LONDON (SHARECAST) - - Moody's lower EU rating to 'negative'
techMARK 2,097.31 -0.47%
FTSE 100 5,733.86 -0.43%
FTSE 250 11,500.77 -0.02%
- Markets await US ISM data
- Investors keep eyes pinned on ECB
UK stocks pulled back on Tuesday morning following a strong performance the day before as some gloomy comments from Moody's and caution ahead of some US economic data dampened sentiment.
Yesterday, "the FTSE bounced off support at 5,700 as traders piled back into high -beta stocks. A push towards 5,900 looks likely but a conviction buy requires an increase in volume, which is currently lacking," said Manoj Ladwa from TJ Markets this morning.
Credit ratings agency Moody's last night maintained the European Union's 'Aaa' rating but lowered its outlook for the region from 'stable' to 'negative' to reflect "the negative outlooks now assigned to the Aaa sovereign ratings of key contributors to the EU budget: Germany, France, the UK and the Netherlands, which together account for around 45% of the EU's budget revenue".
Investors were also nervous about some manufacturing data due out Stateside this afternoon. The US ISM manufacturing index is expected to improve from 49.8 last month to 50.0, the level that separates expansion and contraction. A better-than-expected figure may ease the Federal Reserve's concerns about the economy, disrupting hopes that the central bank will launch another round of quantitative easing at its meeting next week.
The big day on equity markets this week will undoubtedly be Thursday when the monetary policy decisions from the Bank of England and the European Central Bank (ECB) are due. However, the latter will take centre stage as ECB President Mario Draghi is widely expected to unveil plans for buying sovereign debt in order to bring down bond yields in peripheral nations.
REIT stocks and RBS hit by downgrades
Real estate investment trust (REIT) Land Securities was among the worst performers early on after both JP Morgan Cazenove and UBS downgraded their ratings on the stock to 'neutral' this morning. UBS said that the stock's valuation reflects "fair value after a strong run".
UBS also cut its ratings for sector peers British Land and SEGRO from 'buy' to 'neutral'. In contrast, the broker upgraded REIT peer Hammerson from 'neutral' to 'buy', saying that the low risk associated with the company is "underappreciated".
Banking group Royal Bank of Scotland (RBS) was lower as the threat of a bruising legal battle with angry shareholders continues to hang over the company. Investec this morning lowered its recommendation on the shares from 'buy' to 'hold', saying that "after another modest rally, we throw in the towel".
High-flying plant hire firm Ashtead jumped after raising profits guidance again as its new financial year got off to a strong start.
Veterinary pharmaceuticals firm Dechra rose after revealing growing sales across all its major brands and profits ahead of market forecasts for the full year to the end of June.
Recycled packing company DS Smith was in demand after saying it was trading in line with market expectations and expected substantial year-on-year growth in earnings per share.
Also on the rise was Old Speckled Hen brewer Greene King which shrugged off the Olympics and the poor weather to make a robust start to the financial year.
FTSE 100 - Risers
Petrofac Ltd. (PFC) 1,535.00p +1.25%
Vedanta Resources (VED) 900.00p +0.90%
Capital Shopping Centres Group (CSCG) 340.90p +0.62%
Pennon Group (PNN) 740.50p +0.61%
Fresnillo (FRES) 1,636.00p +0.55%
Eurasian Natural Resources Corp. (ENRC) 303.50p +0.53%
Tullow Oil (TLW) 1,396.00p +0.50%
Evraz (EVR) 227.90p +0.44%
Rio Tinto (RIO) 2,805.50p +0.36%
Kazakhmys (KAZ) 612.00p +0.33%
FTSE 100 - Fallers
Land Securities Group (LAND) 780.50p -1.64%
Royal Bank of Scotland Group (RBS) 223.10p -1.50%
Vodafone Group (VOD) 180.85p -1.28%
Next (NXT) 3,599.00p -1.23%
Croda International (CRDA) 2,348.00p -1.14%
British Land Co (BLND) 535.50p -1.11%
Burberry Group (BRBY) 1,340.00p -1.11%
Imperial Tobacco Group (IMT) 2,460.00p -1.09%
Prudential (PRU) 777.50p -1.08%
Intertek Group (ITRK) 2,786.00p -0.99%
FTSE 250 - Risers
Ashtead Group (AHT) 307.80p +8.96%
Heritage Oil (HOIL) 198.50p +4.42%
Smith (DS) (SMDS) 168.40p +3.95%
Greene King (GNK) 585.50p +3.90%
Ophir Energy (OPHR) 603.00p +2.90%
Ferrexpo (FXPO) 163.50p +2.38%
Stobart Group Ltd. (STOB) 114.90p +2.32%
SDL (SDL) 653.00p +2.27%
Fidessa Group (FDSA) 1,448.00p +2.04%
Sports Direct International (SPD) 315.30p +1.71%
FTSE 250 - Fallers
Bumi (BUMI) 290.00p -4.35%
Talvivaara Mining Company (TALV) 135.80p -3.00%
New World Resources A Shares (NWR) 272.00p -2.51%
Taylor Wimpey (TW.) 52.20p -1.97%
Millennium & Copthorne Hotels (MLC) 482.30p -1.83%
Betfair Group (BET) 714.50p -1.72%
Berkeley Group Holdings (The) (BKG) 1,461.00p -1.68%
Essar Energy (ESSR) 102.10p -1.35%
Hikma Pharmaceuticals (HIK) 725.50p -1.29%
St James's Place (STJ) 345.00p -1.26%