FTSE CLOSE: Santa rally finally gets off the ground; third-quarter GDP revised up to 0.6%
By This Is Money ReportersLast updated at 5:31 PM on 22nd December 2011
The owner of British Airways helped lift the London market today after it announced a £172.5million deal to buy BMI from Lufthansa.
The acquisition, if approved by regulators, has the potential to boost International Airlines Group's (IAG) operating profits by more than 100million euros (£83million) in 2015.
IAG's shares were up by 3 per cent, or 4.8p to 149.9p, while the FTSE 100 Index closed 67.2 points higher at 5457.
The stockmarket gains were despite third quarter US GDP growth being revised downwards to 1.8% from 2 per cent after consumer spending was lower than previously estimated.
The negative effect on confidence was partly offset by the lowest unemployment benefit claims since April 2008.
While US third quarter figures were downgraded, the UK saw its growth for the same period revised upwards to 0.6 per cent from its previous estimate of 0.5 per cent.
However, this had little impact on shares, partly because the Office for National Statistics also revised the previous quarter's figures to show the economy ground to a halt, whereas it had earlier estimated growth of 0.1 per cent.
The pound was up against the dollar at 1.57 following the revisions to the GDP data of both countries. Sterling was flat against the euro at 1.20.
Banks were again among the biggest risers as they continued to benefit from yesterday's move by the European Central Bank to prop up the beleaguered banking sector.
The biggest liquidity operation ever for the central bank saw nearly 489billion euros (£409.3billion) of three-year loans taken up by 523 unnamed banks.
Lloyds rose 0.9p to 25.9p, Royal Bank of Scotland lifted 0.8p to 20.6p and Barclays added 4.2p to 176.1p.
Heavily-weighted commodity stocks also showed strong gains, with BP up 10.8p to 450.3p and miner Kazakhmys ahead 31.5p at 917p.
Hedge fund Man Group was on a shortened fallers' board after two brokers lowered their price target for the group. Shares were down 0.5p to 125.4p.
Outside the top flight, there was much-needed cheer for rival groceries delivery chain Ocado after a week of heavy losses sparked by a profits warning. Shares had fallen to record lows but were up by 12 per cent or 6.2p to 59p today.
And shares in ailing Blacks Leisure rose after reports it had received a flurry of bids to buy all or part of the company ahead of today's deadline, with Edinburgh Woollen Mill reported to be the frontrunner. Shares rose, 27 per cent, or 0.4p to 1.8p.
The biggest Footsie risers were Old Mutual up 5.4p at 135.6p, Royal Bank of Scotland ahead 0.8p at 20.6p, Evraz up 14.7p at 390p, and Lloyds Banking Group ahead 0.9p at 25.9p.
The biggest Footsie fallers were Vedanta Resources down 25p to 1017p, Randgold Resources off 115p at 6585p, Carnival down 24p at 2107p, and Compass Group off 3.5p at 588p.
15.20: Markets appear to have shrugged off a downgrade to growth in the world's biggest economy.
The Dow Jones opened flat after third-quarter U.S. GDP growth was revised downwards to 1.8 per cent from 2 per cent, with consumer spending lower than previously estimated.
However, the downward effect on confidence was partly offset by the lowest unemployment benefit claims since April 2008 and other upbeat economic data, and the Dow moved up 34.1 points to 12,141.8 in later trading.
The FTSE 100 is 72.2 points higher at 5,461.93 as the end of the London session approaches.
It was unruffled this morning by an upgrade to UK third-quarter GDP to 0.6 per cent from 0.5 per cent.
Banks were among the top risers again after yesterday's European Central Bank initiative to offer cut-price loans to the sector.
Lloyds was the biggest gainer, up 0.9p to 25.9p. Royal Bank of Scotland lifted 0.7p to 20.5p and Barclays added 4.5p to 176.4p.
The Dow Jones is up 38.2 points at 12,145.9 after a mixed bag of U.S. economic data.
Weekly jobless claims fell but third-quarter economic growth was revised down to 1.8 per cent from a previous estimate of 2 per cent.
Meanwhile, November consumer confidence data came in ahead of expectations while an index of leading economic indicators pointed to further growth going forward.
The FTSE 100 is 62.4 points higher at 5,452.1.
13.15:
Banks are among the biggest risers again today, helping pull the FTSE 100 63.8 points higher to 5,453.5.
The biggest liquidity operation ever by the European Central Bank has boosted the sector for the second day running, sending Royal Bank of Scotland up 0.6p to 20.4p, Barclays 3.9p higher to 175.8p and Lloyds ahead by 0.7p to 25.6p.
A broad-based rally for heavily weighted commodity stocks was also behind the positive momentum, with BP up 12.3p to 451.9p and miner Kazakhmys ahead 25.8p at 911.3p.
Other heavyweight stocks on the rise included Aviva, up 6.7p at 298.5p, and RSA Insurance, up 1.9p at 103.9p.
Hedge fund Man Group topped a shortened fallers' board after two brokers lowered their price target for the group. Shares were down 1.8p to 124.2p.
Figures released today upgrading the UK's third quarter growth had little impact on trading.
Simon Smith, chief economist at FXPro, said: 'The upward revision to third quarter GDP data in the UK from 0.5 per cent to 0.6 per cent quarter on quarter will make the slowdown in the fourth quarter that much more dramatic, hence the limited reaction in markets to the latest news.'
