Market overview: Footsie finishes higher, up by 20 points
Feb 09, 2012
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1630:Close Oil and gas sector related stocks led risers today on the top share index, although Schroders and Admiral did manage to sneak into the head of the pack towards the end of trading. For their part, Tate&Lyle, British Land and Rolls-Royce were amongst the worst in the Footsie. Icap also underperformed on reports that it is looking into the conduct of three of its staff in regards to an alleged manipulation of LIBOR. The above as news broke that Greece´s political leadership has managed to reach an agreement with the ´troika´ of public sector creditors.
The Bank of England´s decision to expand its asset repurchase programme came in as expected. However, there are some economists who believe that any further increase has now become a "finely balanced" affair. The European Central Bank loosened its collateral rules, as many wanted. Lastly, UK industrial production data for December trounced expectations in terms of month-on-month rates of change. In quarter-on-quarter terms, however, it came in weaker than the Office for National Statistics had anticipated in its preliminary GDP report for quarter four.
The data, nonetheless, is not expected to result in any downwards revisions to GDP estimates.
FTSE 100 up 20 to 5,895.
15:31 At the moment, oil and gas sector related stocks, such as Amec, Petrofac, BG and Tullow are registering the largest gains in the top share index. Oil prices have been given a lift by the Greek agreement and a bigger-than-expected fall in US jobless claims. Initial unemployment claims fell by 15,000 to 358,000 last week, while consensus estimates were for a figure of 370,000. Banks have also been outperforming for the better part of the day on the back of apparently positive news out from Greece and the ECB today. To be taken into account, JP Morgan and Jefferies have both reiterated their underweight recommendation on shares of Tate & Lyle, currently down 3% on the Footsie.
13:47 European Central Bank President Mario Draghi seems to have indicated that collateral rules for banks wishing to participate at the next so-called long-term refinancing operations will be eased so as to increase access for small and medium sized lenders.
13:08 The European Central Bank has opted to maintain its monetary policy settings unchanged, as expected. All eyes will now turn to the ECB President´s press conference, at 13:30pm. More significantly, the FT is reporting that Greece´s political leadership has finally been able to forge an agreement on the further austerity measures deemed necessary. FTSE 100 up 14 to 5,890.
12:02 The Bank of England´s monetary policy committee (MPC) has just announced its decision. It will increase the size of its asset repurchase program by £50bn to £325bn. That is as expected after the last inflation report forecast inflation to undershoot the Bank´s target of 2% by between 50 to 75 basis points. Yet as Barclays Capital was commenting this morning,"(...) in our opinion, today's MPC meeting will be an interesting sideshow. The main events are the ECB meeting as well as evolving headlines around Greece." FTSE 100 up 11 to 5,887.
11:31 FTSE 100 is up 20 at 5,896 as the market awaits the announcement from the Monetary Policy Committee at midday on the Bank of England's quantitative easing programme. Most pundits seem to think the committee will top up the asset purchase scheme by £50bn to £325bn. About one-third of the top-share index's constituents are in the red, and the five biggest laggards (Rolls-Royce, British Land, Tate & lyle, Hargreaves Lansdown and Rio Tinto) all released trading updates this morning. Diageo, another big hitter to release figures this morning, is also off the pace.
10:53 Shares prices seem to be in a holding pattern for the moment, ahead of this afternoon´s monetary policy decisions from the Bank of England and the European Central Bank, due out at 12pm and 12:45pm respectively. Tullow Oil has moved into the top spot on the Footsie, while Rolls Royce and British Land are leading fallers. The initial market reaction to what at first glance looks to be a much better than expected report on industrial production has been rather muted. Acting as a backdrop, reports have surfaced that the Eurogroup will not be taking any decisions on Greece tonight. FTSE 100 up 11 to 5,886.
09:12 UK stocks rose early on after Greek leaders agreed on a draft budget deal. Oil stocks are leading the rise with BG Group performing well after earnings before tax shot up by 40% on last year in the fourth quarter, helped by higher oil prices. Sector peers BP, Cairn Energy, Tullow Oil and Essar Energy were also in demand, buoyed by today's rise in brent crude prices. However, results/updates from Hargreaves Lansdown, Rio, Rolls-Royce, British Land, Diageo and Tate & Lyle disappointed with stocks on the fall. FTSE 100 up 23 at 5,899.
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