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Leading equities have managed to push ahead after a weaker start, but by lunchtime, the FTSE100 could still manage a gain of only 18.7 points at 6,234.7. Mid-cap stocks were much the same, with the FTSE250 index up 39 points at 10,314. Trading volume was relatively brisk however at £1.22bn.
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London equities were held back on Thursday, FT.Com reports, with banks under pressure after Barclays revealed net losses relating to strained credit markets. Britain’s third-biggest bank by market value stopped short of mounting a rights issue, saying it expected its tier 1 capital ratio to fall below the 5.1 per cent reported in June, but back at its 5.25 per cent target level “in time”.
Barclays said its exposure to to US mortgage backed securities was “actively managed” in the first quarter, and declined in the period. Overall, group level profit in the period fell year-on-year against strong comparitives and a backdrop of torrid capital markets. Shares in the bank fell 3.6 per cent to 412p.
News from France of a €5.9bn rights issue from Credit Agricole also held the spectre of the credit crunch over the wider financial sector. HBOS, which unveiled plans for a $4bn rights issue in April, lost 2.9 per cent to 456½p and RBS, which made a record £12bn cash call last month, fell 2.6 per cent to 266p. Alliance & Leicester fell 2.7 per cent to 433.8p.
The uncertain outlook for the UK economy and worries about pressure on consumer spending continued to undermine retailers. Sainsbury fell 2.5 per cent to 365p. SABMiller topped the leaderboard after its annual earnings beat forecasts. Shares in the brewer of Castle Lager and Peroni rose 2.8 per cent to £12.36.
Electrical goods retailer DSG International fell 9.8 per cent to 62½p after it cut its dividend and announced plans to close outlets in its Currys chain. Analysts at broker Panmure cut their rating on the stock to “sell” from “hold”.
Cadbury rose 5.3 per cent to 681.4p after an upbeat reaction to its first update since the separation of its confectionary and soft drink units. The maker of Dairy Milk chocolate said trading was strong and margins improving.
OVERSEAS MARKETS:
Overnight in New York, major indices rose as investors responded to relatively benign inflation data and digested better-than-expected earnings reports. the Dow Jones Industrial Average was 0.5 per cent higher at 12,898.38. The S&P 500 index was 0.4 per cent higher at 1408.66. Asian markets were led higher by Japan after strong earnings news from Sony. Tokyo’s Topix index rallied 1.8 per cent to 1,397.37.
DAILY TECHNICAL COMMENT
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MARKET DATA
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COMMODITIES:
Oil prices fell but recovered from the day's lows after a smaller than expected increase in US inventories, while rice and soyabeans both continued to post record highs. But corn and wheat prices were lower ahead of what is expected to be a solid harvest this year. Meanwhile, rising freight costs pushed the Baltic Dry Index up 2.85 per cent to show a gain of 92 per cent in the last year, as demand for commodity shipments pushed charter rates higher. Base metals were mostly lower with the exception of aluminium, while gold was flat.
| Commodity | Last Close |
|---|---|
| Gold London PM | $866.50oz |
| June Brent crude | $121.86/barrel |
| LME 3-mth Copper | $8,087.50/tonne |
| Baltic dry index (freight) | 10,649 |
| December carbon | €24.46/unit |
FOREIGN EXCHANGE:
Sterling showed no clear trend as investors digested the implications of the Bank of England's latest warning that inflation will be higher than expected and growth will be weaker than forecast. The news came at a time when US inflation came in lower than expectations, although there were a few raised eyebrows as the data included a 2 per cent drop in petrol prices.
| £1 EQUALS... |
|---|
| €1.256 |
| $1.945 |
| Sfr2.050 |
| ¥204.35 |
For a summary of company news announcements and a round-up of business press headlines, see our company news summary
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
