Quiet week ending session see’s FTSE lose small as broker cuts weighs on miners
City Index March 2, 2012 8:20 PM
<p>Mining stocks were the drag in an otherwise quiet trading session on Friday to end the week, whilst a higher than expected 2012 deficit for […]</p>
Mining stocks were the drag in an otherwise quiet trading session on Friday to end the week, whilst a higher than expected 2012 deficit for Spain kept investors on alert.
It’s been a quiet end to the trading week, with the FTSE 100 trading between small losses and flat territory within a tight trading range as investors showed neither appetite to add to or reduce their stock holdings.
Much of the moves we have seen in stocks today have been dictated by two factors; investors reacting to changes in broker ratings on stocks and the fact that Spain has set a higher than previously expected deficit target for this year.
Given the fact that the weekend is approaching and there is a lack of significant economic data out today, activity has been relatively quiet.
Spain deficit target higer than expected
The higher than expected deficit target of 5.8% of GDP set out by Spain as part of their 2012 budget was somewhat disappointing as its misses the EU agreed deficit target of 4.4% of GDP, whilst at the same time, is likely to keep ratings agencies on high alert as yet again, it seems the fiscal goalposts continue to be moved.
Whilst the deviation from target may not appear to be huge, it does send a clear signal out to Europe and other indebted nations that despite the strong rhetoric being issued by Germany and its European brethren for a fiscal compact, the autonomy of fiscal decision making at euro zone states remains intact even at a time of huge collective risks.
Miners the key drag
From a sector perspective, it is the miners that are a key drag on the UK Index, with the FTSE 350 mining sector losing 0.4% and this has countered much of the 0.5% gains in the FTSE 350 banking sector. Had it not have been for mining weakness today, which has mostly been triggered by weaker commodity prices and negative broker notes concerning some of the key FTSE 100 mining stocks, the FTSE 100 could well have been closing at its highest weekly close since July last year.
Kazakhmys shares fall 14% in three days
Kazakhmys is one of the key mining drags on the FTSE 100 today, with its shares continuing to fall after both Numis and Societe Generale both cut their views on the miners share price performance following the release of falling 2011 profit.
Numis cut their view on the stock to reduce from a previous stance of ‘hold’, cutting their price target by 13% to 950p whilst Soc Gen were equally negative, cutting their previous view of ‘buy’ to hold with a new price target of 1,000p, with both highlighting the downwardly revised guidance from the firm. Kazakhmys shares have now fallen as much as 14% over the past three trading sessions
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.