FTSE slips 0.6% as investors remain cautious ahead of a busy week for the markets
City Index January 9, 2011 8:52 PM
<p>It has been an uncertain start to the second week of 2012 for the FTSE 100. London’s major index has swung in and out of […]</p>
It has been an uncertain start to the second week of 2012 for the FTSE 100. London’s major index has swung in and out of positivity in a 75-point range, but slipped into negative territory as it heads for the close. Traders are forgiven for indecision though, given the raft of data, meetings, auctions and results due in the next four days.
In their first meeting of 2012, Chancellor Merkel and President Sarkozy announced today that the new budget rule book designed to instil further fiscal discipline will be complete by January 30, a month ahead of schedule. They will also look to accelerate capital contributions to the bailout fund in order to stem the debt crisis.
Of concern to the market though is their insistence that private investors (including banks and hedge funds) take losses on their Greek bonds to help reduce the Greek debt burden. Talks between Greek government officials and private bondholders are progressing but, according to a Reuters source, “were very difficult and likely to be unsuccessful”. The euro is now trading at the lows of the day against the USD.
London risers and fallers
Following the release of clinical trial results, GlaxoSmithKline has announced it will file for regulatory approval for once-a-day inhaled lung drug Relovair. The stock is trading down 4.48% to 1430p and is amongst the biggest fallers on the FTSE 100. Whilst warranting selling commercially, the trial data suggests the drug is not superior to GSK’s existing respiratory drug, Advair.
In a welcome respite from news about their regulatory problems, Indian energy firm Essar Energy announced an expansion to its Vadinar Refinery. Phase 1 is near completion and the increase in output will commence in March 2012. Clearly the beleaguered company must do more; the shares traded down 4.6% to 163p.
One of the barometers of the UK high street health will update the market on its Christmas sales. The Telegraph states that Marks & Spencer will post good figures and that its non-food sales might even be steady with last year.
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