11.05:
The FTSE 100 is holding onto gains, trading up 63.8 points at 5,453.6 but not making further headway.
Chris Beauchamp, market analyst at IG Index, said the wind-down to Christmas had begun in earnest.
'GDP figures on the UK provided little in the way of excitement, with third-quarter growth lifted by 0.1 [percentage point] to 0.6 per cent,' he said.
'Any nascent optimism generated by this was quickly demolished by a downward revision to the second quarter’s figure, which was cut from the Scrooge-like 0.1 per cent growth to no growth at all.
'Trading this afternoon might get a bit more interesting, given the avalanche of U.S. data out later.'
We have more here on IAG's deal to buy BMI, which has sent shares in the British Airways owner up 2.9p to 148p.
10.40:
We have more here on the upward revision in third-quarter GDP growth to 0.6 per cent from the previous estimate of 0.5 per cent.
The new reading does not materially change the story of an economy that is struggling to grow, according to Howard Archer of economic forecaster IHS Global Insight.
'In fact, the second quarter performance was revised down to show flat activity (from previously reported marginal growth of 0.1 per cent) so year-on-year growth in the third quarter was unrevised at 0.5 per cent,' he said.
'We expect economic activity to be essentially flat in the fourth quarter, resulting in overall GDP growth of 0.9 per cent in 2011.'
The FTSE 100 remains buoyant, up 75.5 points at 5,465.2.
Brent crude is trading at $107.80 a barrel while gold is at $1,616.90 an ounce.
Futures trading is currently signalling a higher open on Wall Street, but it's a busy day for U.S. economic data which could change investors' mood later.
10.10:
The economy grew more strongly than previously thought between July and September, the Office for National Statistics has revealed.
Gross domestic product (GDP) grew at 0.6 per cent in the period, revised up from a previous estimate of 0.5 per cent. However, growth between April and June was downgraded to zero from 0.1 per cent.
Meanwhile, the much-anticipated 'Santa rally' seems to have finally taken off. The FTSE 100 gained 62.9 points to trade at 5,452.7 by mid-morning.
Shares in the owner of British Airways and Iberia rose today after it announced a £172.5million deal to buy BMI from Lufthansa.
The acquisition, which is subject to competition clearance, has the potential to lift International Airlines Group's (IAG) operating profits by more than €100million in 2015.
IAG shares were up by 2 per cent or 2.55p to 147.65p.
Banks were again stronger in the wake of yesterday's move by the European Central Bank to prop up the beleaguered banking sector with nearly €489billion (£409.3billion) of three-year loans.
Royal Bank of Scotland lifted 0.45p to 20.3p, Barclays added 3.9p to 175.85p and HSBC cheered 7.6p to 487.5p.
Other heavyweight stocks on the risers' board included BP, which added 7.7p to 447.2p, and Aviva after a rise of 5.5p to 297.3p.
'For now the FTSE is heading higher and so maybe, just maybe, we might see that gain for the month of December,' said Simon Denham of Capital Spreads.
He said the market was 'a little perkier' following a flat to positive session for U.S. markets and if it wasn’t for that would probably be much lower.
'US investors seem to be gearing up for Christmas and the year end much more so than their European counterparts,' he commented.
'In reality the US economy is growing well and some of the recent economic data has been surprising to the upside. It’s as if they are largely ignoring the problems going on in Europe, despite the threat of what it could cause them due to their banking sector’s exposure to Europe’s banks.'
8.30:
The FTSE 100 is 41.2 points higher at 5,430.9 shortly after the opening bell.
The German DAX is up 77.7 points at 5,869.3 while the French CAC 40 is ahead 34 points at 3,064.5.
Preview: The FTSE 100 is seen opening flat to slightly higher on the final full trading day before the Christmas break.
The benchmark index closed down 29.86 points at 5,389.74 yesterday, as investors worried that the European Central Bank's hefty loans to banks would not be enough to help drag the eurozone out of its debt crisis.
European banks took nearly €490billion in three-year cut-price loans from the ECB, easing credit crunch worries but fuelling fears over the health of financial institutions and the role of the central bank in fighting the crisis.
'Furthermore the failure to deal with the failing banks also puts the good banks under pressure, as there is no discernible way to distinguish them.'
In terms of economic data, the final reading for third-quarter GDP is scheduled for release later.
Across the Atlantic, where there was a steady performance overnight from U.S. blue chips, investors will also get the final reading for third-quarter GDP, plus manufacturing, jobless and consumer sentiment data.
Stocks to watch today include:
Blacks Leisure: The Scottish clothing group Edinburgh Woollen Mill is among the retailers that will today submit bids to acquire Blacks Leisure, the troubled outdoor specialist, according to the Independent.GKN: Shares in the auto parts group rose on Wednesday on revived bid hopes, with Singapore-based Quest Global Engineering, backed by Warburg Pincus, said to be putting the finishing touches to an offer which will hit trading screens early in the new year, the Daily Mail's Market report said.
Supermarkets: Food retailers aim to increase trading space by almost 50 per cent as the biggest store opening programme in history gets underway, the Guardian said.
SVM Global Fund: The company holds its annual general meeting.
No hay comentarios:
Publicar un comentario