- Stocks nervous after US corporate earnings
- Markets cautious ahead of US GDP
- Anglo advances on CEO exit
The FTSE 100 index declined in early trading on Friday as markets showed caution ahead of a pivotal gross domestic product (GDP) report due out in the US this afternoon.
The report, scheduled for realise at 13:30 (London time), is expected to see the US economy expand at an annualised rate of 1.9% in the third quarter, an acceleration from the 1.3% growth in the preceding three months.
However, sentiment was dampened overnight after corporate earnings for some American heavyweight disappointed over night - specifically Apple and Amazon.
Markus Huber, the head of German HNW at ETX Capital said this morning: "So far as a whole the US earnings season has turned out mixed at best, despite expectations coming into the reporting season had already been reduced substantially many especially heavyweights like Google, IBM and Apple haven't been able to live up to expectations.
"At least so far it seems to be the case that the recent improvement seen in some of the US economic data [...] hasn't completely filtered through to the corporate sector yet; also with other parts of the world - mainly China and especially Europe - still struggling badly, many of those global companies are expected to 'suffer' under the harsh business environment for at least a couple more quarters," Huber said.
Stocks finished flat the day before despite a better-than-expected reading in UK GDP: the UK economy expanded by 1.0% in the third quarter, compared with the 0.4% decline seen in the second quarter and well ahead of the 0.6% increase expected. That was the strongest reading since late 2007 and means that the economy exited from its double-dip recession.
In other news, Greece is thought to be close to agreeing a deal with the Troika which should then be voted on by parliament.
Market analyst Craig Erlam from Alpari explained: "The deal appears to centred around the idea that Greece will have an extra two years to hit its fiscal targets, something Germany has refused to confirm at this point. There is still no guarantee it will be signed off by Greece's creditors, however they are likely to respect the Troika's report."
FTSE 100: Banks take a hit on LIBOR probe
Banking stocks were under pressure this morning after The Wall Street Journal reported last night that the probe into the manipulation of the London Interbank Offered Rate (LIBOR) has spread to nine more banks.
These nine, which include Lloyds, Credit Suisse and Bank of America, have received subpoenas in connection with a probe, the paper said citing a person close to the matter. In London, Lloyds, RBS and Barclays were among the worst performers.
Pharmaceuticals giant Shire was a heavy faller despite Deutsche Bank, UBS and Credit Suisse reiterated their 'buy' and 'overweight' ratings on the stock this morning. Shares were pulling back after a solid rise yesterday on the back its third-quarter results.
Leading the risers was diversified mining titan Anglo American after announcing that it is on the look out for another CEO after Cynthis Carroll revealed her decision to resign. "It is a very difficult decision to leave, but next year I will be entering my seventh year as Chief Executive and I feel that the time will be right to hand over to a successor who can build further on the strong foundations we have created," she said.
FTSE 250: Elementis sinks on oilfield drilling slowdown
Speciality chemicals group Elementis was a heavy faller after saying that full-year headline operating profits will be hit by a temporary slowdown in oilfield drilling. Nevertheless, the group said it remains on track to hit earnings per share (EPS) forecasts this year due to a lower tax rate.
African Barrick Gold also dropped after scaling back its production guidance for the full year following a "challenging" third quarter which saw output and sales shrink dramatically year-on-year.
Berendsen, the work-wear and wash-room facilities provider, also fell after reporting that trading in the three months to the end of September was in line with expectations with group underlying revenue up 2%.
FTSE 100 - Risers
Weir Group (WEIR) 1,732.00p +2.61%
Anglo American (AAL) 1,891.50p +1.83%
Pearson (PSON) 1,234.00p +1.82%
British Sky Broadcasting Group (BSY) 723.00p +0.42%
Sainsbury (J) (SBRY) 354.80p +0.37%
Associated British Foods (ABF) 1,380.00p +0.36%
Admiral Group (ADM) 1,108.00p +0.36%
Morrison (Wm) Supermarkets (MRW) 271.10p +0.33%
Bunzl (BNZL) 1,024.00p +0.29%
InterContinental Hotels Group (IHG) 1,551.00p +0.26%
FTSE 100 - Fallers
Kazakhmys (KAZ) 713.50p -3.06%
Shire Plc (SHP) 1,727.00p -2.37%
Aviva (AV.) 327.00p -1.86%
Eurasian Natural Resources Corp. (ENRC) 327.30p -1.83%
Rio Tinto (RIO) 3,048.00p -1.68%
Lloyds Banking Group (LLOY) 40.05p -1.59%
Fresnillo (FRES) 1,900.00p -1.55%
CRH (CRH) 1,097.00p -1.53%
Prudential (PRU) 840.00p -1.52%
Polymetal International (POLY) 1,092.00p -1.44%
FTSE 250 - Risers
NMC Health (NMC) 189.70p +3.10%
JD Sports Fashion (JD.) 775.00p +3.06%
Diploma (DPLM) 484.70p +2.15%
Computacenter (CCC) 376.90p +1.95%
Utilico Emerging Markets Ltd (DI) (UEM) 163.90p +1.17%
Oxford Instruments (OXIG) 1,352.00p +1.12%
Barr (A.G.) (BAG) 447.90p +1.06%
Raven Russia Ltd (RUS) 67.40p +1.05%
Cairn Energy (CNE) 278.40p +0.80%
BH Global Ltd. GBP
Shares (BHGG) 1,135.00p +0.80%
FTSE 250 - Fallers
Elementis (ELM) 204.90p -5.58%
Lonmin (LMI) 483.00p -3.03%
Centamin (DI) (CEY) 97.00p -2.71%
African Barrick Gold (ABG) 469.20p -2.55%
F&C Asset Management (FCAM) 99.00p -1.98%
Ferrexpo (FXPO) 190.30p -1.91%
Bodycote (BOY) 364.20p -1.59%
Pace (PIC) 167.30p -1.59%
SIG (SHI) 105.10p -1.59%
Ashtead Group (AHT) 356.80p -1.57%