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Stocks fall after Republicans cancel 'plan B' vote
Market Movers
techMARK 2,116.37 -0.73%
FTSE 100 5,918.63 -0.67%
FTSE 250 12,341.31 -0.66%
Concerns over the US 'fiscal cliff'
increased overnight after House Speaker John Boehner cancelled a vote
on a back-up tax-cut plan after failing to receive enough support by his
own party. As expected, stock markets across Europe were registering moderate losses in early trading on Friday. Market analyst Michael Hewson from CMC Markets
said: "It’s one thing when Republicans can’t agree with Democrats on
tax rises andspending cuts with respect to the on-going saga of the
fiscal cliff negotiations, but quite another when Republicans can’t even
agree amongst themselves as House leader John Boehner’s much trumpeted
plan B went the way of the fairies as Republicans couldn’t even agree
amongst themselves about what form plan B would take, and as such the
vote on it was pulled. "This lack of agreement pretty much
guarantees that any solution is likely to push beyond the January
deadline and increase market uncertainty at a time when volumes will be a
lot lighter than usual," Hewson said. Two surveys of consumer confidence disappointed this morning: the GfK consumer
confidence survey in the UK fell from -22 to -29 in December, missing
the -25 forecast; while the forward-looking German GfK survey fell from
5.8 to 5.6 for January, missing the 5.9 estimate. Meanwhile, the Chinese MNI flash business sentiment indicator fell from 53.78 to 52.23 in November.
Around 09:30 in London will see the release of the final reading of UK
third-quarter gross domestic product (GDP) figures. Initial estimates
showed that the economy expanded by 1.0% in the three months to the end
of September; the final reading is expected to remain unchanged.
Stateside, figures are expected to show that personal income rose by
0.3% in November (0% change in October) and personal spending increased
by 0.4% (-0.2% previously). Meanwhile, the University of Michigan
confidence survey is forecast for a slight rise from 74.5 to 75 in
December.
Risk appetite wanes
Mining and financial stocks slipped early on as risk appetite was scaled back on the back of developments in US budget talks. ENRC, Fresnillo, EVRAZ and Barclays were among the worst performers on the FTSE 100. ENRC was being weighed down by a ratings cut by Goldman Sachs to 'neutral' this morning. Even Xstrata was
under the weather despite saying that it is set to boost ore production
by a further third at its Lady Loretta mine in north-west Queensland,
Australia. BAE Systems fell despite signing a £2.5bn
deal with the government of Oman to supply of Typhoon and Hawk Advanced
JetTrainer aircraft. This comes two days after the company warned that
full-year underlying earnings could be hit by three pence per share if
it cannot agree on pricing on a large Saudi Arabian Typhoon aircraft
contract. Serviced office provider MWB Business Exchange gained after FTSE 250 peer Regus
launched a fresh offer for the company. Regus is offering £40m for the
group, well below the previous offer of £60m in May 2011.
| AIM/Small Cap Report |
FTSE 100 - Risers
United Utilities Group (UU.) 688.00p +2.08%
Pennon Group (PNN) 649.00p +2.04%
Severn Trent (SVT) 1,589.00p +1.27%
Randgold Resources Ltd. (RRS) 6,015.00p +0.84%
Tesco (TSCO) 338.95p +0.10%
British American Tobacco (BATS) 3,110.00p 0.00%
Weir Group (WEIR) 1,863.00p 0.00%
SABMiller (SAB) 2,844.50p -0.02%
Smiths Group (SMIN) 1,180.00p -0.08%
Morrison (Wm) Supermarkets (MRW) 264.40p -0.08%
FTSE 100 - Fallers
Evraz (EVR) 260.30p -2.51%
Eurasian Natural Resources Corp. (ENRC) 273.90p -2.46%
Barclays (BARC) 260.85p -2.23%
BAE Systems (BA.) 340.90p -2.04%
Fresnillo (FRES) 1,842.00p -1.92%
Diageo (DGE) 1,815.00p -1.81%
Vedanta Resources (VED) 1,135.00p -1.73%
Anglo American (AAL) 1,855.00p -1.67%
Wood Group (John) (WG.) 734.50p -1.67%
Burberry Group (BRBY) 1,227.00p -1.60%
FTSE 250 - Risers
Stobart Group Ltd. (STOB) 105.20p +3.65%
Raven Russia Ltd (RUS) 64.00p +1.91%
Jupiter Fund Management (JUP) 285.30p +1.17%
Redrow (RDW) 163.20p +0.93%
Telecity Group (TCY) 782.50p +0.90%
Temple Bar Inv Trust (TMPL) 1,000.00p +0.81%
SVG Capital (SVI) 286.00p +0.63%
Talvivaara Mining Company (TALV) 107.30p +0.56%
Kentz Corporation Ltd. (KENZ) 392.00p +0.54%
Domino's Pizza Group (DOM) 496.60p +0.49%
FTSE 250 - Fallers
Kenmare Resources (KMR) 30.76p -3.12%
Shanks Group (SKS) 82.35p -2.83%
Soco International (SIA) 345.10p -2.82%
William Hill (WMH) 347.30p -2.55%
Spectris (SXS) 2,001.00p -2.39%
Fidessa Group (FDSA) 1,482.00p -2.37%
ITE Group (ITE) 237.40p -2.06%
Vesuvius (VSVS) 345.20p -1.93%
Synthomer (SYNT) 189.10p -1.77%
Ruspetro (RPO) 75.21p -1.75% |
| UK Event Calendar |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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INTERIM DIVIDEND PAYMENT DATE
Establishment Inv Trust, Invensys, Investment Company, MS International, Tesco
QUARTERLY PAYMENT DATE
BP, Molex Inc., Molex Inc. 'A' Shares
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Personal Consumption Expenditures (US) (13:30)
Personal Income (US) (13:30)
Personal Spending (US) (13:30)
U. of Michigan Confidence (US) (15:00)
GMS
Monitise, Skyepharma
EGMS
Banco Bilbao Vizcaya Argentaria SA
AGMS
Berkeley Mineral Resources, Ludgate Environmental Fund Ltd., Mining
Investments Resources, Norseman Gold, Nova Resources Limited (DI),
Zambeef Products
UK ECONOMIC ANNOUNCEMENTS
Balance of Payments (09:30)
Current Account (09:30)
GDP (quarterly national accounts) (09:30)
GFK Consumer Confidence (00:01)
Index of Services (09:30)
Public Sector Finances (09:30)
FINAL DIVIDEND PAYMENT DATE
CVS Group, Dunelm Group, Hornby, JPMorgan Japanese Inv Trust, Northern
Venture Trust, St Ives, Standard Life Equity Income Trust
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| Friday newspaper round-up |
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'Fiscal cliff', UBS, UK banks...
