LONDON (ShareCast) – 1630: Close The FTSE 100 ended today’s session flat as investors digested a raft of data from both home and abroad. The UK service sector showed a slight dip on the month before, although optimism was its highest since March 2010. Meanwhile, a Lloyds survey revealed UK business confidence has reached its strongest level in 20 years. This afternoon the PRA and FCA both confirmed that they are to launch formal investigations into the troubled Co-operative Bank. Elsewhere, German Chancellor Angela Merkel has been forced to call off a number of official engagements at a crucial time for the governement after breaking her pelvis in a cross-country skiing accident. RSA was the biggest riser following a ‘buy’ rating from UBS (Xetra: UB0BL6 – news) . The FTSE closed 0.06 points higher at 6,730.73.

1509: “The fact that the valuation of the US stock market is already high compared to its long-run averages on the cyclically-adjusted price/earnings (CAPE (LSE: CIU.L – news) ) measure is a good reason to be wary of forecasting further large gains in equity prices. Nonetheless, the CAPE has many limitations, especially in timing market calls. The current readings are also still well below previous extremes. We do not therefore believe that the CAPE provides compelling evidence of another bubble about to burst,” analysts at Capital Economics wrote to clients on Monday.

1500: The December ISM service sector purchasing managers´ index slipped to 53 from 53.9 in the month before and counter to forecasts for a rise to 54.5. The new orders gauge plummeted by 7 points to 49.4, indicating a contraction. “Despite the substantial decrease in the New Orders Index, respondents’ comments predominately reflect that business conditions are stable,” the ISM said.

1456: Shares in both easyJet and IAG have moved up the leaderboard, possibly ahead of the release, tomorrow, of both companies´ latest traffic statistics. FTSE 100 up 14 to 6,745.

1404: Of the 98 economists polled by the Financial Times 49 said they thought the MPC´s policy [of forward guidance] would be modified. While 32 said the MPC (KOSDAQ: 050540.KQ – news) will stick to its guns the rest apparently did not express a clear opinion. An overwhelming majority indicated that they did not like the policy and would prefer that it were changed significantly or dropped, although they did not think this would happen.

1334: The Financial Times writes today on how US shares – when measured by the cyclically-adjusted price-to-earnings (Cape) multiple – are overpriced. The so-called Shiller Cape for the US stockmarket now stands at 25, almost exactly where it was standing at its last peak, in 2007.

1323: Analysts at Cantor Fitzgerald have upped their price target on shares of Next (Frankfurt: NXG.F – news) to 6,500p from 5,200p before, while at the same time moving to a ‘buy’ recommendation on the shares from ‘hold’.

1236: Barclays Research ups fourth quarter UK GDP forecast to 0.8 per cent quarter-on-quarter from the 0.6 per cent previously envisaged.

1144: Shares of RSA continue to lead gains on the top flight index after a report in The Sunday Telegraph said that an independent investigation of RSA Insurance (LSE: RSA.L – news) ‘s troubled Irish operation is expected to find that the unit’s capital shortage was an isolated incident and that no further write-downs are needed. FTSE 100 up 1 to 6,732.

1035: Analysts at Credit Suisse (NYSE: CS – news) have today issued an upbeat research note on the outlook for IT spending, as GDP and investment are set to pick up this year. However, they have opted to lower their recommendation on shares of Micro Focus to neutral, from outperform, as “[…] after 2 years of strong share price outperformance, this compelling valuation argument no longer exists.” Their new price target for the company´s shares has been set at 838p versus 868p before. The stock is now approaching its 200-day moving average towards 748p. In the same note the broker makes positive remarks on Computacenter (LSE: CCC.L – news) . FTSE 100 down 12 to 6,719.

1011: Miners are slipping lower in the wake of the latest weak reading on the Chinese services sector overnight.

0956: RSA Insurance continues to make gains on Monday morning after UBS raised its target price on the stock by 13 per cent, saying that the firm’s struggles in Ireland (Other OTC: IRLD – news) could be used as a ‘catalyst for change’. Meanwhile, the bank also said that a takeover and break-up of RSA still “remains a possibility”, following recent market chatter. FTSE down 8 to 6,723.

0928: The Markit UK service sector purchasing managers´ index for the month of December has come in at 58.8, versus a reading of 60 for the previous month and economists´ estimate of 60.3.

0858: The Markit Eurozone purchasing managers´ index for December has come in at 51.0, in line with forecasts, albeit slightly below the previous month´s reading of 51.2.

0854: The latest batch of Eurozone service sector purchasing managers´ surveys (PMIs) out this morning have come in ahead of economists´ calculations for the most part, although the readings have been somewhat mixed. Spain´s PMI rose unexpectedly to the 54.2 point mark in December, coming in well ahead of the 51.6 which had been forecast. Similarly, the French PMI printed at 47.8, below November´s reading, but by less than was feared. The Italian services PMI, on the other hand, failed to meet economists´ estimates, although it did improve on last month´s number. FTSE 100 up 8 to 6,739.

0830: UK stocks have begun the session moving slightly higher, led by gains in RSA and Petrofac (Frankfurt: A0HF9Y – news) . The former has been added by analysts at UBS to the brokers´ ‘most preferred’ stocks list while their peers at Deutsche Bank (Xetra: DBK.DE – news) have upped their view on Petrofac to ‘buy’ from ‘hold’. All eyes are now on the soon to be released figures for the latest French service sector purchasing managers´ survey due out this morning. A weak reading might further fan worries about the Eurozone´s second-largest economy. Overnight the HSBC China services sector business activity index posted at 50.9 in December, down from 52.5 in November. HSBC´s Chief of Asian Research, however, seems sanguine about the sector´s outlook over the coming year. FTSE 100 up 16 to 6,746.