- Xstrata shareholders approve merger with Glencore
- Hamas official says ceasefire has been agreed
- Eurogroup meeting on Greece kicks off in Brussels
After a poor start on Tuesday, UK stocks rallied in afternoon trade to finish broadly flat after shareholders approved the merger between FTSE 100 constituents Xstrata and Glencore; meanwhile, reports of easing tensions in the Middle East could have helped to lift sentiment late on.
Hamas official Ayman Taha said this afternoon that Israel and Gaza militants have agreed on a ceasefire. He said: "An agreement for calm has been reached. It will be declared at nine o'clock (19:00 GMT) and go into effect at midnight (22:00 GMT)." However, Israeli government spokesman Mark Regev told CNN this afternoon that the "ball is still in play" and a deal has not been finalised.
The FTSE 100 closed only slightly higher this afternoon though, following an impressive 2.36% surge the day before on the back of increased hopes that US politicians will be able to deal with the 'fiscal cliff' before automatic spending cuts and tax increases come into effect at the start of 2103.
Markets started on the back foot this morning as investors reacted to the news that Moody's last night stripped France of its prized 'AAA' rating. The US rating agency said that the move was due to "the risk to economic growth, and therefore to the government's finances, posed by the country's persistent structural economic challenges."
Analyst Michael Hewson from CMC Markets said this afternoon: "Markets have pretty much taken this in their stride given that Moody's isn't telling the markets anything they don't already know, however markets have drifted off their highs, as yesterday's blind optimism gives way to some more pragmatic caution, ahead of this evening's Eurogroup meeting on Greece."
Eurozone finance ministers are meeting in Brussels to discuss whether or not to release the next tranche of aid for Greece. However, minutes before the start of the meeting, Eurogroup President Jean-Claude Juncker claimed not to be entirely sure that a deal would take place tonight.
"We must still reach an understanding on several details and I would expect that the chances are good that we will come to a final and joint solution this evening. But I'm not entirely certain [...] about the matter," he said.
FTSE 100: Xstrata gains after shareholder vote
Mining group Xstrata finished the day as one of the best performers on the Footsie after shareholders approved a multibillion-pound merger with commodities trader Glencore. However, its Chairman Sir John Bond announced that he would retire after the completion of the merger after shareholders did not give the green light to the proposed retention arrangements for management. Glencore finished with mild gains today.
Chip designer ARM Holdings was a heavy faller after Raymond James downgraded the stock from 'strong buy' to 'outperform'. In contrast, analysts at Barclays raised their view of hotels giant Intercontinental Hotels to 'overweight', prompting shares
to rise throughout the day.
Shares in luxury brand Burberry got a boost after it was reported on Bloomberg TV that the company is likely to be able withstand the slowdown in China.
Banking peers Barclays and HSBC were lower after Andrew Bailey, the head of banking supervision at the FSA, said that banks should face the threat of being broken up if they do not comply with proposals to ring-fence retail and riskier operations.
Imperial Tobacco and British American Tobacco both fell after the Australian government blocked a request for the World Trade Organisation to investigate the companies' claims that it, the Australian government, unlawfully seized their (and a number of other companies') intellectual property. Australia banned the sale of cigarettes sold in packaging containing trademarks. The country will not be able to block a second request.
FTSE 250: Lonmin and Homeserve surge
Platinum miner Lonmin was a high riser after shareholders yesterday voted in favour of a 817m dollar
rights issue to repair its balance sheet.
Strong growth internationally saw home emergency repairs group HomeServe achieve a decent increase in revenue and profit in the first half despite a slight fall in customer numbers over the period, pushing shares higher today.
easyJet was flying high after delivering forecast-beating record profits boosted by higher margins and increased passenger numbers.
LED manufacturer Dialight surged after saying that it has received a major order from an unnamed US power plant operator for over 1,000 LED lighting fixtures.
Meanwhile, Paragon Group shares took a hit despite the fact the company produced record profits for the full year, enabling a 50% hike in its dividend and the promise of a progressive payout policy.
FTSE 100 - Risers
Xstrata (XTA) 986.60p +3.11%
Burberry Group (BRBY) 1,247.00p +2.72%
InterContinental Hotels Group (IHG) 1,633.00p +2.70%
International Consolidated Airlines Group SA (CDI) (IAG) 167.60p +2.57%
Antofagasta (ANTO) 1,254.00p +2.28%
Prudential (PRU) 889.00p +2.13%
Aggreko (AGK) 2,160.00p +1.89%
Shire Plc (SHP) 1,759.00p +1.85%
Fresnillo (FRES) 1,980.00p +1.75%
Johnson Matthey (JMAT) 2,325.00p +1.62%
FTSE 100 - Fallers
ARM Holdings (ARM) 726.50p -2.74%
Meggitt (MGGT) 375.60p -1.37%
Imperial Tobacco Group (IMT) 2,428.00p -1.30%
Barclays (BARC) 246.50p -1.30%
Anglo American (AAL) 1,694.00p -0.96%
RSA Insurance Group (RSA) 111.20p -0.89%
Sainsbury (J) (SBRY) 332.70p -0.86%
HSBC Holdings (HSBA) 614.50p -0.61%
Old Mutual (OML) 170.10p -0.53%
British Sky Broadcasting Group (BSY) 749.50p -0.53%
FTSE 250 - Risers
Lonmin (LMI) 310.70p +13.42%
Homeserve (HSV) 247.90p +11.17%
Dialight (DIA) 1,136.00p +6.67%
easyJet (EZJ) 692.00p +6.05%
Diploma (DPLM) 468.80p +4.60%
COLT Group SA (COLT) 107.00p +4.39%
IP Group (IPO) 112.80p +3.96%
Menzies(John) (MNZS) 602.50p +3.88%
Anite (AIE) 135.00p +3.85%
Atkins (WS) (ATK) 762.00p +3.67%
FTSE 250 - Fallers
Talvivaara Mining Company (TALV) 105.70p -5.79%
Paragon Group Of Companies (PAG) 240.70p -3.72%
Daejan Holdings (DJAN) 2,760.00p -3.60%
Dunelm Group (DNLM) 622.50p -2.96%
Mitie Group (MTO) 271.80p -2.93%
Pace (PIC) 177.80p -2.68%
Big Yellow Group (BYG) 323.60p -2.24%
TalkTalk Telecom Group (TALK) 216.20p -2.22%
Bumi (BUMI) 267.80p -2.19%
Workspace Group (WKP) 298.70p -1.97%