The fate of US negotiations to prevent the fiscal cliff
were thrown into turmoil after efforts by Republican leaders in the
House of Representatives to pass a back-up plan to prevent most of the
looming tax increases collapsed amid a conservative backlash. After
calling a dramatic emergency meeting of his own Republican party’s
lawmakers, John Boehner, the House speaker, issued a statement saying
there would be no vote on Thursday night on the Republican “plan B”, as
planned. “The House did not take up the tax measure today because it did
not have sufficient support from our members to pass. Now it is up to
the president to work with Senator [Harry] Reid on legislation to avert
the fiscal cliff,” Mr Boehner said, referring to the Democratic Senate
majority leader. [Financial Times]
Investigations into potential Libor rigging at UBS
have widened to Hong Kong after the Swiss bank admitted fraud, agreed
to pay £940m in fines for manipulating the inter-bank rate, and saw two
of its traders charged with conspiracy. The Hong Kong Monetary
Authority, the central bank, launched an inquiry into UBS after
receiving information from overseas regulators about “possible
misconduct” related to the local inter-bank rate, Hibor, and other Asian
reference rates. HKMA said it was looking into whether there had been
“any material impact on Hibor” and that it would work with foreign
regulators to “consider further actions that need to be taken”. [The Telegraph]
The Bank of England must be handed the legal authority to break up banks
that misbehave, the Parliamentary Commission into Banking Standards
will today tell the Chancellor, George Osborne. The Commission’s
chairman Andrew Tyrie told The Independent that the failure to do this
could put Britain at risk of a fresh financial crisis. In a 140-page
report, coming just two days after UBS was fined more than £900m for
attempting to fix Libor interest rates, the Commission said existing
plans to reform banking and impose a ring fence to protect retail
depositors fell “well short of what is required”. Mr Tyrie also said the
revelations of what went on at UBS “beggar belief” and provided “the
clearest illustration yet that a great deal more needs to be done to
restore standards”. [The Independent]
The chief executive of Deutsche Telekom
has revealed surprise plans to step down at the end of next year,
ending a 16-year career at the German phones company. René Obermann, who
has been in charge for seven years, told the board that he wanted to be
closer to the operations of a business and be involved in something
more entrepreneurial. Mr Obermann, 49, does not have a job to go to and
will not be receiving a payoff, despite having a contract that was not
due to expire until late 2016. [The Times]
Peter Madoff
will serve 10 years in prison for his role in his older brother's
multibillion-dollar Ponzi fraud scheme, a US judge said on Thursday.
Peter Madoff, 67, pleaded guilty in June to criminal charges including
conspiracy to commit securities fraud for falsifying the books and
records of the investment advisory company founded by his
brother,Bernard Madoff. He agreed at the time not to oppose a request by
prosecutors for a maximum 10-year prison sentence and agreed to an
order requiring him to forfeit a symbolic $143.1bn. US district court
judge Laura Taylor Swain approved the sentence on Thursday. [The Guardian]
Troubled BlackBerry maker Research In Motion
(RIM) lost one million subscribers in the last quarter, the first drop
in users in the company's history. The news came as RIM reported better
than expected revenues of $2.7bn (£1.6bn), although they were still down
47% compared with last year. Excluding one-time items related to
restructuring and other issues, RIM reported a loss of $114m or 22 cents
a share for the three months ending 1 December. [The Guardian]
The chief executive of Ofcom has said that he has “no idea” how much the fourth-generation mobile spectrum auction
will raise, despite the Chancellor having booked £3.5 billion from it.
Announcing the seven telecoms companies that have each paid £100,000 to
enter Britain’s biggest spectrum sale, Ed Richards said that the
regulator’s prerogative was not to raise the highest amount of money
possible, but to ensure efficient use of the spectrum and competition.
Political opponents had accused George Osborne of manipulating the
likely receipts when he announced in the Autumn Statement this month
that the money from the 4G auction would be accounted for this financial
year and spent on new infrastructure projects such as education
colleges. Ofcom put a reserve price on the sale of £1.3 billion last
month but yesterday refused to estimate how much it thinks the auction
will raise. Analysts forecast a total of between £2 billion and £4
billion. [The Times]
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