LONDON (ShareCast) - -Miners jump as investors seek riskier assets.
-Officials optimistic about securing Greek bailout.
-PBoC cuts RRR for banks.
-ECB bought no debt last week through SMP program.

Stocks rose on Monday and established a new high for the year after what appears to have been some genuinely positive news, as regards European and world authorities´ attempts to put an end to the Greek crisis. Thus, Eurozone finance ministers are busy analyzing the different options available that in the long-run might allow Greece to lower its debt, as a percentage of gross domestic product (GDP), to 120%, versus the 126% or 129% which some had been estimating.

That level of 120% of GDP is seen by the country´s creditors as the target which must be attained in order to secure the sustainability of the country´s debt load.

As well, late on Friday night the People's Bank of China (PBoC) announced on its website its decision to cut its legal reserve ratio requirement (RRR) for large banks by half a percentage point. The new rate is 20.5%. That is the second such easing since the beginning of the financial crisis, with more being expected.

Back on the subject of Greece, the most recent reports point to an apparent agreement between the different parties concerning the degree of private sector participation to be expected and the use of an escrow account. The latter measure is meant to guarantee that servicing the country´s debt will be given priority.

However, there are at least two very poignant questions which seem to continue to vex policy-markers. The first regards how to monitor and enforce the implementation of the reforms and the second is related to ensuring compliance after the next elections.

Those are by no means easy questions to solve and for some again show the need to continue down the road towards European federalism, with all of the complex issues which that entails.

Lastly, it must be noted that not all observers are convinced. One of these, in particular, is very well-known, and respected. He is Hans Werner Sinn, the head of Germany´s IFO Institute. In his opinion it is in Greece´s own best interest to leave the single-currency area. He believes that it would be a very difficult process but better in the end.

RESOURCE STOCKS ON THE UP

Mining stocks and banks performed well today as Greek optimism and Chinese policy easing spurred buying. Mining peers Vedanta, Eurasian Natural Resources Corp and BHP Billiton led gainers on the Footsie, rising by 3% on average.

The best performer however was Weir group.

Banking peers Royal Bank of Scotland and Lloyds were also on the rise, as the improved sentiment about the situation in Greece compensated for some negative news-flow.

Five directors of Lloyds, including the previous Chief Executive, will be forced to pay back some of their 2010 bonus, reports the Telegraph. Lloyds has had to set aside £3.2bn to cover claims arising from the mis-selling of payment protection insurance (PPI), it’s those losses which have prompted the so called “claw back” exercise. Ironically, analysts at Nomura today reiterated their reduce stance on shares of both banks.

Defensives were firmly out of favour as investors shifted positions into relatively riskier assets. Utilities peers Severn Trent, United Utilities and National Grid were down, joined by pharma giants Shire and GlaxoSmithKline.

Note must be taken however of the sharp run-up seen in the price of Shire´s stock last week.

Costa Coffee and hotel owner Whitbread was weighed down by comments from Credit Suisse today. While the Swiss broker gives the stock a neutral rating, it gave a short-term “trading-sell” recommendation this morning: "We expect subdued UK RevPAR [revenue per available room] trends will cause Whitbread’s pre close to disappoint and with the stock trading just 7% below through cycle multiples we recommend reducing holdings ahead of the 28 February update."

FTSE 250: CSR SURGES AS REVENUES RISE

Wireless technology and computer chip company CSR soared after reporting an increase in fourth quarter revenue, towards the top end of management expectations, following good momentum across its markets. The Cambridge-based firm said revenue rose to $244m for the final quarter to 30 December 2011 from $184.8m the previous year. However, operating profit for the period fell to $0.6m from $8.1m before, although that includes $41.1m of acquisition related charges.

Another big mover was software developer Misys after the Financial Times reported that it has received a bid from Vista Equity Partners, just a fortnight after Misys agreed a merger deal with Swiss firm Temenos.

SEGRO, the European industrial property firm, rose after offloading a portfolio of five "non-core" UK industrial estates to Ignis Asset Management for £80.2m. The disposal of the five estates is in line with the group's strategy announced in November 2011 to focus its UK multi-let industrial portfolio on London and the South East. UK Commercial Property Trust (UKCPT), which has spent £60.51m on three of the estates, is also higher.

