Market overview: FTSE closes down four points at 6,815

LONDON (ShareCast) – 1630: Close The FTSE 100 closed modestly lower today, with a strong performance by miners limiting losses, while Intertek led the downside after Berenberg cut the stock to ‘hold’. In today’s macro news, it was revealed that UK house prices are expected to increase further as supply fails to meet demand, while Business Secretary Vince Cable said splitting up Britain’s banks will fail to solve the lack of business lending in the UK. Elsewhere, investor confidence in the UK hit a record high. Over in the US stocks are lower, hit by the Labor Department’s weekly jobless claims report. The FTSE 100 closed down 4.44 points at 6,815.42.

1514: Some reports are citing research from Forensic Asia according to which HSBC has not made the necessary adjustments during the “quantitative reprieve” to rectify its capital issues. “The result has been extreme earnings overstatement, causing HSBC to become one of the largest practitioners of capital forbearance globally. This charade appears to be ending, given how few earnings levers remain besides selling off core elements of the franchise and the stringencies of Basel III compliance. We expect EPS pressures and dilution from capital increases to be high. A dividend cut may even be on the cards,” those analysts claim. FTSE 100 up 4 to 6,824.

1500: The Federal Reserve bank of Philadelphia’s regional manufacturing gauge edged higher in January, to reach a reading of 9.4 (consensus: 8.7). “The detail shows that while the employment index rebounded to +10.0, from +4.4, the new orders index dropped to +5.1, from +12.9, and the inventories index plunged to -19.6, from +16.0,” Capital Economics points out.

1454: Shares of Halfords have made their way to the top of the FTSE-250’s leaderboard after the company revealed a 5.2 per cent rise in like-for-like sales. The stock is now trading up against technical resistance at 496p.

1330: Initial weekly jobless claims Stateside fell by 2,000 to 328,000 (consensus: 325,000).

1312: Shares of US retailer Best Buy (Berlin: BUY.BE – news) are diving 27 per cent following poor results.

1305: Citigroup (NYSE: C – news) publishes fourth quarter earnings per share of 82 cents, versus the 95 forecast by analysts.

1304: Writing today in the FT on the solid prospects for commodity prices this year, following on the back of two years of under-performance, James Paulsen, Chief Investment Strategist at Wells Capital Management, mentions indicators which suggest money velocity may rise this year – for the first time in this recovery. FTSE 100 up 3 to 6,823.

1257: Goldman Sachs (NYSE: GS-PB – news) publishes fourth quarter earnings per share of 4.60 dollars, versus consensus expectations for 4.18. Well ahead of expectations; then again, it is Goldman Sachs.

1243: At least two pages worth of coverage on global oil markets from multiple angles in today’s FT. At first glance the upshot seems to be rising global supplies and the potential for production cuts from OPEC, particularly in the long-term it appears.

1000: The rate of change in the Eurozone’s consumer price index for the month of December has been confirmed at 0.8 per cent year on year and the change in the core rate at 0.3 per cent.

0954: Telegraph has an interesting story today on the role of declining oil prices on the outlook for inflation, or deflation rather. To take into account food prices are also affected by this and have been coming off the boil in the last year. The latter, in turn, has implications for geopolitical stability. That all comes against the backdrop of very low inflation readings in some heavily-indebted countries in the Eurozone periphery. It’s a complex and risk-prone world to say the least.

0952: Credit Suisse (NYSE: CS – news) downgrades price target on BskyB to 600p from 700p.

0936: Despite possible issues related to weaker seasonal demand in the first quarter and concerns – on their part – regarding potential long-term structural demand for commodities out of China analysts at Citi have today opted to raise their view on the mining sector to ‘bullish’ from ‘neutral.’ Their top picks are: BHP, Rio and Glencore Xstrata (Other OTC: GLCNF – news) . Stance on BHP goes up to ‘buy’ from ‘neutral’, target price maintained at 2,100p. The company is now “offering a utility-style dividend yield against the UK market, while delivering a positive shareholder value creation,” they go on to explain. FTSE 100 up 6 to 6,826.

0935: Here’s a little bit more colour on Morgan Stanley (Berlin: DWD.BE – news) ‘s opinion regarding the state of affairs over at United Utilities (LSE: UU.L – news) : “The 2014 regulatory review will clearly be tough but this is surely well known. We expect clarity on allowed returns shortly, which should remove uncertainty, and we think fears of dividend cuts are overdone. [United Utilities] is our top pick – it trades close to RCV and offers good value […]”

0934: Interesting bit from Barclays (LSE: BARC.L – news) yesterday on IAG. “Fundamentally, we see IAG as the best-positioned European network carrier to exceed its cost of capital and return cash to shareholders, and we think this deserves a clear premium multiple to legacy airline peers.”

0845: UK stocks have begun the session nearly flat despite overnight gains on Wall Street and a similar performance on Asian bourses this morning. Shares of United Utilities are leading gains in early trading following an upgrade out of analysts at Morgan Stanley to overweight (from equal-weight). Shares in BHP are also moving higher on the heels of an upgrade to ‘buy’ out of Citi. A barrage of data is due for release Stateside this afternoon. The latest Eurozone CPI numbers will be forthcoming later this morning, at 10:00. FTSE 100 up 4 to 6,824.

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