LONDON (ShareCast) – 1630: Close The FTSE closed marginally lower, having remained fairly steady for the final two hours of trade. The biggest riser was BskyB following a strong update, while Diageo (LSE: DGE.L – news) fell after missing analyst expectations for H1. Serco fell heavily on the second tier index after issuing a profit warning. In economic news, UK consumer confidence in January was higher compared to the previous month, while money supply growth slowed down in December. Over in the US, jobless claims came in above expectations, pending home sales for December dropped to their lowest in over two years, but GDP for the States rose as expected. The FTSE 100 closed down 5.83 points at 6,538.45.
1537: Markets are still trading lower despite a strong start on Wall Street as investors react to the ‘in-line’ economic growth figures which showed that US GDP rose 3.2 per cent in the fourth quarter. Sentiment was also helped by upbeat earnings from Facebook (NasdaqGS: FB – news) and Visa (NYSE: V – news) and strong gains from Google (NasdaqGS: GOOG – news) after a disposal of the Motorola Mobility mobile-phone business. In London, Fresnillo (Other OTC: FNLPF – news) and Randgold are now among the worst performers as gold and silver prices slump. The FTSE 100 is down 13.81 points at 6,530.47.
1408: Shares of Admiral seem to be in the midst of a ‘throw-back’ to what was previously technical resistance and has now become a support level, at 1,424p. FTSE 100 up 8 to 6,552.
1407: IAG has climbed into second place on the Footsie after being added to Bank of America Merrill Lynch’s Europe-1 list.
1406: Following a meeting with the FCA’s Director of Long-Term Savings & Pensions to discuss regulatory developments impacting the UK life insurers Goldman Sachs (NYSE: GS-PB – news) writes today: “Product distribution, competition and prices are the regulator’s key areas of focus. We expect ongoing regulatory headwinds in UK life, and favour companies with a well-diversified geographic/product mix (Prudential (HKSE: 2378.HK – news) and Old Mutual (Other OTC: ODMTY – news) ).
1330: Initial weekly unemployment claims increased by 19,000 last week to reach 348,000 (consensus: 330,000). There may be a distortion in the data associated with the Martin Luther King Jr. holiday. Today’s preliminary print on the rate of expansion in US gross domestic product has come in at 3.2 per cent, as expected, after a reading of 4.1 per cent for quarter three.
1300: Germany’s harmonised consumer price index for the month of January dropped to a 1.2 per cent year-on-year clip after falling by 0.7 per cent month-over-month (consensus: 1.3 per cent). FTSE 100 down 15 to 6,529.
1148: In the aftermath of today’s quarterly numbers out of BSkyB analysts at Jefferies have pointed out how rival BT seems to be “doing a better job of keeping its retail broadband subscribers loyal”, despite which Sky managed to beat the broker’s estimates on that front. Hence, the firm will re-focus on the 2m Sky TV homes which currently take their broadband service through Talk and Virgin. FTSE 100 down 16 to 6,528.
1147: An almost 10 per cent spike in shares of HSBC was responsible for the abrupt move higher in the Footsie earlier. That led to a trading halt being imposed on the stock. Market commentary is attributing the move to a so-called “fat finger.” Probably not a coincidence that it has exposure to emerging markets.
1108: Shares of services outsourcing company Serco are plunging by 14.5 per cent after the company warned that currency movements will hit results.
0930: Money supply (M4) in the UK slipped by 1.4 per cent in December, according to the Bank of England. Mortgage approvals increased to 71,600 during that same month (consensus: 72,900) from the 70,800 seen in November.
0923: The Turkish lira is now slipping lower by 0.93% to 0.4377 versus the US dollar. FTSE 100 down 29 to 6,515.
0841: The Turkish lira is now trading nearly unchanged at 0.4422 versus the US dollar. On the subject of the recent volatility in emerging markets Goldman Sachs had this to say today: “Despite our cautious view of the emerging market universe itself, the threshold for sustained transmission to developed market economies is higher. Emerging market demand would have to slow a lot to have a large impact through trade channels and lower commodity prices and bond yields would provide some offset.” Then there is the question of China’s shadow banking system, but that is a whole different matter. It may be interesting to see if tensions there subside after the New Year.
0834: Shares have begun the day slightly under the weather following the selling seen overnight on Wall Street and in Asian bourses. Nevertheless, it must be pointed out that the S&P 500 managed to cling on to a technical support level – at 1,774 – even if only just barely. BSkyB is in the lead early on following its latest interim results. IAG, meanwhile, has been added to Bank of America Merrill Lynch’s Europe-1 list. Diageo is the biggest loser on the Footsie after reporting weak trading for the half year in emerging markets and perhaps also as a result of the recent tensions brewing in those geographies. As an aside, Brewers was one of the worst performing sectors on the NYSE last night. The HSBC/Markit Chinese manufacturing sector purchasing manager’s index for January was revised slightly lower, to 49.5 from an initial print of 49.6. FTSE 100 down 21 to 6,524.