FTSE LIVE: Investors get jitters about euro bond rescue plan

| September 25, 2012 | 0 Comments

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This Is Money Reporters

02:32 EST, 25 September 2012


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09:56 EST, 25 September 2012

14.40: Ex-Prime Minister Gordon Brown rang the bell to formally open the New York Stock Exchange today.

He showed a rare Midas touch, because the Dow Jones started 35.9 points higher at 13,594.9.

However, this might have had more to do with upbeat U.S. house price data which showed a fourth straight month of gains.

Back in London, the FTSE 100 is ahead 10 points at 5,848.8.

Midas touch? Ex-PM Gordon Brown was given the honour of ringing the opening bell on Wall Street today

Midas touch? Ex-PM Gordon Brown was given the honour of ringing the opening bell on Wall Street today

13.25:

Standard Chartered was among the fallers today after a media report that Singapore investment fund Temasek has sounded out possible buyers for its 18 per cent stake, worth a possible £6billion.

The prospect of a sale caused Standard’s shares to decline 51.5p to 1429p.

It was joined on the way down by BAE Systems as the prospect of prolonged political wranglings among European leaders over its £28billion merger with EADS removed some of the deal froth over the stock, which fell 5.15p to 329.45p.

And it was a poor session for pawnbroker Albemarle Bond after it warned that weakening gold buying volumes and margins would result in lower profits in the current financial year.

Shares slid 11 per cent, off 32.5p to 264p, even though results for the last financial year showed profits rose for the 21st year in a row, up 2 per cent to £21.4million.

Mining and industrial services firm Hargreaves Services dived 20 per cent after it warned that 105-year-old Maltby Colliery in Rotherham may have to close because of geological difficulties in developing a new coal face.

Chief executive Gordon Banham insisted the company was strong enough to absorb the cost of any closure but shares still fell 139p to 555p.

The FTSE 100 was down 0.75 points at 5,838.1, and stock futures also point to a flat open on the Dow Jones shortly.

Fawad Razaqzada, market strategist at GFT Markets, said shares on Wall Street tumbled into the close last night on renewed fears over the outlook for the eurozone.

‘Pockets of pessimism are very much in evidence as concern grows that the relevant parties are fighting a losing battle here, increasingly convinced that the debt crisis as it stands can never be resolved,’ he said.

‘Policy measures against Spain and Greece have been interpreted as simply kicking the can further down the road, meaning that an orderly break-up will be the only meaningful way out.’

U.S. consumer confidence data for September and house price figures for July are due out later, while cruise operator Carnival and leisure firm Vail Resorts issue corporate updates.

12.00:

A sluggish mood on the markets has left the Footsie trading flat – its down down 1.1 points at 5,837.8.

‘A combination of soft Chinese data and the overhanging issues facing the eurozone have prevented the FTSE from becoming too optimistic,’ said Alastair McCaig, market analyst at IG Markets.

‘The uncertainty over Spain’s bailout requirements is still the major concern and it now seems that the Spanish will try to drag this out until after they have had their local elections, a strategy that will undoubtedly be met with disdain by the German finance minister.

‘Last night IMF chief Christine Lagarde added her weight to the debate by highlighting the delays that have played a large part in Greece’s problems.’

Brent crude is trading at $110.38 and gold is at $1,767.10 an ounce.

10.00:

The FTSE 100 has got off to a lacklustre start, up 8.8 points at 5,847.6.

Shares have fallen back in recent days because of poor economic data out of Japan and China and continued uncertainty over efforts to solve the eurozone debt crisis.

A number of mining stocks suffered today, including Vedanta Resources with a decline of 4.5p to 1051.5p.

Guinness and Smirnoff drinks company Diageo featured on the risers board after it said it was in talks about buying a stake in India’s United Spirits. Shares were 20.25p higher at 1744.25p.

Outside the top flight, shares in Hornby came off the rails in spectacular fashion after it said the London Olympics had failed to deliver the expected boost to sales.

