Market overview: FTSE 100 closes up 25 points at 6,755

LONDON (ShareCast) – 1630: Close The FTSE 100 closed 25 points higher today, driven higher by financials, in particular Lloyds. IAG climbed after posting a 10.6 per cent leap in its December traffic. In today’s economic news, the BCC (Shenzhen: 002455.SZ – news) predicted three per cent growth in the economy this year, while Goldman Sachs (NYSE: GS-PB – news) said it expects interest rates to remain steady. Elsewhere, the SMMT reported a five-year high in car sales for 2013. Over in the US stocks have made decent gains, with each of the three main indices firmly in positive territory. The FTSE closed 24.72 points higher at 6,755.45.

1602: Shares in IAG have popped into the third spot on the leaderboard immediately following the release of the carrier´s December traffic figures, in the process hitting a new all-time high.

1500: Bloomberg is commenting today on the increased supply of debt (including from Lloyds) which is expected to come to market as lenders look to capitalise on the favourable backdrop for financing. The Markit iTraxx Senior Financial index of credit-default swaps on 25 European banks and insurers earlier fell by one basis point to 81 basis points, the lowest since March 2010.

1406: Financials continue to lead gains on the Footsie. That is partly due (for Lloyds in particular) to the BoE (Shenzhen: 000725.SZ – news) ‘s Bank Liabilities Survey out this morning according to analysts. “It’s not that it contains surprising news, but de facto confirmation of improving capital metrics, improving retail deposits and (significant) declines in funding volumes/requirements is all helpful and will cause some to revisit Net Interest Margin forecasts with (further) upside potential,” Ian Gordon over at Investec (LSE: INVP.L – news) explained to Sharecast. “[It is] also worth noting that the market hadn’t materially reacted to the recent continuing diet of positive mortgage volume data and help-to-buy pricing,” he added, going on to explain that sentiment towards RBS (LSE: RBS.L – news) may also have received a boost from today´s successful Irish government bond sale.

1355: The decline in shares of Burberry may be due to comments out from analysts at Barclays (LSE: BARC.L – news) to the effect that the firm´s third quarter sales: “need to show strong comparable sales growth to retain confidence in the second-half forecasts”.

1330: The United State´s trade deficit registered a large drop in November, falling by 13 per cent to 34.3bn dollars (consensus: 40bn dollars).

1148: Latest Kantar data implies that like-for-like sales dropped by 5 per cent in the most recent four week period over at Morrison, analysts at Barclays believe, according to the FT´s Alphaville. That compares to their expectation for them to have slipped by between 2.3 per cent and 2.8 per cent.

1104: Shares of IAG continue to move higher ahead of the release of its December passenger and traffic statistics, due out at 15:00. Royal Mail (Other OTC: ROYMF – news) is seeing some selling pressure after having been initiated at ‘sell’ over at Cantor Fitzgerald.

1103: Indications are that a sale of 3bn euros in Irish government 10-year bonds is already at least three times over-subscribed, Reuters reports. This may be a positive for some UK banks with exposure to that country, such as Lloyds. Banks are now the best performing group out on the DJ Stoxx 600, rising by 1.97 per cent.

1102: In a research report put out today Credit Suisse (NYSE: CS – news) says that it expects iron ore, copper, and gold to fall this year, with the latter testing 1,000 dollars in the fourth quarter [the broker´s estimate is for a price of 990 dollars towards the end of the year] and for US natural gas (Other OTC: UNGS – news) prices to give back its recent gains in 2014, while oil should moderate a little. However, the platinum group metals, aluminum, lead, and zinc are likely to finally move into a recovery phase by the second half of the year.

1011: Analysts at Jefferies have moved to a ‘hold’ recommendation on shares of BskyB, from underperform, while at the same time upping their target price on the stock to 860p from 710p before. In their opinion the firm has three new growth options which it can explore: attacking those SkyTV homes which take broadband from TalkTalk or Virgin, exploiting ‘basic’ pay TV more aggresively and pursuing more extensive cross-selling with Vodafone. The same broker today also nudged higher its price target on shares of Ashtead to 900p from 880p before.

1000: The Eurozone´s core inflation rate – at the consumer level – dropped to 0.7 per cent in December from the 1.0 per cent rate seen in the month before (consensus: 0.9 per cent).

0851: UK stocks have managed to shake off the weakness seen in stocks overnight on Wall Street. Marks&Spencer and Ashtead are in the lead early on, while Severn Trent (Other OTC: STRNY – news) is at the bottom of the pile on the top flight index following a downgrade by JP Morgan (Other OTC: JPYYL – news) to underweight from neutral. On the positive side of things, German unemployment decreased by 15,000 persons in December (consensus: -1,000). Of interest, the Financial Times calls attention on Tuesday morning (Frankfurt: TDM.F – news) to the fact that the Chancellor´s economic blueprints, unveiled yesterday evening, call for spending cuts which are due to fall unevenly on working-age people, while safeguarding perks for the elderly or state pensions. No official economic indicators are due for release today in the UK. FTSE 100 up 5 to 6,735.

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