FTSE dragged down by troubled Anglo American and Imperial Tobacco dividend
Fiona Cincotta January 16, 2013 10:37 PM
<p>European markets started the session moderately lower, taking their lead from weaker Asian stocks. Hitting on sentiment were comments from the World Bank, which is […]</p>
European markets started the session moderately lower, taking their lead from weaker Asian stocks. Hitting on sentiment were comments from the World Bank, which is lowering its global growth forecasts. The head of finance minister for the eurozone is raising the alarm over the recent sharp rise in the single currency. However as the session progressed, markets trimmed their losses and turned flat going into the close on Wednesday.
The DAX finished up 0.2%, the French CAC was up 0.3% and the FTSE closed down 13 points or 0.2%, led by Imperial Tobacco which went ex-dividend this morning.
Across Europe we had been seeing increasing examples of fund managers and investors looking to buy into the dips in the market to increase their equities exposure. The fear of missing an opportunity appears to be outweighing the fear of a correction; however this post fiscal cliff rally is starting to look weaker. Bulls are struggling to lift the markets above recent highs.
Here in the UK Anglo American extended its losses from yesterday after the restructuring of its platinum operations prompted backlash in South Africa from politicians and unions as well as strike action at the mines. The troubled miner has had a difficult two years. A further downgrade by analysts at SocGen to “sell” this morning will do little to install confidence in the stock. Sector peers Xstrata and Glencore also lost over 3% of their value throughout the session.
Tesco also suffered at the hands of investors, losing over 0.7% of its share value following reports that its burgers contained traces of horse meat and pig DNA.
On the positive side, top gainer on the FTSE 100 was TUI Travel, gaining over 4.2% throughout the course of the day as they confirmed that they had been approached by its German parent company, TUI AG, about a merger. Another notable riser was Experian, which rose over 1.7% after it posted an increase in revenue for the three months to December, during which time total revenue from continuing activities increased by 7%.
Across the pond reporting season is on in full swing, with JP Morgan reporting better than expected fourth quarter earnings and Goldman Sachs also smashing forecasts with net revenues at $9.24bn compared to an expected $7.83bn.
Economic data here in Europe was in fairly short supply, with eurozone consumer price index for December being confirmed at 2.2% as expected.
GAIN Capital UK Limited (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.