- Miners dominate fallers on FTSE 100
- ARM and Experian lead the upside
- Markets look ahead to FOMC
Mining stocks were providing a drag on the Footsie on Tuesday morning as concerns over the global economy spurred a move away from risk; meanwhile, markets remained cautious ahead of a two-day policy meeting from the Federal Open Market Committee (FOMC).
"We're not expecting anything major to come from this month's meeting, however we could get some hints of what to expect in the coming months. For example, Operation Twist expires at the end of this year and last month the Fed claimed there would be further asset purchases if they did not see a substantial improvement in the economy," said market analyst Craig Erlam from Alpari.
Worries about Spain have increased over the last few days after a decent outcome at the regional elections for Prime Minister Mariano Rajoy is thought to have reduced the pressure on him to request a bailout.
Ratings agency Moody's downgraded five Spanish regions to 'junk' today due to the "deterioration in their liquidity positions, as evidenced by their very limited cash reserves as of September 2012 and their significant reliance on short-term credit lines to fund operating needs."
Markus Huber, head of German HNW Trading at ETX Capital, said this morning: "While so far the downgrade of the five regions had a fairly limited impact on the markets, traders are still expected to keep a close eye on periphery yields today with any spike to the upside most likely to hit stock markets too."
Nevertheless, with few economic data on the agenda today, US corporate earnings will continue to take centre stage with many constituents of the Dow Jones scheduled to report.
"Range trading will most likely continue with further losses possible as stocks are struggling to find any positive news that would give them a new push to the upside, however downside potential should be limited as similar as seen yesterday in the US bargain hunting is likely to set in as traders take advantage of cheaper prices," Huber said.
FTSE 100: Miners offset gains for ARM and Experian
Heavyweight mining stocks were firmly in the red today as metals prices fell.
Gold fell to a six-week low on the back of a stronger dollar
this morning. Silver and platinum prices were also down. Meanwhile, investors showed caution ahead of a 'flash' survey of China's manufacturing sector on Wednesday. Kazakhmys, Anglo American, ENRC, Rio Tinto, Glencore and Xstrata were heavy fallers, followed by luxury brand Burberry, a stock sensitive to swings in the Chinese economy.
Leading the upside was chip designer ARM Holdings after beating forecasts in the third quarter and giving a confident outlook for the rest of the year. The semiconductor intellectual property group said that total revenue in the three months to September 30th rose 20% in sterling terms from £120.2m to £144.6m, ahead of the consensus estimate of £140m.
Information services firm Experian also jumped after increasing its holding in Serasa, Brazil's leading personal credit checker.
Whitbread disappointed despite first-half revenues topping the one-billion-pound mark. "Whitbread's H1 was marginally behind our estimates and there is no impetus from the trading outlook statement to warrant a FY13E forecast increase," said Investec analyst James Hollins.
Building materials group CRH was a heavy faller after HSBC downgraded its rating on the stock to 'neutral'. Consumer products firm Unilever was also lower after Oriel Securities cut its recommendation to 'hold'.
Banking group Lloyds was under the weather this morning. Credit Suisse reiterated its 'neutral' rating for the lender ahead of its third-quarter results on November 1st. The broker said that "given recent strength the stock should give back some of the gains".
FTSE 250: Chemring drops after CEO exit
Shares in defence group Chemring dropped after its CEO David Price resigned with immediate effect. He will be replaced by Mark Papworth, a former Wood Group executive.
Wireless technology firm CSR jumped after revenues were up in the third quarter as it said it had successfully completed a deal with Samsung, paving the way for a big investor pay out.
Morgan Crucible, the British maker of ceramics used in wind-turbine blades, was in demand on speculation that it has become a potential takeover target.
In small caps news, upmarket handbags and leather accessories group Mulberry plunged after its said that full-year revenues would be below expectations.
FTSE 100 - Risers
ARM Holdings (ARM) 629.00p +5.80%
Experian (EXPN) 1,088.00p +3.92%
Wolseley (WOS) 2,676.00p +0.56%
Centrica (CNA) 327.80p +0.55%
National Grid (NG.) 707.00p +0.21%
Severn Trent (SVT) 1,666.00p +0.18%
British Sky Broadcasting Group (BSY) 725.00p +0.14%
Tesco (TSCO) 315.45p +0.13%
United Utilities Group (UU.) 723.50p +0.07%
Pennon Group (PNN) 728.50p -0.07%
FTSE 100 - Fallers
Kazakhmys (KAZ) 723.00p -4.43%
Burberry Group (BRBY) 1,123.00p -4.18%
Eurasian Natural Resources Corp. (ENRC) 335.90p -2.86%
Rio Tinto (RIO) 3,107.50p -2.71%
Anglo American (AAL) 1,858.00p -2.65%
Weir Group (WEIR) 1,733.00p -2.53%
Glencore International (GLEN) 341.40p -2.53%
Antofagasta (ANTO) 1,276.00p -2.52%
Johnson Matthey (JMAT) 2,223.00p -2.50%
Xstrata (XTA) 969.40p -2.35%
FTSE 250 - Risers
CSR (CSR) 348.90p +3.01%
Morgan Crucible Co (MGCR) 244.90p +2.21%
Paragon Group Of Companies (PAG) 244.30p +1.62%
Shanks Group (SKS) 81.20p +1.50%
Barr (A.G.) (BAG) 449.20p +1.31%
Savills (SVS) 407.80p +1.27%
JD Sports Fashion (JD.) 765.00p +1.19%
COLT Group SA (COLT) 119.70p +0.84%
Dunelm Group (DNLM) 680.50p +0.81%
NMC Health (NMC) 187.00p +0.75%
FTSE 250 - Fallers
Chemring Group (CHG) 317.80p -8.23%
Kenmare Resources (KMR) 39.61p -7.41%
Centamin (DI) (CEY) 99.50p -4.33%
Lonmin (LMI) 486.90p -3.96%
Talvivaara Mining Company (TALV) 131.00p -3.82%
Man Group (EMG) 78.50p -3.03%
Homeserve (HSV) 232.20p -2.89%
Home Retail Group (HOME) 104.50p -2.61%
PayPoint (PAY) 756.50p -2.13%
Hikma Pharmaceuticals (HIK) 736.50p -2.13%