LONDON (SHARECAST) - 1630:Close It was announced this morning that Business Secretary Vince Cable is soon to unveil the creation of a one billion pound business bank to help increase lending to companies. He will tell the Liberal Democrat party conference in Brighton that the bank would "get behind" good businesses and be up and running in 18 months. In company news, miners led the way lower following a call from analysts at JP Morgan to take profits in the sector because stalling economic growth in the US and China is expected to offset the US Fed´s third round of asset purchases. Meanwhile, it was reported that Eurozone members may consider boosting the size of the permanent rescue fund -the European Stability Mechanism (ESM)- up to four-fold, from €500bn to €2.0trn. The FTSE 100 closed down 14 points at 5,839.
1540: Traders are murmuring about a shift in sentiment, reporting evidence of investors moving into bonds and dollars from equities and commodities inn case there is a downturn in optimism. But David White, a trader from SpreadEx, says optimism remains the flavour of the day. "There would need to be a critical rerating in prices for this year’s rally to be questioned," he says. The FTSE 100 is down 24 points at 5828.
1508: Footsie has made a small recovery in the afternoon session but miners continue to weigh on the index. RBS is off the pace following reports it plans to cut 300 jobs at its investment bank, according to figures released today. FTSE 100 is down 27 at 5,826.
1220: A survey has revealed that Britons are now even more concerned about inflation, according to Markit, with respondents saying they expect living costs to rise sharply. Around 66% of those surveyed said their day-to-day living costs have risen since August, matching what was seen in the monthly index which measures inflation perceptions, which showed the strongest month-on-month increase since November 2010. 40% of respondents said they expected their financial situation to get worse over the next year. The FTSE was down 36 at 5,817.
1104: In general equities are moving lower this morning on the back of the negative economic news-flow that came out of the Eurozone over the weekend. A factor weighing on mining stocks in particular, however, is a call from analysts at JP Morgan to take profits in the sector because stalling economic growth in the US and, above all, in China, are expected to offset the US Fed´s third round of asset purchases. Furthermore, JP Morgan analysts hace explicitly recommended avoding shares of Khazakmys and Anglo American. The latter has also been downgraded by Bank of America Merrill Lynch. FTSE 100 down 35 to 5,817.
1006: Nomura has weighed in today with this analysis of the relative merits of owning shares of British American Tobacco vis-a-vis its main rival Imperial Tobacco: "Although on a headline basis we expect the company to report margins up for the year (+30 basis points), on an organic basis we have them running down circa 20 basis points – as per the first half 2012 stage (reported margins +20bp versus organic margin flat). This reflecting the increased cost of the new top line focus. With concerns that the new top line focus will fall short and the increased spend weighing on margins we feel the company’s core 2013 Enterprise value/EBITDA at 10x should be trading at a discount to BAT (9.6x) and not a premium." FTSE 100 down 27 to 5,825.
0901: The German IFO business confidence index for the month of September has come in at 101.4 points (Consensus: 102.5).
0812: The week has got off to a dull start, with Eurozone concerns rearing their head again. There were renewed concerns over the single currency region following France and Germany's failure to agree a schedule for initiating shared oversight of the Eurozone's banking sector. A mere half a dozen Footsie constituents are in positive territory, and three of those - Capital Shopping, Hammerson and British Land - are property stocks. Miners and financials are suffering the most, with Anglo American labouring under the additional burden of an upgrade from BofA Merrill Lynch. FTSE 100 is down 24 at 5,829.