- Slight fall in Footsie
- Lloyds dives on PPI bill update, dividend plans
- Chinese data just in line
- Eurozone manufacturing may relieve pressure on ECB, some say
The FTSE 100 was dipping slightly into the red come midday, buoyed by its proximity to important levels of so-called 'technical support'.
That followed a weak finish to the week last Friday, on Wall Street, and rather heavy selling overnight, in Tokyo.
Data released overnight on China's manufacturing sector printed in line with economists´ forecasts, but some market watchers continued to be at least slightly nervous as regards the risks for a more pronounced slowdown in the Asian giant´s economy.
In its latest edition The Economist sided with the optimists when it came to worries about China and the recent ructions in emerging markets. However, the magazine admitted that there was a certain danger - and tendency - for fears about emerging markets to be 'self-fulfilling'.
On the positive side of things, it pointed out how the majority of those countries now have floating exchange rates, high levels of international reserves and current account deficits which, for the most part, were below 5% of Gross Domestic Product. Those economies should therefore be better positioned to cope with a normalisation in interest rates Stateside.
Similarly, the latest edition of the FT Weekend pointed out in an editorial that the risk of 'contagion' from emerging markets to developed ones was limited. That was particularly unlikely to occur through international trade linkages, it said, as exports to emerging markets by the West still represented only a tiny portion of overseas sales.
The risk of financial contagion, however, was more severe. Even so, the exposure of banks in high-income countries to emerging markets - while relatively high - was not overly concentrated. Despite that, the risk of 'panics' could not be completely dismissed, the newspaper said.
Acting as a backdrop, a raft of data and central bank meetings were expected throghout the coming week, culminating in Friday´s jobs report Stateside.
BoE expected to move first by some
Ahead of the Monetary Policy´s Committee this week Bloomberg reports that Bank of England (BoE) Governor Mark Carney is expected to raise interest rates before the European Central Bank (ECB) and the US Federal Reserve, citing economists at Citigroup and Nomura.
The analysts said the strongest growth since 2007 will prompt the UK's central bank to lift its record low benchmark rate of 0.5% as early as this year.
Morgan Stanley sees the BoE lifting rates in the second quarter of 2015 and the Fed increasing in 2016.
On the company front, Randgold Resources was a strong riser after it said it hit targets for 2013, boosted gold production to a new record level and expects output to rise over the next five years. Production for the quarter and year to December rose 20% and 15% respectively, ahead of some analysts´ forecasts. Cash costs, a widely tracked metric, fell by 5% versus the previous quarter.
Shares in Lloyds were at the bottom of the pile after the group revealed its payment protection insurance (PPI) bill had soared by a further £1.8bn to nearly £10bn, and despite predicting its full-year underlying profits would be almost double that predicted by analysts. Some analysts were irked by the lender's announcement that it will seek approval to commence dividend payments at a 'modest' level.
Shares in Vodafone were amongst the day´s worst performers, with a fair bit of market commentary concentrating on the fact that Thursday´s trading update would show a company which is having to deal with a big fall in overseas revenues because of the problems afflicting emerging markets. Three of those makets happen to be where the telecoms operator has a heavy presence: India, South Africa, Turkey.
Rexam was higher after proposing the sale of the Pharmaceutical Devices and Prescription Retail Packaging divisions of its Healthcare business for $805m. The consumer packaging company said Montagu Private Equity has made a binding offer for the divisions. The transaction is subject to regulatory approval and is expected to be completed around mid-2104.
BBA Aviation climbed after saying it sold APPH, a full-service landing gear and hydraulic sub-systems supplier, and announced it was considering a cash return to shareholders. The business, which had formed part of BBA's Aftermarket Services division, was sold for $128m, the $120.6m proceeds of which would be use to reduce the group's debt level.
Medical technology company Smith & Nephew rose after it agreed to buy medical device company ArthroCare Corp. The group will pay $1.7bn, or $48.25 per ArthroCare share in cash, representing an enterprise value of $1.5bn.
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 4,315.00p +2.91%
Weir Group (WEIR) 2,147.00p +2.53%
BG Group (BG.) 1,043.00p +2.05%
Sage Group (SGE) 416.40p +1.98%
Rexam (REX) 502.50p +1.93%
Petrofac Ltd. (PFC) 1,176.00p +1.82%
Reckitt Benckiser Group (RB.) 4,644.00p +1.78%
Travis Perkins (TPK) 1,768.00p +1.67%
Fresnillo (FRES) 779.00p +1.23%
GlaxoSmithKline (GSK) 1,582.00p +1.15%
FTSE 100 - Fallers
Lloyds Banking Group (LLOY) 80.60p -3.24%
Aberdeen Asset Management (ADN) 383.30p -1.92%
Vodafone Group (VOD) 222.40p -1.83%
Burberry Group (BRBY) 1,424.00p -1.66%
Standard Life (SL.) 359.80p -1.59%
Barclays (BARC) 268.25p -1.56%
ARM Holdings (ARM) 921.50p -1.44%
Schroders (SDR) 2,434.00p -1.34%
WPP (WPP) 1,261.00p -1.25%
Prudential (PRU) 1,213.00p -1.22%
FTSE 250 - Risers
EnQuest (ENQ) 134.80p +4.09%
BBA Aviation (BBA) 316.70p +2.62%
BH Global Ltd. USD Shares (BHGU) 11.79 +2.34%
SIG (SHI) 200.60p +2.24%
RPC Group (RPC) 606.00p +1.85%
Polymetal International (POLY) 587.50p +1.73%
Hansteen Holdings (HSTN) 107.80p +1.70%
Ferrexpo (FXPO) 154.50p +1.64%
Centamin (DI) (CEY) 44.81p +1.61%
Spectris (SXS) 2,257.00p +1.58%
FTSE 250 - Fallers
Kenmare Resources (KMR) 16.50p -5.71%
Rotork (ROR) 2,383.00p -3.21%
ITE Group (ITE) 266.70p -2.38%
Essar Energy (ESSR) 56.45p -2.17%
Homeserve (HSV) 322.20p -1.65%
Evraz (EVR) 84.00p -1.64%
888 Holdings (888) 140.70p -1.54%
Cable & Wireless Communications (CWC) 52.65p -1.50%
De La Rue (DLAR) 769.50p -1.47%
Jupiter Fund Management (JUP) 368.30p -1.47%