LONDON (SHARECAST) - 1630:Close London stocks closed lower today, although off their worst levels of the session. That after the World Bank lowered its growth forecasts for the Chinese economy, while warning that that economy´s expansion could slow further. Defensive issues such as supermarket chains Morrison and Tesco led gains on the Footsie, along with some of this year´s other stalwarts, such as Hargreaves Lansdown. Mirroring those macro concerns, profit warnings from Michael Page and Cookson Group also weighed on sentiment today. Halfords outperformed the wider market after analysts at HSBC revised its price target upwards. FTSE 100 down 29 to 5,842.
1610: This is Charles Stanley´s take on the top-share index´s current situation from a technical perspective: "The FTSE 100 rallied strongly [last week] following two weeks of losses, even if its 128-point advance was not quite enough to recoup all of the ground lost in that fortnight. The bulls will be encouraged that a minor breach of the index’s short-term uptrend was quickly negated and that the rising trajectory was re-established, although there should still be come concern that, while US markets are testing levels last seen almost five years ago, the UK index is still struggling to get back to where it was in March (when it topped out at 5965). Of course, it is still not beyond the realms of possibility that it could break higher over the next couple of weeks, but a significant shift in sentiment is going to be necessary before that can happen, not least because traders have obviously been reluctant to haul the FTSE through the 5900 level, and keep it there."
1501: Employees at Xstrata’s Eland platinum mine in South Africa are on an ‘illegal strike’, according to Reuters. A company spokesman has told the news agency that the strikes begun last Friday and operations are running on a skeleton staff. Despite the news, the stock is down only 0.5 per cent, broadly in line with the mining sector average decline of 0.7 per cent.
1436: Halfords is continuing its impressive rise, gaining 4.2 per cent today from 302.6p to 315.6p, after HSBC hiked its target price for the stock from 215p to 330p, keeping its ‘neutral’ rating. The share price is now up over a fifth over the last week after announcing on Thursday that it had appointed former Pets at Home CEO as its new frontman and full-year profits will be at the top end of guidance. The FTSE 100 is up 36 points at 5,835.
1410: BP (down 0.2 per cent) has just announced that it is selling its Texas refinery and associated assets to American peer Marathon Petroleum for a total of 2.5bn dollars, as it continues to reposition its business in the US. ‘Today's announcement is the second major milestone in the strategic refocusing of our US fuels business,’ said Iain Conn, the CEO of BP’s global refining and marketing business. The FTSE 100 is down 41 points at 5,830.
1330: Stocks are down slightly with worries about companies´ earnings grabbing the headlines. That ahead of the semi-official start to the corporate earnings season Stateside, tomorrow, when Alcoa releases its latest quarterly earnings. Earnings at S&P 500 companies are expected to decline for the first time in twelve quarters; by 2.7% according to FactSet. The biggest drops are expected at Energy and Materials firms, while the bottom-line at Financials is expected to rise by 10%. The latter, coming on the back of improved capital markets activity and a buoyant mortgage market, will be the largest of all industry groups. A rebound in levels of corporate profitability is currently being forecast for the last quarter of this calendar year, but investors will be watching to what degree exactly -or not- these forecasts survive the earnings season unscathed.
1140: A profit warning from materials science company Cookson has predictably put a huge dent in its share price but has also had a malign effect on materials technology firm Morgan Crucible. Weaker trading in Cookson's Engineered Ceramics division is responsible for the profit warning. Recruiter Michael Page also warned on profits this morning, but it has got off relatively lightly in comparison with sector peer Hays, which is due to issue its third quarter update tomorrow. FTSE 100 is down 48 at 5,823.
1034: The FTSE 100 is stuck firmly in the red, trading down 43 points at 5,828, with mining stocks weighing heavily on the benchmark. Evraz is continuing to lead the decline (down 5.3 per cent) after a downbeat broker note from Nomura this morning. The broker revised its steel demand growth forecast from 3.0 per cent to 0.0 per cent for 2013, saying that it expects 'further weakness' in the sector. Meanwhile, concerns about the Chinese economy have dented other resource stocks (Vedanta, ENRC and Kazakhmys) after the World Bank cut its 2012 growth estimate for China from 8.2 per cent to 7.7 per cent, saying that the economy has been hit by weak export demand and investment growth.
0930: The Sentix survey of Eurozone investors´ confidence has come in at -22.2 for October (Consensus: -20.9), versus -23.2 for the month before.
0913: The number of Footsie stocks in positive territory has crept up to a half-dozen (Carnival, Hammerson, BG, Rexam, Pennon and Tesco), even as the top-share index retreats further. Westhouse Securities has initiated coverage of outsourcing giant Capita with a recommendation for clients to reduce holdings while coverage of sector peer Serco is initiated with a neutral recommendation. Westhouse's preference in the outsourcing sector is Babcock, which it rates as worth buying, with a 1,142p price target. Meanwhile, Helvea has downgraded pharmaceuticals giant Glaxo to 'neutral', with a price target of 1550p. FTSE 100 is down 44 at 5,827.
0805: The week has got off to a downbeat start following the World Bank's decision to cut its growth forecasts for East Asia and Pacific region on Monday, saying it believes there is a risk the slowdown in China could worsen and continue for a longer period than had been expected. Not surprisingly, miners are being hit hardest, but banks are also down in the dumps. BAE Systems holds steady, one of only two Footsie constituents in the blue, despite Invesco Perpetual, which owns 13.3 per cent of the UK defence firm, expressing concerns about the proposed merger with Airbus owner EADS. FTSE 100 is down 42 at 5,829.