1138: Nomura has lowered its forecasts for High Street retailer Marks & Spencer (M&S) ahead of the group’s third-quarter trading update (January 10th), but has retained its ‘buy’ rating and 420p target price for the stock. Based on recent Kantar market data points and comparatives, the broker expects M&S to report a UK retail like-for-like (LFL) sales decline of 1.4 per cent in the third quarter. Nomura foresees a large drop in clothing sales but a robust performance in food.
1026: UBS has this morning downgraded its view on Fresnillo. In its analysts´ own words: ‘[we are] downgrading Fresnillo (FRES) from Buy to Neutral as a result of recent share price appreciation. Since September 10th, 2012, FRES is up 7 per cent versus silver down 9 per cent and our average silver stock under coverage down 2 per cent. We believe this outperformance was driven by increased investor appetite for high-quality assets (which FRES offers). FTSE 100 down 5 to 6,042.
0930: The UK service sector purchasing managers´ index (PMI) for the month of December fell to 48.9, after a reading of 50.2 for the previous month. Consumer credit increased by 100m pounds (Consensus: 0.0m).
0920: Shares of BP seem to be benefitting from yesterday´s settlement between US outfit Transocean and the US Department of Justice. For Zak Mir, Senior Analyst, Institute of Trading and Portfolio Management: ‘BP was the missing ingredient in the FTSE 100′s December ‘Santa Rally’, and the reason it could not quite crack 6,000 until the New Year. Now the oil giant is likely to hold the key to the UK index maintaining 6000 and perhaps even achieving the ultimate technical goal of a 6,300 target. From now on it will be worth checking to see whether the BP share price can remain above its 200 day moving average at 434p – above which the UK index should be above 6000. The only real word of warning is that historically the oil majors – BP and Royal Dutch Shell – tend to be the last to join rallies – moving later (literally like oil tankers that take extended distances to turn around).
0820: As expected, the FTSE has started the session marginally lower, taking its lead from the US, where last night shares ended the session with modest declines following the release of minutes from the Federal Reserve’s December policy meeting. During the meeting policy-makers indicated that they believed the bond-purchase programmes would operate until December at the latest. UK company news has been fairly light this morning, but did include power systems giant Rolls-Royce, which is to provide repair and support services for aircraft engines operated by the US Marine Corps and Air Force as part of a contract worth $52.2m. Meanwhile, mining giant Anglo American announced that it has agreed to sell its 70% interest in the Amapá iron ore mine in Brazil. The FTSE is down three points at 6,045.