- Peripheral bond yields ease
- Markets still digesting Draghi comments
- Barclays up after first-half beat
The Footsie edged higher in early trading on Friday with Barclays providing a lift after its interim results. Markets were still reacting to yesterday’s comments by Mario Draghi, who said that he will do ‘whatever it takes’ to save the euro.
Bond yields in Spain and Italy continued to fall today after the President of the European Central Bank (ECB), Mario Draghi, said the bank would do ‘whatever it takes to preserve the euro…and believe me, it will be big enough’. This is the clearest indication yet the ECB may be prepared to buy the debt of under pressure Eurozone countries in order to drive down yields.
The yield on a Spanish 10-year bond was 12 basis points (bp) lower at 6.808% this morning, while the Italian equivalent was down 4.4bp at 6.012%.
However, Gerhard Schwarz, the head of equity strategy from Baadar Bank, issued a word of caution in an e-mailed note to clients this morning: ‘Investors should remember that there is no quick fix to the crisis. The ECB going alone will probably act not as decisive as sky-high expectations now suggest. Current fiscal policy tools are not near a level that would shield Italy and Spain on a lasting basis from market pressures. Expect the ECB meeting next week to underwhelm.’
FTSE 100: Repentent Barclays beats expectations
A contrite Marcus Agius, Chairman of under-fire bank Barclays, apologised for the company’s involvement in the LIBOR fixing scandal as he unveiled half-year profits ahead of market expectations, causing shares to jump high early on. Adjusted profit before tax in the first half of 2012 rose 13% to £4,227m from £3,725m in the first half of 2011, versus market expectations of £3,958m.
Banking peer HSBC was also in demand after saying that it will offload its 44% stake in card-processing joint venture Global Payments Asia-Pacific for $242m in cash.
Commodities giant Glencore rose as it came closer to completing the £3.9bn takeover of Canadian agricultural grain handler Viterra after being given the all-clear by Australian authorities.
Heading the other way was mining colossus Anglo American after first-half profits plunged from $6,571m to just $2,942m on the back of weaker commodity prices and input cost pressures.
Publishing group Pearson also fell after operating profits came in a little sky of expectations as it admitted that the first half has been a little tougher than expected for some parts of the business.
Goldman Sachs has cut its price targets on Tullow Oil (to 1776p from 2020p) and Royal Dutch Shell (to 2840p from 2980p). Coincidentally, the FT´s Lex column comments today on oil stocks (with specific mentions of BG Group and and Royal Dutch Shell) and highlights the recent volatility in oil quotes and the challenge which that poses for the sector. Oil stocks look cheap -relative to the market- it says, but given pricing pressures that looks about right, it concludes.
FTSE 100 – Risers
Barclays (BARC) 160.45p +4.46%
Carnival (CCL) 2,136.00p +2.54%
Evraz (EVR) 223.50p +1.27%
Weir Group (WEIR) 1,620.00p +1.25%
Marks & Spencer Group (MKS) 327.30p +1.17%
InterContinental Hotels Group (IHG) 1,567.00p +1.10%
Glencore International (GLEN) 311.55p +1.04%
Kingfisher (KGF) 264.20p +0.99%
Sage Group (SGE) 290.90p +0.97%
Eurasian Natural Resources Corp. (ENRC) 379.40p +0.90%
FTSE 100 – Fallers
Pearson (PSON) 1,242.00p -4.02%
Anglo American (AAL) 1,918.00p -2.34%
CRH (CRH) 1,144.00p -2.14%
Polymetal International (POLY) 865.00p -0.97%
Hargreaves Lansdown (HL.) 566.50p -0.87%
Unilever (ULVR) 2,241.00p -0.66%
Severn Trent (SVT) 1,702.00p -0.64%
United Utilities Group (UU.) 697.50p -0.57%
SSE (SSE) 1,303.00p -0.53%
Wolseley (WOS) 2,319.00p -0.47%
FTSE 250 – Risers
UBM (UBM) 624.50p +2.88%
William Hill (WMH) 298.20p +2.69%
Talvivaara Mining Company (TALV) 135.50p +2.65%
Dixons Retail (DXNS) 15.39p +2.46%
Ruspetro (RPO) 140.50p +2.26%
3i Group (III) 204.70p +2.04%
Ocado Group (OCDO) 76.50p +2.00%
NMC Health (NMC) 199.90p +1.99%
Daejan Holdings (DJAN) 2,890.00p +1.98%
FirstGroup (FGP) 218.10p +1.87%
FTSE 250 – Fallers
New World Resources A Shares (NWR) 301.60p -3.24%
Barr (A.G.) (BAG) 417.90p -2.97%
Invensys (ISYS) 241.40p -1.87%
KCOM Group (KCOM) 75.55p -1.56%
Dechra Pharmaceuticals (DPH) 491.20p -1.46%
Petropavlovsk (POG) 415.80p -1.40%
Euromoney Institutional Investor (ERM) 728.50p -1.15%
Cape (CIU) 279.30p -1.06%
Cranswick (CWK) 829.50p -1.01%
TalkTalk Telecom Group (TALK) 174.80p -0.91%
Tags: apologised | barclays | basis points | bond yields | cash commodities | clearest indication | current fiscal policy | equity strategy | footsie | glencore | global payments | high expectations | interim results | italian equivalent | marcus agius | mario draghi | market expectations | market pressures | policy tools | rose 13