1630:Close Today saw shares
of FTSE-250 miner Bumi leap after major shareholder, the Bakrie Group, tabled an offer that could end their turbulent relationship. Luxury fashion chain Burberry was also a big riser after it said its situation had started to improve towards the end of the July-September quarter. Looking abroad, Standard & Poor's has downgraded Spain's long-term credit rating by two notches from 'BBB+' to 'BBB-', with a negative outlook. In positive news, initial weekly US jobless claims fell 30,000 to 339,000 (Consensus: 370,000), their lowest level in four years. Late on in the session, some market commentary was speculating on a possible delay to the introduction of Basel III. The FTSE 100 closed up 53 to 5,830.
1617: Some market commentary is speculating on a possible delay to the introduction of Basel III, Bloomberg TV reports.
1546: Goodbody Stockbrokers has initiated coverage of building-materials company Wolseley with a buy recommendation and a share-price target of 3,400p. These analysts believe the company is the best option in the European materials industry to bet on a recovery in the US construction sector. As an aside, the latest weekly reading on investor sentiment from AAII shows a rise in bearish sentiment to 38.8%, from 33.2% in the week before. The long-run average stands at 30%. To be had in account, these results are sometimes employed as a contrarian indicator. FTSE 100 up 65 to 5,842.
1330: Initial weekly US jobless claims fell 30,000 to 339,000 last week (Consensus: 370,000). There may be some problems with seasonal adjustment factors BLS says. Better than expected numbers nevertheless.
1250: This is what they are saying over at the FT Alphaville's Market Live blog about Bumi Plc: "There. That'll do. Cash is worth 67 per cent upside. We've got 33 per cent upside so far today." Coincidentally, such a rise -should it transpire- would take the company's shares right up towards technical resistance at 300p. For their part shares of Burberry are now bouncing back sharply but even so have yet to overcome the lower part of the bearish gap left behind on September 11th. Croda continues its bounce higher from its simple 200 day moving average. FTSE 100 up 37 to 5,814.
1153: Direct Line up 6.31 per cent in its stock market debut, not a terrific showing so far, comment analysts at Digital Look. Also of interest, UBS has today raised its price forecasts for gold and silver, writing that: "We believe gold is a structural buy and increase our 2012/13 price forecasts 10-20 per cent to 1700 dollar
per ounce and 1900 dollars per ounce, respectively; we also materially increase our silver price
forecasts (including the long-term price). Copper price estimates are raised 2 per cent/6 per cent in 2012/13. Iron ore is trimmed 5 per cent/2 per cent in 2012/13, and met-coal 5 per cent in 2012. We believe thermal coal has now largely rebalanced after widespread production cuts. FTSE 100 up 35 to 5,811.
1035: For now European equities are shrugging off the downgrade of Spain's credit rating. Ratings agencies have now become irrelevant? Well, for analysts at ING today's price action is more a function of the fact that Spanish sovereign debt was already trading at junk levels. Also worth noting, as part of the backdrop, the interest rate cuts carried out overnight by central banks in South Korea and Brazil. Furthermore, French consumer prices undershot analysts' expectations significantly in September, according to the latest data out this morning from the INSEE. FTSE 100 up 21 to 5,798.
0959: Shares of Bumi are now rocketing higher by almost 30% after a proposed transaction to proposed 'unwind the relationship between Bumi plc and the Bakrie Group interests and return Bumi plc and its shareholders, as far as is possible, to the position that existed before the series of transactions that aligned them in 2011 and deliver significant cash resources to Bumi plc and its shareholders.'
0941: This is what analysts at RBS have to say this morning on the whole BAE-EADS affair: "Event risk in the sector has been brought to the fore although Fitch did comment on how this failed deal emphasises the difficulties in achieving consolidation in the sector. Expect EADS to continue to look to diversify operations and seek a foothold in the US. While BAE stated that it won't look for another partner, there is speculation that the company, with its low price-earnings, strong cash flows and attractive business profile, could still be a takeover candidate, perhaps broken into distinct parts to avoid political hurdles."
0905: While traders rush to get back into Burberry after the fashion firm's reassuring update this morning, things are looking less healthy at the cheaper end of the high street. Newsagent WH Smith's trading update was completely overshadowed by the revelation that Kate Swann, the firm's highly regarded Chief Executive Officer, has served notice to quit. She will give up the newspaper round at the end of June next year. Meanwhile, Greggs, the fast food chain, has slumped after revealing like-for-like sales will remain negative in the final quarter of 2012. FTSE 100 is up 9 at 5,785.
0807: Footsie has opened barely changed. Luxury goods firm Burberry is back in fashion after its half-year update laid to rest some fears raised last month about a slow-down in sales at its retail chain. Second quarter like-for-like sales were sharply down on the first quarter but were at least positive. Royal Bank of Scotland is the worst performer early on after it announced the spin-off of its Direct Line insurance arm would be priced at 175p per share, in the bottom half of the indicated range of 160p - 195p. FTSE 100 is down 1 at 5,776.