LONDON (SHARECAST) - 1630: Close The Footsie closed in the red today despite improving news-flow from the Eurozone which helped to offset some disappointing economic data from Japan. Today's big company news was of course that BP has agreed to the terms of sale agreement for its 50 per cent stake in TNK-BP to Rosneft. The deal is expected to close in the first half of 2013. BP will receive $17.1bn in cash plus shares. In UK economic news, it was announced today that the squeeze on household finances is at its lowest level for nearly two years, according to new figures, but Markit's Household Finance Index for October also showed a steep downturn in consumers' outlook for the next year. The FTSE 100 closed down 13 points at 5,883.
1607: Thomas Cook is shooting higher after analysts at Exane BNP put a trading buy recommendation on shares of the firm. This is what they said: "Thomas Cook has underperformed peers in the past 12 months (-65 per cent). The stock remains a risky call but we believe the risk/reward ratio has become more attractive and some of our concerns are dissipating. The 360m pounds in asset disposals, coupled with looser covenants, make a breach unlikely before 2014. With a new management team in place, we see scope for earnings upside in the UK and France on new cost savings. However, we refrain from turning buyers as the bull-case earnings before interest and taxes (EBIT) margin scenario of 3 per cent estimated for 2014 (vs 2% in our base case) would put Thomas Cook only on par with TUI Travel."
1438: The head of BP's Russian unit is reportedly saying that the company is mulling a share buy-back with the proceeds of the TNK-BP deal. Of interest, analysts at RBC were also of a mind this morning that a deal along the lines of that which has finally been announced would see Rosneft paying under-the-odds for BP's stake.
1342: According to the German government's spokesman, Ireland will not enjoy exceptions to the European Stability Mechanism procedure, although special circumstances are taken into account, DPA is reporting.
1322: Here is a snippet of what Nomura was commenting before the BP announcement: "We acknowledge that removing the uncertainty around BP will support the shares (as it has already done recently), however with limited visibility on the long term, we believe it is difficult to argue for a more meaningful re-rating given the shares now trade largely in line with the group on our estimates – 7.7 times estimated 2013 price-to-earnings multiple versus the sector average of 8.1 times, estimated 2013 enterprise value/discounted cash flow (EV/DACF) of 5.2 times vs a sector average of 5.0 times. In the UK large caps, we prefer to own BG for growth, while our preference remains Shell for income yield." FTSE 100 up 3 to 5,899.
1241: "If there is a question mark over the FTSE 100’s ability to press even higher at this point it is that a bearish divergence has developed on the 14-day RSI (relative strength indicator), and this implies that the rally could be losing steam. Nevertheless, the fact that it remains well above its short-term up-trend (and 50-day moving average) means that traders will be reluctant to abandon long positions until firm evidence appears that the rally is failing and, as things stand right now, that would probably require a drop back through 5800 or so," wrote technical analysts at Charles Stanley this morning.
1209: BP has agreed to the terms of sale agreement for its 50 per cent stake in TNK-BP to Rosneft. The deal is expected to close in the first half of 2013. BP will receive 17.1bn dollars in cash plus shares. Of that amount -which is higher than was expected- 4.8bn will be reinvested. BP will thus receive 12.3bn dollars in net terms and a 19.75 per cent stake in the combined company.
1144: A flurry of phone calls between Dublin and Berlin all weekend led last night to a joint statement that brought a significant political victory for Taoiseach Enda Kenny. Mr Kenny secured a commitment from the German chancellor Angela Merkel to the effect that the Irish case for relief on its gigantic bank debt was indeed a "special" case. That means Ireland's promised debt deal is still on -- potentially including refunding the taxpayer for some of the 64bn euros injected into the banks from EU bailout funds, The Irish Independent newspaper writes.
1120: Shares in RBS are performing well despite Investec lowering its recommendation for the stock from 'hold' to 'sell', highlighting that the shares trading at 0.6 times tNAV and close to a new 17-month high. US stock futures are pointing to a positive start on Wall Street, helping the FTSE 100 keep its head above water. Investors Stateside are awaiting corporate earnings from some heavyweights, including Caterpillar, Texas Instruments, Hasbro and Yahoo! later today. FTSE 100 up seven at 5,903.
1012: The FTSE 100 has jumped back into positive territory, trading nine points higher at 5,905. Mining stocks are helping to provide a lift on the blue-chip index with EVRAZ, Anglo American, Randgold and Antofagasta making decent gains. Banking peers Lloyds and Barclays are also higher.
0855: UK company profit-warnings rose in the third quarter as a “washout summer” and weak domestic and global demand undermined business, Ernst & Young LLP said in a report published on Sunday. Sixty eight London companies issued warnings, versus sixty in the previous three months. That was the worst showing for a third quarter since 2008. Of interest, one large bank strategist is of the opinion that progress was indeed made at last week's European summit -or, at any rate, as much as might have been expected. Aggreko is off on a downgrade out from HSBC over the weekend, to underperform from neutral. GKN is down in line with its sector peers over on the continent. The latter after Deutsche Bank downgraded its view on Valeo to hold. FTSE 100 down 14 to 5,882.
0822: Companies have begun today’s session clearly lower, with earnings fears clearly prevalent, as reflected in this morning’s ‘market-chatter’. That after the sharp drops seen last Friday on Wall Street, following the weak results out from a bevy of heavy-weights, especially in the technology arena. Significantly, some fear that those company updates are a leading indicator for the wider economy. In the same vein as the above, better than expected results out this morning from Philips seem to be mostly attributable to cost-cutting by the firm. It is due to those worries that analysts say that they will be closely watching technical support levels for the main equity benchmarks. Japan’s weak export data out overnight and negative comments from well-known currency analyst Stephen Jen (ex-Morgan Stanley) on the outlook for international trade –again, as a leading indicator for the wider economy- are also dampening sentiment. Looking abroad, it was announced this morning that Spanish Prime Minister Mariano Rajoy has won the important regional elections in Galicia, meaning that he will be able to more easily submit a request for aid. Rajoy's PP party, however, suffered a defeat in the Basque country. FTSE is 18 points lower at 5,878.