Market overview: FTSE closes down 16 points at 6,449

LONDON (ShareCast) – 1630: Close The FTSE closed in the red once again today, albeit with a more modest decline, as a strong performance by financials helped to partially offset heavy declines by ARM on the back of a poor Q4. Miners were also lower as metal prices slipped. Macro (Shenzhen: 000533.SZ – news) wise, UK construction PMI rose to the 64.6 point level in January from 62.1 in December, notably above consensus of 61.5. Meanwhile, Italy’s harmonised inflation weakened in January, coming in comfortably below economists’ expectations. That seems to have set off alarm bells ringing in traders´ heads. Over in the US, stocks have rebounded into positive territory, with decent gains being registered across the board. The FTSE 100 closed down 16.39 points at 6,449.27.

1437: Quindell (LSE: QPP.L – news) is outperforming in the AIM space after announcing that it sold closed over 200m pounds in new contracts. The insurance claims outsourcing technology specialist has also moved to acquire Himex while obtaining an option which might see it take over ingenie Limited. Shares are rocketing higher.

1436: Shares of various asset managers are now moving up the leaderboard. Associated British Foods (LSE: ABF.L – news) is also to be found at the head of the pack after Morgan Stanley (Berlin: DWD.BE – news) upped its price target on the stock earlier in the day.

1400: The President of the US Federal Reserve bank of Richmond, Jeffrey Lacker, expects the central bank to continue to trim its programme of asset purchases given the improvement in labour markets. He joins the likes of Dallas Fed Chairman Robert Fisher who last delivered a similar message.

1147: Russian Federation cancels a bond auction for a second week running, Bloomberg reports.

1131: Credit Suisse (NYSE: CS – news) expects the ECB to take the deposit rate marginally into negative territory, alongside a token cut in its main policy rate, come March or April. However, “bringing this decision forward to this Thursday is a risk,” the broker says.

1111: The Romanian cenral bank cuts policy rate by 25 basis points to 3.5 per cent, as expected.

1108: Commenting on the data, Dr. Howard Archer, Chief European+Uk economist at IHS Global Insight remarks “An extremely strong across the board purchasing managers survey for January provides highly compelling evidence that the construction sector’s upturn remains intact at the start of 2014. This is despite the latest national accounts data estimating that construction output dipped 0.3 per cent quarter-on-quarter in the fourth quarter of 2013.”

1020: Turkey and China need to watched. Yet what is really scary about their troubles is “the underlying weakness in western economies, a weakness made much worse by really, really bad policies,” writes Paul Krugman in The New York Times, in reference to the excessive austerity policies undertaken in the West. As an aside, the Turkish lira is now rising by 0.78 per cent to 0.4416 in its cross versus the US dollar. Gold futures, as might be expected, are off a tad as a result this morning. Randgold Resources (Dusseldorf: RGR1.DU – news) is the second worst performer now on the Footsie while African Barrick Gold (LSE: ABG.L – news) is getting hit out on the FTSE 250. FTSE 100 down 6 to 6,459.

1000: In harmonised terms the Consumer Price Index (HCPI) fell by 2.6 per cent month-on-month (+0.6 per cent year-on-year) in January. The consensus estimate was for a rise of 0.8 per cent.

0936: In the opinion of analysts at Bernstein consumers know why they shop at Sainsbury (Berlin: SUY1.BE – news) . “Its distinctive offer, great store execution and a good format mix drove positive like-for-likes for the past 36 quarters and [the company will] continue to take market share from undifferentiated retailers [such as Tesco (Xetra: TCO.DE – news) or Morrison],” thay say. Hence, and after what in their view was an unjustified recent drop in the price, they have decided to up their view on the shares to ‘outperform’.

0930: Markit´s Purchasing Managers´Index for construction in the UK rose to the 64.6 point level in January from a reading of 62.1 in the month before. The consensus expectation had been for a reading of 61.5.

0833: Shares have started the session only moderaterly lower despite the sharp losses seen overnight on Wall Street and even worse in Tokyo. ARM Holdings (LSE: ARM.L – news) is at the bottom of the pile on the heels of a small EPS ‘miss’ this morning. More fundamentally, Numis points out how the company´s total royalties from technology slowed down to a single-digit pace at the end of last year. Sainsbury is at the top of the leaderboard on the back of an upgrade out of analysts at Sainsbury. The economic calendar is rather light today. However, overnight the Reserve Bank of Australia adopted a less ‘dovish’ tone than in previous meetings, highlighting the need for prudence and to look through short-term weakness in growth in that jurisdiction.

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