1630: Close Following the IMF's downgrade to growth forecasts today, markets are fretting about whether a poor economic outlook will take its toll on corporate profits. In the UK, miners put in a strong show of support, but it wasn't enough to prevent the FTSE ending the day firmly in the red. In economic news, UK industrial production fell 0.5% in August, in line with expectations. Output from the manufacturing sector, however, dropped at a 1.1% clip, almost twice what was expected. In other company news, retails were also performing quite well, with M&S rising on the back of positive comments from JP Morgan Cazenove. Heading the other way was outsourcing company Capita after Seymour Pierce downgraded its recommendation on the stock to 'hold'. The FTSE closed down
31 points at 5,810.
1507: The FTSE 100 is still firmly in the red after a subdued start on Wall Street. The Dow is flat, while the Nasdaq and S&P 500
are registering moderate losses as investors remain nervous ahead of the start of third-quarter corporate earnings season which kicks off this evening with Alcoa's results. Following the IMF's downgrade to growth forecasts today, markets are fretting about whether a poor economic outlook will take its toll on corporate profits.
1322: New reports are appearing denying that the proposed merger between BAE and EADS has failed.
1224: There are reports that the tie-up between BAE and EADS has failed, Bloomberg TV reports.
1032: Broker Seymour Pierce has also downgraded its view on Capita today, from buy to hold. This is what its analysts are saying: "We were not enthused by Capita's investor day yesterday which sought to provide an in-depth view of 5 of its divisions. There are now 13 under the new organizational structure which will take place from fiscal year 2013 and was announced yesterday. (...) We also heard about the company's acquisition strategy. The presentation did bring home the message that Capita has an increasingly diversified revenue base and acquisitions have been instrumental in helping Capita spread its wings. However, we were disappointed to hear that international expansion does not feature greatly in the company's plans. (...) The company made similar promises at its fiscal year 2010 results presentation before producing disappointing half year and full year results the following year." FTSE 100 down 19 to 5,823.
1020: The FTSE 100 is down 18 points at 5,823. Financials continue to trade mixed, with Lloyds making gains and RBS and Barclays registering losses. Barclays is down 0.4 per cent after announcing its intention to purchase the deposits, mortgages and business assets of ING Direct UK from Dutch finance house ING. Analyst Ian Gordon from Investec said this morning that the acquisition continues Barclays's trend of small, value-accretive, bolt-on retail acquisitions and while it is not transformational, it reflects 'another small step on the road back to fair value'. The broker maintained its 'buy' rating on the stock.
1011: Some market commentary is calling attention to the remarks from Turkish President Abdullah Gul to the effect that the worst-case scenarios between his country and Syria are now playing out.
0947: After a firm opening the top-share index is now in negative territory, with outsourcing giants Capita and Serco prominent among the laggards. Panmure Gordon has downgraded Capita after yesterday's investor day held by the outsourcing firm; Panmure Gordon is now a seller of the stock. Following yesterday's profits warning from sector peer Michael Page, shareholders in recruitment firm Hays will be relieved and pleased to see the stock top of the FTSE 250 after its trading update. Seymour Pierce has upgraded the stock to 'buy' and nudged up the price target to 85p from 80p. Jefferies Hoare Govett and Investec have retained their 'buy' ratings while Oriel Securities has reiterated its 'hold' recommendation. FTSE 100 is down 13 at 5,829.
0930: UK industrial production fell 0.5% in August,in line with expectations. Output from the manufacturing sector, however, dropped at a 1.1% clip, almost twice what was expected. Nevertheless, that still constitutes only a partial correction after the previous month´s out-sized increase. Furthermore, the data may have been distorted, ONS warns.
0815: London set about clawing back some of yesterday's losses at the outset but the rally is already running out of steam. Rio Tinto is one of the companies going well on the day it is holding an investor seminar. The mining giant is set to say at the seminar that its business remains resilient and is performing better than its peers in an uncertain environment. Rio Tinto expects China's stimulus packages to take effect progressively after the Chinese leadership change and has therefore lowered its estimates for Chinese gross domestic product growth this year to just below eight per cent. 'There are some positive signs on the European debt crisis and US quantitative easing although risks remain in both economies,' a statement from the company said. Rolls-Royce is lower despite announcing a contract win with the US Department of Defense to provide support for the F405 (Adour) engines that power the US Navy's T-45 training aircraft. FTSE is up 9 at 5,851.