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Share Price: 51.90
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Ask: 51.96
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London close: Markets end the week with slight gains

Fri, 11th Jan 2013 17:04

- Japan launches new stimulus package - Chinese inflation rises in December - Tullow misses production forecasts in 2012UK stocks finished with slight gains on Friday on the back of plans for economic stimulus in Japan, as markets were able to shrug off some weakness in the mining sector.The FTSE 100 closed just 32 points higher than it did last week, but has now gained around 3.8% since the start of 2013.News from Japan boosted sentiment in morning trade today, where newly-elected Prime Minister Shinzo Abe has unveiled a 10.3tn-yen stimulus package, aimed at raising economic growth by 2% and creating 600,000 new jobs. The plan "shows a clear commitment to economic revitalization", Abe said at a conference in Tokyo. However, inflation data in China proved a drag on the heavyweight mining sector in London, limiting gains on the Footsie, as higher-than-expected price rises in December dampened hopes for further stimulus. Chinese consumer price inflation rose to 2.5% in December, from 2.0% the month before, as cold weather resulted in an increase in food prices. The consensus forecast was for a reading of 2.3%. "While the figure remains well below the inflation target of 4%, it has raised concerns that it could lead to a tightening of monetary policy in the first half of this year," according to market analyst Craig Erlam from Alpari.In domestic news, UK industrial production rose by just 0.3% in November, according to the Office for National Statistics, missing the consensus forecast rise of 0.8%.The National Institute of Economic and Social Research reported that the economy remained flat in the last three months of 2012, once the data are adjusted. Significantly, several companies announced plans to cut jobs. Some 1,370 jobs will go as high street camera retailer Jessops shuts down today. Online retailer Play.com announced it would shut down its retail business resulting in more than 200 job losses and Honda announced plans to cut 800 jobs at its Swindon manufacturing operation. Shares of HMV were under pressure."European financial markets have been relatively stable through the course of the day, flipping between small gains and losses but ultimately going nowhere as investors hold back from taking bold moves ahead of high-profile US 4Q earnings next week," added market strategist Ishaq Siddiqi from ETX Capital.Wells Fargo, which kicked off earnings season before the opening bell this morning in New York, will be followed next week by heavyweights Goldman Sachs, Morgan Stanley, JPMorgan and Bank of America.To be had in account however, some technical analysts are wary of the recent sharp rise in investors' bullishness across the pond, Stateside. That may explain help to explain why the Footsie is finding it so hard to climb above technical resistance at 6,100. FTSE 100: IAG flying high; miners unwantedBritish Airways and Iberia owner IAG was in demand this morning after UBS upgraded the stock from 'neutral' to 'buy', following its underperformance against other European airline shares under the broker's coverage. "We think that IAG could be the laggard most likely to outperform in 2013 should it achieve the concessions the company wants from Iberia staff," the broker said.The miners were firmly out favour today after the Chinese inflation figures, with sector peers BHP Billiton, Antofagasta and Rio Tinto in the red. The sector was dampened further by comments from RBC Capital Markets, which recommended that clients hold fire on mining stocks for now. "Despite our belief in increased fund flows to the sector this year, economic growth is not stellar and we believe a significant re-rating in the miners will be driven by free cash flow generation which we forecast closer to 2014E." Comments