LONDON (ShareCast) - UK stocks slipped in early trading on Wednesday, tracking US markets lower, as focus turned to the impending US 'fiscal cliff'.

"European equities are trading lower this morning being pressured by a late sell-off in the US yesterday evening on fears that so far there has been too little progress between Democrats and Republican in order to be able to avoid the fiscal cliff," said Markus Huber, the head of German HNW trading at ETX Capital.

The main US equity benchmarks ended yesterday lower after remarks from the US Senate majority leader, Nevada Democrat Harry Reid, to the effect that “little progress” has been made so far on avoiding the fiscal cliff by year-end. Reid added that an increase in the US debt ceiling is necessary.

In his own words, the Republicans "talked some happy talk about doing revenues, but we only have a couple weeks to get something done. So we have to get away from the happy talk and start talking about specific things”.

Stock markets across Europe yesterday were given an initial boost by Monday's news that Eurozone finance ministers had agreed to release the next tranche of the bailout to Greece. However, bourses pared gains as markets digested the deal with analysts saying that the agreement just kicks the can down the road for the heavily indebted nation.

FTSE 100: United Utilities impresses with first-half results

Water and sewage services group United Utilities gained after reporting that revenue in the first half rose from £793m to £823m as regulated prices increases offset reduced commercial volumes and lower property sales associated with the water business.

Chip designer ARM Holdings moved higher after the Daily Mail reported about a possible 1,200p bid from US tech giant Intel.

Medical technology group Smith & Nephew fell early on after announcing that it is to buy the assets of US-based Healthpoint Biotherapeutics for $782m in an attempt to bolster its position in advanced wound care.

Security firm G4S was in demand after Jefferies upgraded its rating on the shares from 'hold' to 'buy', saying that the stock's valuation is now sitting close to the bottom of its 10-year average.

Contract caterer Compass was also given a lift by Jefferies, which raised its recommendation from 'underperform' to 'hold', saying that the company's announced buy-back, dividend increase and reiterated guidance "exudes confidence".

In contrast, insurance firm Resolution fell after UBS cut its rating from 'buy' to 'neutral', citing disappointing nine-month trading, EV write-downs, UK restricting charges and the recent share price performance. Telecoms group Vodafone was suffering from a downgrade by Berenberg to 'hold'.

AMEC, Johnson Matthey, National Grid and Tate & Lyle were also registering losses this morning after going ex-dividend.

FTSE 250: Tavlivaara and Kenmare disappoint with production targets

Nickel miner Talvivaara disappointed after re-assessing its production targets following the gypsum pond leakage which stopped operations earlier this month. The company now expects full-year output to reach 13,000t of nickel, well below the previous 17,000t estimate.

Kenmare Resources, the titanium feedstock miner, was also down after warning that as a result of production issues, it expects its full-year production to be lower than previous guidance of 630,000 tonnes of ilmenite and 50,000 tonnes of zircon.

Insurance group Lancashire Holdings was a heavy faller after going ex-dividend.

Investment trust RIT Capital Partners was lower after saying net asset value fell in the half year to September 30th as some of its defensive hedges under performed in a rising market.

Support services and construction firm Interserve is to transfer its remaining interest in a portfolio of 19 PFI assets to the trustee of its pension scheme at a valuation of £55m to address the current pension scheme funding shortfall.


FTSE 100 - Risers
ARM Holdings (ARM) 778.00p +2.64%
United Utilities Group (UU.) 678.50p +1.42%
Capita (CPI) 760.50p +1.27%
Burberry Group (BRBY) 1,249.00p +0.73%
Compass Group (CPG) 727.00p +0.62%
Associated British Foods (ABF) 1,475.00p +0.61%
Aberdeen Asset Management (ADN) 330.00p +0.43%
Whitbread (WTB) 2,370.00p +0.38%
G4S (GFS) 246.10p +0.37%
Pearson (PSON) 1,172.00p +0.34%

FTSE 100 - Fallers
Bunzl (BNZL) 1,036.00p -3.54%
National Grid (NG.) 696.00p -2.32%
Resolution Ltd. (RSL) 232.00p -2.07%
Smith & Nephew (SN.) 647.50p -1.75%
Evraz (EVR) 235.80p -1.54%
Tate & Lyle (TATE) 767.00p -1.54%
International Consolidated Airlines Group SA (CDI) (IAG) 168.10p -1.23%
Amec (AMEC) 1,017.00p -1.07%
Lloyds Banking Group (LLOY) 45.94p -1.02%
Johnson Matthey (JMAT) 2,249.00p -0.88%

FTSE 250 - Risers
JD Sports Fashion (JD.) 718.50p +2.28%
Redrow (RDW) 161.10p +2.22%
Ultra Electronics Holdings (ULE) 1,564.00p +2.22%
Ruspetro (RPO) 86.50p +1.94%
New World Resources A Shares (NWR) 256.70p +1.74%
BBA Aviation (BBA) 206.40p +1.67%
Electra Private Equity (ELTA) 1,845.00p +1.54%
Debenhams (DEB) 115.20p +1.50%
Bovis Homes Group (BVS) 522.50p +1.26%
Interserve (IRV) 352.90p +1.09%

FTSE 250 - Fallers
Lancashire Holdings (LRE) 780.00p -8.61%
Talvivaara Mining Company (TALV) 91.55p -7.90%
Centamin (DI) (CEY) 56.80p -4.86%
Kenmare Resources (KMR) 32.17p -3.86%
Lonmin (LMI) 266.20p -3.20%
Intermediate Capital Group (ICP) 290.60p -2.35%
Bank of Georgia Holdings (BGEO) 1,070.00p -1.74%
RIT Capital Partners (RCP) 1,128.00p -1.74%
Yule Catto & Co (YULC) 169.60p -1.40%
Telecom Plus (TEP) 883.00p -1.34%

BC

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