LONDON (SHARECAST) - - Eurozone political uncertainty still ongoing
- ITV, Sainsbury, Glencore wanted after updates
- Weir and Sage fall sharply
While the political uncertainty in the Eurozone is still on investors' minds, the FTSE 100 opened slightly higher on Wednesday morning following steep losses seen the day before.
On Tuesday, the blue chip index dropped to its lowest closing level of 2012 so far, at 5,555. The last time it finished below that level was on December 28th 2011 when it finished the session at 5,507.
Yesterday's sell-off was fuelled by the ongoing concerns surrounding the political situation in Greece. Antonis Samaras from the Conservative New Democracy failed to form a new government after elections at the weekend.
This now means that Alexis Tsipras from the left-wing Syriza party has now been given the task of crafting a coalition. He is expected to reject the tough austerity measures agreed as part of the country's €240bn bailout by the European Union and International Monetary Fund.
This rejection "would effectively lead to a default as early as next month, followed by Greece leaving the Eurozone. The effect this could have on Spain is the most concerning given their struggling banking system following the bursting of the housing bubble," said analyst Craig Erlam from Alpari this morning.
FTSE 100: ITV and Sainsbury on the rise
Terrestrial broadcaster ITV was performing well after saying that its first-half net advertising revenues will be ahead of the market, thanks to an expected boost from the Euro 2012 football tournament.
Underlying profit before tax from supermarket titan Sainsbury came in bang in line with expectations, while the full-year dividend is a little more generous than anticipated. Shares jumped early on.
Commodities producer and marketer Glencore International rose after it said that all of its major growth projects remained on schedule and within budget in the first quarter of 2012. The company also said it expects its merger with Xstrata to be completed by the third quarter.
Among the fallers was business software group Sage after saying that a strategic switch to subscription revenues, plus difficulties in Europe, have constrained growth in the six months to the end of March.
Engineering giant Weir Group dropped after order input fell 26% on a like-for-like basis in its oil and gas division in the first quarter.
Drugs group GlaxoSmithKline was in the red after going hostile in its bid for US biopharmaceutical firm HGS.
Ex-dividend stocks are also limiting gains for the Footsie this morning. Aberdeen Asset Management, Randgold Resources and Rexam were all trading without the right to their latest dividends.
FTSE 250: easyJet and Centamin flying higher
Airline easyJet's interim losses were lower than expected, helped by a increased revenues and tight control of costs. Loss before tax for the six months to the end of March narrowed year-on-year from £153m to £112m, while revenues rose 15.7% from £1,266m to £1,465m. Shares rose early on.
Egyptian gold miner Centamin has revealed a significant drop in production in the first quarter after strike action hit its main Sukari operation, but shares rose after the firm still maintained its full-year output guidance.