from some other brokers were even worse. This is some of what Bank of America-Merrill Lynch told clients today: " (...) This valuation suggests that BHP is over-owned and we believe many investors currently favour BHP, as it is seen as safe, high quality and a quasi-oil stock. BHP will, in our view, underperform in a continuing sector rally, whilst also being exposed on the downside in the event that iron ore/oil prices roll over." The broker downgraded BHP Billiton to underperform, setting a price target of 1,900p. Macquarie also lowered its view on BHP and Rio Tinto on Friday, to neutral from outperform. Financial stocks were performing well with asset management firms given a lift by Credit Suisse. The Swiss broker said that the recent improvement in the macro backdrop should drive investor appetite "which bodes well for the asset managers". It upgraded Schroders to 'neutral' and maintained its 'outperform' recommendation for Aberdeen.Elsewhere, insurance giant Aviva was boosted by an upgrade by Citigroup to 'buy'. Banking peers RBS, Barclays and Lloyds were also among the highest risers.Oil giant Tullow was under the weather after missing production forecasts in 2012. The group also revealed that exploration write-offs more than doubled last year due to a number of unsuccessful drilling activities and licence relinquishments. Prime Markets' head of dealing, Richard Curr, said: "The bearish charting configuration fairly reflects waning investor confidence, and as such Prime Markets believes a retest of year lows at 1,098p and beyond is almost inevitable unless or until Tullow can demonstrate a turnaround in fortunes."FTSE 250: Centamin rises on comments from Egyptian officials Gold miner Centamin rose on the back of remarks, overnight, from Egypt's petroleum minister, which seemed to back not rescinding the company's contract for operating at Sukari. As well, Liberum Capital labelled the stock as a compelling buy this morning. The shares have now risen by over a third in the last five days.Price comparison website Moneysupermarket.com surged after saying that adjusted revenue is expected to have risen by 15% to £204.5m last year. Adjusted EBITDA is forecast to have risen 26% to £66m. Meanwhile, Ophir Energy shares dropped to a five-month low as analysts warned investors of possible delays on the exploration venture in Tanzania with BG Group. First Group fell after UBS cut its target price from 180p to 170p and downgraded the stock to 'sell'.FTSE 100 - RisersInternational Consolidated Airlines Group SA (CDI) (IAG) 207.60p +5.43%Aviva (AV.) 380.10p +3.29%Aberdeen Asset Management (ADN) 391.50p +3.00%G4S (GFS) 267.70p +2.33%Schroders (SDR) 1,819.00p +2.25%ITV (ITV) 110.00p +2.14%Reckitt Benckiser Group (RB.) 3,996.00p +2.07%WPP (WPP) 939.50p +2.06%Amec (AMEC) 1,085.00p +1.97%Next (NXT) 3,995.00p +1.78%FTSE 100 - FallersTullow Oil (TLW) 1,186.00p -3.18%BHP Billiton (BLT) 2,075.00p -2.67%Kazakhmys (KAZ) 808.50p -2.12%Johnson Matthey (JMAT) 2,250.00p -1.96%Anglo American (AAL) 2,042.00p -1.45%Antofagasta (ANTO) 1,303.00p -1.44%Rio Tinto (RIO) 3,468.00p -1.24%Randgold Resources Ltd. (RRS) 5,900.00p -0.84%Croda International (CRDA) 2,309.00p -0.82%Severn Trent (SVT) 1,573.00p -0.82%FTSE 250 - RisersCentamin (DI) (CEY) 55.80p +9.09%Supergroup (SGP) 580.00p +6.23%ITE Group (ITE) 241.00p +6.17%Moneysupermarket.com Group (MONY) 168.00p +6.13%Henderson Group (HGG) 143.80p +4.58%Brown (N.) Group (BWNG) 373.90p +4.44%Domino Printing Sciences (DNO) 648.00p +4.26%Taylor Wimpey (TW.) 74.25p +3.99%Galliford Try (GFRD) 807.00p +3.59%Barratt Developments (BDEV) 227.30p +3.46%FTSE 250 - FallersOphir Energy (OPHR) 537.00p -4.53%Ferrexpo (FXPO) 275.40p -2.72%Cranswick (CWK) 866.00p -2.70%FirstGroup (FGP) 195.10p -2.40%Enterprise Inns (ETI) 100.10p -2.34%RPS Group (RPS) 230.00p -2.09%Dignity (DTY) 1,066.00p -1.93%Soco International (SIA) 373.60p -1.84%Tullett Prebon (TLPR) 264.50p -1.82%ICAP (IAP) 320.50p -1.78%BC
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