A positive finish for the FTSE following a session of fiscal cliff nerves
Fiona Cincotta November 28, 2012 10:10 PM
<p>European markets traded lower for much of Wednesday, as investors replaced the previous session’s optimism following the Greek deal with concerns over the terms and […]</p>
European markets traded lower for much of Wednesday, as investors replaced the previous session’s optimism following the Greek deal with concerns over the terms and whether in fact it would be enough to prevent a weakening of the Eurozone crisis.
However, the biggest trading cue was taken from across the pond to a growing nervousness over whether US lawmakers were putting the world’s largest economy at risk by failing to make progress in the fiscal cliff talks. The markets continued to fall throughout the session disappointed that negotiations had not moved forward.
Late afternoon sentiment changed as US House Speaker John Boehner said that he was optimistic that a deal can be reached to avert the fiscal cliff. In response the markets rapidly reversed and took to positive territory, with the FTSE closing up three points.
Notable movers on the FTSE included United Utilities who finished the day at the top of the FTSE leader board up 2.7%. The rise came after the company reported decent strong gains and announced that first half revenue rose from £793m to £823m. Underlying pre tax profit came in £190m up 3% year on year and above the expected £188m.
Marks and Spencer’s also jumped up over 2% after announcing a substantial reduction in its deficit from £1.3bn in March 2009 to £290 million as of 31st March 2012. ARM Holding also performed well after it was reported that Intel could make a bid for the company at 1200p some 55% higher than where it is currently trading.
On the negative side, as is expected during days of uncertainty, banks and miners suffered at the hands of investors as they looked to take risk off the table. Rio Tinto, Eurasian Natural Resources and Lloyds all shed between 1.5 – 2.2%.
Domestic and European economic data was in short supply today, so investors paid particular attention to US new homes sales figures which came in weaker than expected falling by 0.3% putting extra pressure on the markets. This evening the US Federal Reserve releases the Beige Book economic survey.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.