Weaker start for EU indices despite Monti arrival ITV leads on ad revenue

The arrival of Mario Monti as the new technocrat leader in Italy following Silvio Berlusconi’s resignation has helped to calm Italian debt markets but it was not enough to trigger more gains for European indices after Friday’s charge higher.

The FTSE 100 traded flat after 90 minutes of trading, whilst the DAX and CAC saw losses of between 0.4% and 0.6%.

It’s been a choppy start to trading, with early gains quickly sold into ahead of an early market confidence call on the arrival of Mario Monti as the imminent new Italian Prime Minister with the auction of Italian five-year bonds.

A look at riskier stock sectors such as mining, oil and banking stocks tells a tale that it has been a rather slow start to trading in London, with these sectors swinging between small losses and gains in the opening hours of trading and lacking direction this morning. Broader European trade saw heavier losses for stocks in France and Germany, with investors naturally keeping a strict eye towards the Italian bond auction.

Considering the strong gains seen in the last 48 hours of trading, at a time when perhaps the fundamental and political strength of Europe may deem this rally as premature, investors have moved to cash in their gains quickly to preserve profit and loss at a time when trader sensitivity remains fairly high.

ITV shares led in trading on the FTSE 100 after the broadcaster said it expected to outperform the broader TV market this year after a jump in revenues by 4% in the first three quarters, beating market expectations. In the third quarter, net advertising revenues grew by 1%, helped by viewers staying on their sofas to watch the Rugby World Cup and popular TV drama Downton Abbey at a time when most analysts had expected little change in advertising revenues. Total revenues grew for the first nine months of the year grew to £1.29 billion. The upgrade in forecast from the channel helped to inspire shareholders and investors alike today, triggering a 3% rally in their respective share price.

Shares in Smith and Nephew jumped 3% also today after BNP Paribas upgraded its stance on the firm’s shares price to ‘outperform’ from ‘neutral’, stating the belief that the underperforming share price could see upside as the company’s $150 million savings plan starts to make an impact on earnings.