- All eyes on Bernanke
- Merkel asks Italy to delay bailout request
- Redrow Chairman makes takeover approach
The Footsie had moved into positive territory by Friday lunchtime following three straight days in the red, though gains were only mild as investors showed caution ahead of a pivotal speech by Federal Reserve Chairman Ben Bernanke later this evening.
The big question on everyone's lips - "will Bernanke hint at another imminent round of quantitative easing (QE3)?" - will be answered tonight as the Fed frontman takes the stage in his keynote speech during the meeting of central bankers at Jackson Hole, Wyoming.
"Two years ago at the same symposium, Bernanke dropped hints of QE2 which the Fed then announced a couple of months later. Given the backing in the previous minutes for further stimulus in the US, any hints Bernanke drops are expected to give an indication of how the Fed will act in September," explains analyst Craig Erlam from Alpari.
"Because of this, every word he speaks will be over analysed repeatedly. The likely effect of this won't be that we'll be any better informed on how the Fed will act. Instead, it's more likely to simply fill the headlines over the next couple of weeks," he said.
In other news, following the meeting between German Chancellor Angela Merkel and Italian Prime Minister Mario Monti in Berlin yesterday, Merkel has requested that Italy delays its request for aid, according to Spanish newspaper El Mundo. The reason being due to heightened tensions with the Bundesbank who is opposed to the European Central Bank's proposal of buying sovereign debt to bring down bond yields.
FTSE 100: Miners on the up after recent sell-off
Mining stocks were making gains this morning, rebounding after bearing the brunt of 'risk-off' trade over the past few days. Even including today's rally, average share prices
in the mining sector are down 3.4% over the week.
Potential merger partners Glencore and Xstrata were performing well in spite of Qatar Holdings' announcement yesterday that it would vote against the proposed tie-up at the shareholder meeting on September 7th. The Xstrata shareholder supports the tie-up but said that "it will not support the proposed merger terms of 2.8 new Glencore shares
for every one existing Xstrata share." The Qataris are wanting Glencore to raise the exchange ratio to 3.2.
Sector peers Fresnillo, Randgold and Antofagasta were also on the up by midday.
Heading the other way was media giant WPP which was extending its losses after having to scale back its full-year like-for-like revenue target yesterday. Societe Generale and Berenberg both reduced their target prices for the stock this morning.
Utilities group SSE was making gains after UBS upgraded its rating for the stock from 'neutral' to 'buy' and hiked its target price by 13% to 1,515p.
FTSE 250: Redrow rises, albeit mildly, on potential takeover
House-builder Redrow was in demand after saying that three investment firms are interested in a takeover, one of which is controlled by the company's Chairman and well-known businessman, Steve Morgan.
While the offer of 152p a share represents a 23.8% premium to the 90-day average share price, the stock has risen strongly in recent weeks on speculation, closing yesterday at 151p.
First-half profits at restaurant and pub operator Restaurant Group came in slightly ahead of expectations, helping the firm to raised its interim dividend by an eighth. Shares edged higher from the off.
FTSE 100 - Risers
Kazakhmys (KAZ) 606.00p +3.32%
Glencore International (GLEN) 368.25p +3.02%
Johnson Matthey (JMAT) 2,426.00p +2.88%
Weir Group (WEIR) 1,642.00p +2.56%
IMI (IMI) 862.50p +2.43%
Fresnillo (FRES) 1,580.00p +2.40%
Randgold Resources Ltd. (RRS) 6,325.00p +2.35%
Aggreko (AGK) 2,359.00p +2.34%
Xstrata (XTA) 922.10p +2.34%
Petrofac Ltd. (PFC) 1,495.00p +2.33%
FTSE 100 - Fallers
Carnival (CCL) 2,152.00p -1.51%
Whitbread (WTB) 2,127.00p -0.70%
WPP (WPP) 814.50p -0.49%
Admiral Group (ADM) 1,157.00p -0.43%
Centrica (CNA) 330.10p -0.42%
Sainsbury (J) (SBRY) 331.10p -0.42%
National Grid (NG.) 690.50p -0.36%
Severn Trent (SVT) 1,750.00p -0.34%
Next (NXT) 3,608.00p -0.28%
Hargreaves Lansdown (HL.) 616.00p -0.16%
FTSE 250 - Risers
Ferrexpo (FXPO) 167.40p +5.22%
Centamin (DI) (CEY) 79.15p +4.42%
Avocet Mining (AVM) 90.45p +4.27%
Cairn Energy (CNE) 285.60p +4.23%
Michael Page International (MPI) 364.20p +4.03%
Mondi (MNDI) 565.00p +3.86%
Heritage Oil (HOIL) 199.50p +3.64%
AZ Electronic Materials SA (DI) (AZEM) 311.20p +3.53%
New World Resources A Shares (NWR) 278.30p +3.50%
Ashtead Group (AHT) 285.00p +3.15%
FTSE 250 - Fallers
Bwin.party Digital Entertainment (BPTY) 94.95p -4.09%
JD Sports Fashion (JD.) 664.50p -3.06%
Gem Diamonds Ltd. (DI) (GEMD) 169.00p -2.37%
Ocado Group (OCDO) 60.35p -2.11%
Hochschild Mining (HOC) 431.10p -2.02%
Daejan Holdings (DJAN) 2,994.00p -1.67%
Dechra Pharmaceuticals (DPH) 498.50p -1.29%
Murray Income Trust (MUT) 662.50p -0.97%
Phoenix Group Holdings (DI) (PHNX) 491.30p -0.91%
Ruspetro (RPO) 123.00p -0.89%