Market overview: FTSE 100 closes up 81 at 6,673

LONDON (ShareCast) – 1630:Close It was a strong finish for the FTSE today after Fresnillo (Other OTC: FNLPF – news) leapt following news of a positive court decision and Babcock cheered with a strong Q3. Strong non-food retail data also helped to drive the index higher. On the downside, supermarkets slumped on the back of poor food retail sales data, while insurers suffered in the wake of the ongoing stormy weather which has wreaked havoc across the UK. Over in the US, stocks are higher across the board following a dovish speech from new Fed Chairwoman Janet Yellen. The FTSE 100 closed up 81.11 points at 6,672.66.

1524: “While the risks to [emerging market] equities are numerous, today’s crisis-level valuations seem to indicate that the worst may already be priced in,” Barclays Research wrote earlier today.

1422: Federal Reserve Chair Janet Yellen has indicated the US central bank will continue to scale back monetary stimulus in her first congressional testimony today. She signalled that the recent drop off in the pace of employment growth and the turmoil in emerging markets will not stop the Federal Open Market Committee from gradually tapering. The central bank last month decided to reduce monthly bond purchases by 10bn dollars to 65bn dollars, its second round of cuts.

1419: A small group of banks from within the EU have material exposures to fragile emerging markets, ratings agency Fitch said in a report issued today. While those risks are manageable they may be understated if “there is contagion to other closely connected emerging and developed countries”. The most exposed is Spain’s Santander, although Barclays (LSE: BARC.L – news) also makes the cut given its majority owned South African subsidiary Absa. Speaking of which, Goldman Sachs (NYSE: GS-PB – news) yesterday lowered its forecasts for Gross Domestic product growth in that country, in 2014/15, to 2.4 per cent/2.9 per cent, from 2.8 per cent/3.4 per cent previously, as it moved to incorporate 350 basis points in rate hikes out to 2016.

1326: While retail sales rose by 3.9 per cent in like-for-like (LFL) terms in January, expenditures on ‘staples’ – such as food – actually declined by 1.9 per cent whilst rising at a clip close to 10 per cent in the non-food category.

1247: Supermarket operators Tesco (Xetra: TCO.DE – news) , Morrison and Sainsbury (Berlin: SUY1.BE – news) are drifting to the bottom of the leaderboard on the Footsie after Kantar figures came out showing UK grocery market growth fell to 2.4 per cent over the last weeks. FTSE 100 up 53 to 6,644.

1246: RSA Insurance (LSE: RSA.L – news) shares are off, possibly as a result of the negative newsflow regarding the eventual cost to the sector of recent flooding in the west of the UK and now the Thames valley.

1244: Shares in Barclays have levelled off a little. The initial reactions from analysts seem to be centering on the poor prospects for profitability at its investment banking arm, the lack of revised cost targets and the risk that it will still incur in additional exceptional charges going forward.

1150: Barclays is down seven per cent with trading volumes picking up. If shares close below last week’s lows – at 261p – they may be headed towards technical support at around 250p.

1122: UK fashion retailer New Look is ruling out a stock market listing for now, Reuters reports.

1110: Reports cite SAB Miller as having indicated that it sees medium-term volume growth in the low single digits and European operating margins – on an EBITA basis – increasing by 30 to 60 basis points a year.

0910: Commenting on today’s figures out from Barclays Ishaq Siddiqi, Market Strategist at ETX Capital, writes: “Barclays headline earnings figures make uncomfortable reading […] Certainly a reading that rattles confidence in CEO Jenkins’ ability to turn around the business by changing the culture, re-shaping the balance sheet and repairing the bank’s reputation.” Analysts at Numis, on the other hand, have noted the progress made by the lender as regards its leverage and capital position. FTSE 100 up 51 to 6,643.

0844: Shares have begun the day modestly higher ahead of this afternoon’s testimony by new Fed Chair Janet Yellen and upbeat economic data released overnight in Australia. To take into account, the shortest term interest rates continue to ease lower in China. The seven-day repurchase rate slipped 10 basis points to 5.2 per cent this morning despite the central bank’s decision not to carry out reverse-repurchase operations and after the passing of the Lunar New Year holiday. Retailers are leading gains early on in London following the release of the latest BRC retail sales data. Out on the FTSE 250 shares of Kazhakmys are rocketing after Kazhakstan’s decision to devalue its currency by 19 per cent. FTSE 100 up 51 to 6,642.

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