With the Scalextric and Corgi owner also facing supplier issues in China, shares slumped by 36 per cent, off 31.75p to 56.7p. Read more here.

It was also a poor session for pawnbroker Albemarle Bond after it warned that weakening gold buying volumes and margins would result in lower profits in the current financial year. Shares slid 10 per cent, off 30.1p to 266.4p.

‘The FTSE continues to see-saw, up a bit, down a bit, sideways a bit,’ said Simon Denham of Capital Spreads.

‘Clients remain rather bearish of indices in general and it doesn’t seem an unreasonable position to hold considering all the bad news that is out there at the moment.

‘Yet the markets remain well propped up by the recent action from central banks and so declines don’t seem to be following through with any meaningful lurch to the downside.’

8.30:

The FTSE 100 has opened up just 3.8 points at 5,842.7 as worries about the global economy and euro debt crisis continue to dampen stocks.

A new bond buying programme to buy the government debt of troubled single currency members is back in the spotlight, after German newspaper Bild reported that the European Central Bank and the German Bundesbank are getting lawyers to verify its legality.

They are reportedly checking both the size of the programme and how long it would have to last for it to breach EU treaties.

Investors will also watch a debt auction by Italy, which will try to sell up to €5.5billion of bonds today.

A four-month stock rally has lost steam over the past week, halted by grim economic data and Spain’s reluctance to request a bailout that would ease tensions over the region’s debt crisis.

The FTSE 100 closed down 13.78 points at 5,838.84 yesterday, having notched up a loss of 1.1 per cent last week after two consecutive weeks of gains.

Copper prices rebounded slightly from a one-week low hit in the previous session, but gains will be limited by worries about the global economy and caution ahead of next week’s holiday in top metals consumer China.

Brent crude climbed above $110 a barrel, recovering from a more than 1 per cent drop in the previous session, as escalating tensions surrounding Iran offset concerns about weak demand in a fragile global economy.

Market watch: Traders are worried about whether the ECB bond buying plan will resolve the debt crisis

Market watch: Traders are worried about whether the ECB bond buying plan will resolve the debt crisis

Stocks to watch today include:

Hornby: Toy firm Hornby warned over profits today after the Olympics proved a flop for sales of its London 2012 branded goods. Its shares plunged 39 per cent.

Glencore: The company has revised down its plan to boost its majority stake in Kazakh zinc producer Kazzinc, targeting an increase to just under 70 per cent in a deal that will involve less cash than the original agreement a year ago.

Standard Chartered: Singapore investment fund Temasek has sounded out potential buyers for its £6billion stake in Standard Chartered, the Financial Times reported.

BAE Systems: Germany has deep reservations about proposals to merge Airbus parent EADS and Britain’s BAE Systems, an official document showed.

Diageo: United Spirits said it was in talks with Diageo about a possible sale of a stake in the Indian company.

Close Brothers: The company said full-year adjusted operating profit rose 2 per cent to £34.2million.

Daily Mail General Trust: The company said the outcome for the year was in line with market expectations.

The comments below have not been moderated.

He rang the economic bell over here and brought the country to its knees what did he say no more boom bust.

peter
,

manchester,
25/9/2012 16:02

It’s a shame he didn’t know when to sell the UK’s gold reserves, I think his stupidity is now termed “brown’s bottom” , says it all really , I would say worst Prime Minister ever, but that lets Tony Blair off the hook to easily.

cricky
,

northampton,
25/9/2012 15:55

Oh God, I hate this guy, I hold him responsible for our economy, what is his excuse? He was chancellor then PM and deluded himself into believing he had got rid of boom and bust….. Only an idiot! Hope he stays in USA.

daz
,

Cheshire,
25/9/2012 15:31

So he is not as dumb as we thought ,he knows how to ring a bell ,just about his mark.

thenervoussurgeon
,

Pattaya,
25/9/2012 15:30

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