Elsewhere, identity theft and credit card insurer CPP was suspended from trading as the Financial Services Authority (FSA) undertakes a review of certain past business sales and makes various changes to its renewals process. CPP is not happy about the FSA's request. Though it has acknowledged that a review in to past business practices is appropriate, the board of CPP thinks the FSA's intervention is disproportionate and threatens the viability of the business.

High street sports retailer JJB Sports was a big mover after saying that second half like-for-like sales were 7.6% down, an improvement from the 17.9% fall seen in the first six months of the year, helped by a strong Christmas. Shares rose 15%.

FTSE 100 - Risers
Weir Group (WEIR) 2,186.00p +6.58%
Vedanta Resources (VED) 1,358.00p +3.51%
Aviva (AV.) 382.60p +3.41%
Royal Bank of Scotland Group (RBS) 28.48p +3.19%
BHP Billiton (BLT) 2,077.50p +2.69%
Eurasian Natural Resources Corp. (ENRC) 722.00p +2.63%
Lloyds Banking Group (LLOY) 36.34p +2.51%
Hargreaves Lansdown (HL.) 483.70p +2.50%
Wolseley (WOS) 2,465.00p +2.41%
IMI (IMI) 982.50p +2.34%

FTSE 100 - Fallers
Shire Plc (SHP) 2,252.00p -1.14%
Tate & Lyle (TATE) 701.00p -0.92%
Imperial Tobacco Group (IMT) 2,500.00p -0.75%
Severn Trent (SVT) 1,540.00p -0.71%
United Utilities Group (UU.) 604.50p -0.66%
Rolls-Royce Holdings (RR.) 793.00p -0.63%
Associated British Foods (ABF) 1,219.00p -0.57%
Compass Group (CPG) 637.50p -0.55%
GlaxoSmithKline (GSK) 1,407.00p -0.50%
Reed Elsevier (REL) 557.50p -0.45%

FTSE 250 - Risers
CSR (CSR) 275.00p +20.77%
Ocado Group (OCDO) 103.70p +7.96%
Misys (MSY) 330.10p +6.62%
Fidessa Group (FDSA) 1,766.00p +5.56%
Aquarius Platinum Ltd. (AQP) 145.70p +5.35%
Rentokil Initial (RTO) 80.50p +4.61%
Howden Joinery Group (HWDN) 116.30p +4.49%
Jupiter Fund Management (JUP) 256.70p +4.22%
Barratt Developments (BDEV) 130.00p +4.08%
Domino Printing Sciences (DNO) 642.00p +3.97%

FTSE 250 - Fallers
Homeserve (HSV) 234.40p -5.98%
JD Sports Fashion (JD.) 820.00p -4.98%
Kenmare Resources (KMR) 56.40p -4.41%
Spectris (SXS) 1,661.00p -2.58%
PZ Cussons (PZC) 314.60p -2.15%
Restaurant Group (RTN) 304.20p -1.78%
Electra Private Equity (ELTA) 1,624.00p -1.75%
Genus (GNS) 1,109.00p -1.68%
JD Wetherspoon (JDW) 404.90p -1.58%
Spirit Pub Company (SPRT) 55.75p -1.33%

FTSE TechMARK - Risers
E2V Technologies (E2V) 138.00p +10.84%
Triad Group (TRD) 8.00p +6.67%
XP Power Ltd. (DI) (XPP) 1,079.00p +4.96%
Corin Group (CRG) 54.00p +4.85%
Anite (AIE) 107.25p +4.13%
Skyepharma (SKP) 32.25p +4.03%
Oxford Biomedica (OXB) 3.00p +3.45%
Sepura (SEPU) 55.50p +2.78%
Vernalis (VER) 24.88p +2.58%
NCC Group (NCC) 905.50p +2.14%

FTSE TechMARK - Fallers
Asterand (ATD) 6.38p -5.56%
Ark Therapeutics Group (AKT) 3.38p -4.93%
Emblaze Ltd. (BLZ) 42.00p -3.45%
AEA Technology Group (AAT) 0.32p -3.08%
DRS Data & Research Services (DRS) 17.25p -2.82%
Kewill (KWL) 73.75p -1.67%
Vislink (VLK) 26.50p -1.40%
Phoenix IT Group (PNX) 207.88p -1.01%
Phytopharm (PYM) 9.07p -0.55%
Timeweave (TMW) 24.88p -0.50%

AB

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