The mood on the stock markets was cautious on Wednesday morning as traders digested a barrage of economic announcements, corporate earnings and a key speech by David Cameron. The FTSE 100 managed to stay in positive territory after a strong start, albeit only just.
UK Prime Minister David Cameron's much-anticipated 'in-or-out-case' speech on Britain's membership in the European Union didn't really move markets this morning. He committed his party to holding a referendum on whether the UK should remain in the EU in the first half of the next parliament (by the end of 2017 at the latest). "It is time for the British people to have their say; it is time to settle this question over Britain and Europe," Cameron said.
Financial trader Shavaz Dhalla from Spreadex said this morning that Cameron's speech "proved futile". He said: "European markets took the speech in their stride and digested enough information to gauge that the speech was probably designed to build momentum for Cameron's next campaign rather than mount a serious economic backing for whether remaining in the EU is worthwhile."
London's FTSE 100 started the day positively with moderate gains after both Google and IBM impressed the US market late last night with better-than-expected fourth-quarter results. Markets will likely be keeping a close eye on results from McDonald's and Apple later on.
However, the focus of the market today is now likely to be the US House of Representatives vote on whether to extend the government's debt ceiling until May 19th. A White House spokesman said that President Barack Obama "won't stand in the way" of this short-term fix.
"European investors are currently holding back from building risk, in wait for more corporate earnings and US lawmakers kicking the can down the road by voting on a three-month extension on raising the debt ceiling," said market strategist Ishaq Siddiqi from ETX Capital.
BoE in wait-and-see mode
Minutes from the latest Bank of England policy meeting showed that members voted eight-to-one in favour of leaving the asset purchase programme unchanged at £375bn. The Monetary Policy Committee (MPC) voted unanimously to keep the Bank Rate at 0.5%.
Analyst Chris Crowe from Barclays Research said that the MPC is "still content to wait and see" with the committee "likely to resist expanding QE as long as the economy shows signs of stabilisation and improvement."
In other news, the UK jobless rate fell from 7.8% to 7.7% in the three months to November, better than the consensus estimate for no change. The UK claimant count fell by 12,100 in December to 1.56m, the lowest since June 2011.
FTSE 100: TUI Travel falls after TUI quashes bid speculation
Travel and leisure group TUI Travel was a heavy faller this morning after its Germany parent company TUI AG said it has no intention of making an offer. TUI Travel said last week that it had received an approach from TUI AG, which owns a 56.4% stake in the firm.
Utilities group SSE and contract caterer Compass were also in the red after going ex-dividend this morning.
Consumer products titan Unilever was on the rise after double-digit growth in emerging markets helped push its turnover past the €50bn-mark in 2012. Revenue growth was 10.5% last year.
Real estate investment trust Land Securities edged lower despite saying that the third quarter saw a "strong operating performance across our investment portfolio".
Business software firm Sage was subdued after an in-line trading statement. The group said that revenue trends had varied across its geographies, with good growth seen in the UK and Ireland and challenging conditions noted in mainland Europe.
Diversified mining giant BHP Billiton was wanted after saying it expects to deliver a compound annual growth rate of 10% in copper equivalent terms over the next two years.
Luxury brand Burberry fell after it was revealed that the President of its Asia Pacific division sold £410,040-worth of shares
FTSE 250: EnQuest up after acquisition
Oil and gas group EnQuest was in demand after agreeing with CIECO Energy UK to acquire two of its affiliate companies which together hold a total of 8% non-operated interest in the producing oil field Alba.
High Street retailer WH Smith fell after reporting a 40% decline in total sales in the 20 weeks to January 20th. However, gross margin improved in the period in line with plan and costs were tightly managed, reflecting the trading conditions, according to the group.
FTSE 100 - Risers
Unilever (ULVR) 2,521.00p +2.86%
Tullow Oil (TLW) 1,181.00p +2.25%
Evraz (EVR) 312.70p +1.89%
Petrofac Ltd. (PFC) 1,731.00p +1.82%
Intertek Group (ITRK) 3,071.00p +1.76%
Randgold Resources Ltd. (RRS) 6,115.00p +1.58%
Standard Chartered (STAN) 1,662.00p +1.53%
Carnival (CCL) 2,600.00p +1.44%
BHP Billiton (BLT) 2,106.00p +1.20%
Polymetal International (POLY) 1,066.00p +1.04%
FTSE 100 - Fallers
TUI Travel (TT.) 279.80p -4.21%
SSE (SSE) 1,399.00p -2.51%
ITV (ITV) 112.90p -2.17%
Compass Group (CPG) 743.50p -2.11%
Fresnillo (FRES) 1,689.00p -2.09%
Burberry Group (BRBY) 1,344.00p -1.61%
Old Mutual (OML) 184.10p -1.34%
International Consolidated Airlines Group SA (CDI) (IAG) 208.90p -1.28%
Lloyds Banking Group (LLOY) 52.21p -1.15%
British American Tobacco (BATS) 3,189.00p -1.13%
FTSE 250 - Risers
Afren (AFR) 144.00p +3.45%
EnQuest (ENQ) 128.10p +2.97%
Stobart Group Ltd. (STOB) 100.00p +2.88%
Daejan Holdings (DJAN) 3,059.00p +2.75%
London & Stamford Property (LSP) 110.60p +2.50%
Kenmare Resources (KMR) 34.75p +2.21%
Bumi (BUMI) 331.40p +2.13%
Victrex (VCT) 1,608.00p +1.90%
JD Sports Fashion (JD.) 750.86p +1.74%
Renishaw (RSW) 1,880.00p +1.73%
FTSE 250 - Fallers
Galliford Try (GFRD) 780.00p -4.29%
Bovis Homes Group (BVS) 607.00p -3.65%
Taylor Wimpey (TW.) 70.95p -3.14%
TalkTalk Telecom Group (TALK) 234.10p -2.78%
Man Group (EMG) 93.90p -2.59%
Redrow (RDW) 187.60p -2.44%
Bellway (BWY) 1,081.00p -2.44%
Big Yellow Group (BYG) 372.90p -2.36%
Barratt Developments (BDEV) 221.30p -2.34%
Investec (INVP) 451.80p -2.31%