 347.90p -2.69%
Domino Printing Sciences (DNO) 534.50p -2.64%
Yule Catto & Co (YULC) 152.50p -2.49%
Hikma Pharmaceuticals (HIK) 752.50p -2.27%
Cairn Energy (CNE) 281.20p -2.26%

BC

Related share prices
British American Tobacco (BATS) share price
BP (BP.) share price
Imperial Tobacco Group (IMT) share price
Aggreko (AGK) share price
Spectris (SXS) share price
Johnson Matthey (JMAT) share price
Antofagasta (ANTO) share price
Devro (DVO) share price
Randgold Resources Ltd. (RRS) share price
Fidessa Group (FDSA) share price
Petrofac Ltd. (PFC) share price
Fresnillo (FRES) share price