LONDON (ShareCast) – 1630: Close The FTSE once again plunged today, dragged by BG Group (LSE: BG.L – news) which disappointed with its 2014 guidance, while investors continue to feel anxious over emerging markets. Other big fallers today included Vodafone, which was hit by the news that AT&T (NYSE: T – news) does not plan to make a bid. Over in the US stocks were also in retreat, hit by a fall in new home sales in December. The FTSE declined 113.08 points to 6,550.66, its lowest levels in nearly six weeks.
1613: RBS (LSE: RBS.L – news) has decided to provide 1.9bn pounds to cover various claims and conduct related matters affecting the group. This follows reports over the weekend that Governor Carney sees putting these issues behind them as lenders’ most urgent task.
1509: Markets have opened tentatively in the States as better-than-expected results from heavyweight Caterpillar (NYSE: CAT – news) are offset by a big drop in new home sales. US new home sales fell at a month-on-month rate of seven per cent to a seasonally adjusted annual rate of 414,000 in December. Analysts were expecting a fall of just 1.9 per cent. The FTSE 100 in London is trading down 90.78 points at 6,572.96.
1400: The FT’s Alphaville blog is referencing rumours regarding a possible private equity bid out of Canada for Severn Trent (Other OTC: STRNY – news) or United Utilities (LSE: UU.L – news) . The talk apparently initially surfaced last week.
1358: Markit’s US services sector purchasing manager’s index for the month of January has printed at 56.6, versus 55.7 for the month before. The reading may help to assuage concerns about US growth today.
1315: Shares in F&C Asset Management (Other OTC: FCAFF – news) leapt this afternoon after the group confirmed reports it had received an indicative offer from Canadian bank BMO Financial Group of 120p a share in cash. F&C revealed it is ‘likely to recommend a firm offer’ at the price, which followed ‘advanced discussions’. The group’s share price leapt around 23p following the group’s announcement an hour ago. The FTSE 100 is down 75.83 at 6,587.91.
1233: Some traders are linking today’s drop in Hargreaves Lansdown (LSE: HL.L – news) to the
release of Barclays Stockbrokers’ new platform pricing.
1149: Turkey’s central bank has announced that it will hold an extraordinary policy meeting tomorrow. Market commentary points to an impending rate hike to forestall further weakness in the country’s currency. Commenting on the above Capital Economics says: “Turning to tomorrow’s MPC (KOSDAQ: 050540.KQ – news) meeting, it’s not clear whether policymakers will summon up the courage to defy government pressure and hike official policy rates. For now, though, we suspect that a hike in the O/N lending rate (perhaps to 9 per cent) is the most likely outcome.” FTSE 100 down 96 to 6,568.
1148: Some emerging markets were left looking vulnerable after last week’s turmoil in in global capital markets, but it was no re-run of a 1990’s style balance-of-payments crisis, nor would it de-rail the global economic recovery, strategists at UBS (Xetra: UB0BL6 – news) wrote to clients on Monday morning.
1015: Broker Exane believes European grocers are being too timid when moving their food spend on-ine. They point out the benefits that would bring in terms of a reduction in capital intensity and greater differentiation versus competitors. Yes, Ocado is obviously there already “but it is too expensive for us”, they write.
0932: Analysts at Morgan Stanley (Berlin: DWD.BE – news) have resumed their coverage of Shire (LSE: SHP.L – news) with an ‘overweight’ rating and 3,370p price target. They point out how the shares are trading on a lower price-to-earnings multiple – at 13 times’ 2015 earnings – versus 14 times’ for the sector and a beefier annual compound growth rate for earning per share until 2017. Furthermore, they expect consensus upgrades and see no reason for the shares to de-rate lower ahead of those. FTSE 100 down 72 to 6,591.
0905: Shares of Royal Mail (Other OTC: ROYMF – news) are lower after being started at ‘sell’ by analysts at Citi. ITV (LSE: ITV.L – news) has been downgraded to ‘sell’, versus ‘neutral’, at the same broker.
0900: The IFO Institute’s business confidence gauge for Germany improved to 110.6 in January, versus 109.5 for the prior month. The consensus estimate had been for a reading of 110.
0831 The Footsie has started the session sharply lower, in the process underperforming its continental peers by a wide margin. That comes on the heels of the sharp drop seen last Friday on Wall Street and follow-through selling, overnight, in Asia. There was speculation that a Chinese investment trust might default this week. The most recent news, however, seems to be indicating that this may be avoided. BG Group is leading fallers at the moment after warning investors that its production will fall next year. Shares of Vodafone are also seeing intense selling pressure after US outfit AT&T scotched talk of a potential bid. Shire is at the top of the leaderboard after Morgan Stanley resumed coverage of the company with an ‘overweight’ recommendation. FTSE 100 down 67 to 6,597.