Market overview: FTSE closes up two points at 6,675

LONDON (ShareCast) – 1630: Close The FTSE closed marginally higher today, helped by a strong performance from the mining sector on the back of positive broker comment. Tullow Oil (LSE: TLW.L – news) limited the gains, leading the downside after posting a profit decline for 2013. In today’s macro news, the BoE (Shenzhen: 000725.SZ – news) today said that interest rates would most likely never again hit pre-recession levels of five per cent, and instead would find a ‘new normal’ of around 2-3 per cent. The news came as the Bank announced changes to its forward guidance policy, with its focus now squarely on the need to reduce the amount of excess slack in the economy. Meanwhile, a report showed that December mortgage lending climbed by 27 per cent on the same period a year earlier, although was down one per cent month-on-month. Stocks in the US are mixed, with notable declines on the Dow Jones. The FTSE 100 closed up 2.37 points at 6,675.03.

1502: Broker Panmure Gordon upgraded titanium miner Kenmare Resources (LSE: KMR.L – news) to a ‘buy’ from ‘hold’ on Wednesday, saying a potential debt restructuring should keep its finances robust beyond this financial year. Resolution and Prudential (HKSE: 2378.HK – news) are moving up the leaderboard, alongside Legal&General. Yields on 10-year Gilts are now higher by seven basis points to 2.81 per cent.

1500: Westhouse Securities has upgraded African Barrick Gold (LSE: ABG.L – news) to ‘hold’ from ‘sell’.

1435: Standard Chartered (HKSE: 2888.HK – news) will sell its Swiss private bank following a ‘comprehensive review’, the Wall Street Journal reports.

1434: Bunzl (LSE: BNZL.L – news) upped to ‘buy’ from ‘underperform’ at bank of America Merrill Lynch.

1353: In a note released today on RSA analysts at Nomura say: “Nevertheless we still prefer Aviva (Other OTC: AIVAF – news) as the more appealing restructuring play in UK insurance”. The broker further notes continuing press speculation regarding an imminent rights issue that would give incoming Chief a clean slate although they see limited opportunities to extract further operational efficiencies from the business.

1336: US mortgage applications fell two per cent in the week to February 7th as both purchase and refinancing applications declined, according to the Mortgage Bankers’ Association. They rose 0.4 per cent the previous week.

1314: Analysts at Investec (LSE: INVP.L – news) say that African Barrick Gold has performed well under its new Chief but “we believe it has run ahead of itself and we cannot justify the current share price without a significant lift in the forward gold price (we assume a long-term 1,300 dollar/oz).” FTSE 100 up 4 to 6,677.

1305: Credit Suisse (NYSE: CS – news) is out today with a rather downbeat research note on Imagination’s outlook, explaining to clients that: “given volume slowdown at Apple (NasdaqGS: AAPL – news) , along with ongoing share loss at Mediatek and limited share gains with Chinese OEMs, we see Imagination’s graphics share in smartphones/tablets declining from approximately 40 per cent in 2013 to circa 30 per cent by 2015, which presents risks to its long-term outlook of 1bn core IMG based chip shipments by fiscal year 2016 (we assume 800mn). Hence, we maintain our ‘underperform’ rating.”.

1200: India’s Consumer Price Index slipped to a 8.79 per cent year-on-year rate of increase during the month of January (consensus: 9.20 per cent).

1126: The MPC’s Deputy Governor, Charles Bean, has reportedly said that Bank wants to start tightening policy before slack is completely eliminated. Cable hit an intraday high at 1.6559 in the wake of the quarterly Inflation Report.

1123: Shares of Babcock are moving ahead after confirming that its joint venture has been appointed as one of four suppliers to the 2bn pound Network Rail electrification programme.

1054: At first glance the MPC (KOSDAQ: 050540.KQ – news) seems to have completely revamped the framework for ‘forward guidance’. The essence, arguably, may not have changed. The Bank is still striving to achieve a balanced and sustained economic recovery. However, the focus of forward guidance is now squarely on the need to reduce the amount of excess slack in the economy – given that it is a waste of resources, Carney said. With that aim in mind, the MPC has deployed a range of indicators to better gauge the degree of spare capacity in the economy. FTSE 100 up 15 to 6,687.

1030: BoE sees unemployment falling to seven per cent by the spring, despite which there is scope to maintain base rate at 0.5 per cent. The unemployment threshold has been maintained.

0956: Numis warns that there is a lot of room for confusion in today’s numbers out of Telecity, given that guidance is not offered on a comparable basis and includes a currency impact. However, that means that guidance for fiscal year 2014 is in fact “little changed” and disclosure by the company has in fact improved. On the downside, the company’s guidance for capital expenditures looks “very high”. Nevertheless, today’s fall in the share price is heavily overdone, they say.

0834: UK stocks have started the day slightly in the blue. Morrison is in the lead following reports that it could be taken private. Reckitt Benckiser (Xetra: A0M1W6 – news) is on the up after the consumer goods giant released better-than-expected full year figures on revenues, margins and net debt – although the dividend missed estimates from analysts such as those at Shore Capital. Out on the FTSE 250 shares of African Barrick Gold are off following its latest results and a recent sharp run higher in the stock. Telecity is the biggest faller on that benchmark after guiding revenue expectations lower for this year. Citi is reportedly calling for gold prices to head back higher, towards 1,400 dollars per ounce by year-end. The latest Chinese trade numbers out overnight came in ahead of forecasts, but have nonetheless provoked quite mixed reactions from market watchers. FTSE 100 up 6 to 6,679.

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