LONDON (SHARECAST) - The Footsie was trading broadly flat on Thursday morning despite some decent trade data from China and solid debt auctions in the Eurozone, as investors kept a close eye on central bank decisions.
techMARK 2,195.84 +0.11%
FTSE 100 6,104.93 +0.10%
FTSE 250 12,753.08 +0.35%
At midday, the Bank of England announced that it has kept its official Bank Rate at 0.5% and its asset purchase programme at £375bn.
The European Central Bank (ECB), due to report its policy decision in the coming hours, is expected to remain in “wait and see” mode despite the continuing economic troubles in the Eurozone. Experts believe that recent signs of stabilisation in the economic data allow the ECB to stand pat despite the current recessionary environment in the region.
In the following press conference with ECB chief Mario Draghi, he "is expected to retain a dovish tone, suggesting that risk appetite has helped to steady price-action in financial markets and may even produce some positive sounds over the Eurozone staging a mild recovery in 2H 2013," according to market strategist Ishaq Siddiqi from ETX Capital.
Bond auctions and China trade surplus buoys markets
Just 13 points separated the Footsie's intraday low (6,097) and high (6,110) this morning, as markets remained cautious after hitting a near four-year high the day before. The index finished at 6,099 on Wednesday, its highest closing level since May 22nd 2008.
Nevertheless, this morning's well-subscribed bond auction in Spain helped keep the Footsie in the blue, with Spain selling €5.8bn of debt, higher than the €5bn targeted. Spanish 10-year yields on the secondary market dropped below 5% for the first time since March 2011: the borrowing rate on the a benchmark Spanish note was down 15.2 basis points at 4.986% on the day.
Meanwhile, Italian yields on 12-month notes fell to a three-year low at an auction today, at which the Treasury sold €8.5bn of debt.
Market analyst Michael Hewson from CMC Markets said in an e-mail this morning: "It would appear that the 'Draghi Put' is alive and kicking hard in European bond markets".
Chinese trade rebounded strongly last month, also providing a life to sentiment this morning. The trade surplus totalled $31.6bn in December, well ahead of the $19.6bn surplus reported in November and the $20bn forecast. Exports jumped by 14.1% year-on-year, ahead of the 5% estimate, while imports also beat expectations rising by 6%, ahead of the 3.5% estimate.
FTSE 100: Bunzl
International distribution and outsourcing giant Bunzl was leading the riser after completing three further purchases in South America and the US, bringing its 2012 total acquisition spend to £270m. The stock was given an extra lift this morning by Numis which upgraded the shares to 'buy' and lifted its target price from 987p to 1,248p.
Following close behind was industrial group Melrose after Citigroup raised its view on the stock to 'buy' and hiked its target price from 220p to 270p.
Internet purchases supported a moderate rise in sales at Tesco, according to the supermarket chain’s latest trading statement. Group sales in the six weeks to January 5th increased by 3.8% including petrol, causing shares to rise this morning. Oriel Securities upgraded the stock to 'buy'.
Heading the other day was High Street giant Marks & Spencer after reporting worse-than-expected sales figures for the key Christmas period in a trading update that was partially leaked the night before. LFL sales in the UK dropped by 1.8%, worse than the 1.4% decline expected by Nomura.
Banks were performing well this morning with RBS, Lloyds and Standard Chartered making gains. The latter was lifted this morning by Societe Generale, which upgraded its rating to 'buy' and hiked its target price for the shares from 1,530p to 1,900p.
FTSE 250: SIG shrugs off gloomy outlook
Building materials group SIG surged this morning despite warning that construction markets in 2013 are to "remain challenging". Revenues in 2012 totalled around £2,635m, flat on a constant currency basis, though down by 4.0% in sterling due to exchange rate movements. Underlying profit is expected to be no less than £82m. Shares were up around 6% by midday.
TV decoder maker Pace rose after saying that full-year revenue is expected to be ahead of previous forecasts and 4% higher than last year. The West Yorkshire based firm said it expects revenue to be around $2.4bn after a strong second half.
Lighting, signalling and electronics group Dialight was higher after expressing confidence for a "continued strong performance in 2013".
FTSE 100 - Risers
Bunzl (BNZL) 1,064.00p +4.83%
Melrose Industries (MRO) 242.60p +3.45%
Wood Group (John) (WG.) 798.00p +3.10%
ARM Holdings (ARM) 849.00p +2.66%
Eurasian Natural Resources Corp. (ENRC) 320.70p +2.36%
Tesco (TSCO) 357.30p +2.33%
International Consolidated Airlines Group SA (CDI) (IAG) 198.10p +1.75%
Reed Elsevier (REL) 651.50p +1.72%
United Utilities Group (UU.) 698.00p +1.60%
WPP (WPP) 919.00p +1.49%
FTSE 100 - Fallers
Marks & Spencer Group (MKS) 355.50p -4.18%
Associated British Foods (ABF) 1,521.00p -1.62%
Intertek Group (ITRK) 3,111.00p -1.55%
Tate & Lyle (TATE) 769.50p -1.28%
Vedanta Resources (VED) 1,200.00p -1.23%
Unilever (ULVR) 2,364.00p -1.21%
Imperial Tobacco Group (IMT) 2,443.00p -1.05%
Diageo (DGE) 1,780.00p -1.03%
Whitbread (WTB) 2,418.00p -0.98%
Fresnillo (FRES) 1,753.00p -0.96%
FTSE 250 - Risers
Hays (HAS) 91.20p +6.67%
SIG (SHI) 135.00p +6.30%
Centamin (DI) (CEY) 52.10p +4.24%
Chemring Group (CHG) 276.00p +3.60%
Dialight (DIA) 1,051.00p +3.55%
Lonmin (LMI) 308.20p +3.49%
COLT Group SA (COLT) 103.00p +3.00%
Travis Perkins (TPK) 1,201.00p +2.91%
Restaurant Group (RTN) 373.70p +2.66%
Micro Focus International (MCRO) 603.00p +2.55%
FTSE 250 - Fallers
Bwin.party Digital Entertainment (BPTY) 106.80p -4.22%
African Barrick Gold (ABG) 366.30p -3.61%
Rentokil Initial (RTO) 91.50p -3.07%
Home Retail Group (HOME) 120.80p -2.58%
Debenhams (DEB) 103.70p -2.54%
Spectris (SXS) 1,979.00p -1.79%
Bodycote (BOY) 464.20p -1.76%
BlackRock World Mining Trust (BRWM) 609.00p -1.54%
Salamander Energy (SMDR) 196.70p -1.40%
Greggs (GRG) 443.70p -1.18%