FTSE close: Glencore, ARM up; Lloyds down

 

17.10 (close)

City trader traders stock exchange market

The London market made scant progress today as an IMF endorsement of the UK government's deficit-busting plans was overshadowed by wider fears over the global recovery.

The FTSE 100 Index closed 8.2 points higher at 5863.2 after the IMF said setbacks to the UK's economic recovery were temporary and Chancellor George Osborne's moves to cut the deficit were 'essential'.

But with no economic reports to move the markets, traders continued to focus on dismal US jobs figures released last week.

In London, progress was limited as the eurozone once again came under scrutiny amid fresh concerns over the health of Spain's economy after a political party claimed one of its largest regions was bankrupt.

The safe haven of the US dollar rose against the pound to 1.63. Sterling was also down against the euro at 1.11.

Among stocks under pressure, Lloyds Banking Group fell 1.8p to 46.9p after its new chief executive said the problems at the part-nationalised bank were more deep-seated than he had imagined and that it will take three to five years to achieve his aims.

The wider banking sector was still dogged by concerns over the pace of the global economic recovery, as Barclays dropped 1.5p to 264p and HSBC eased 1.5p to 625.8p.

British Airways parent International Airline Group (IAG) came under pressure after an industry body warned airlines are expected to make just a fifth of the profits they made last year as higher oil prices increase the cost of flying and deter cash-strapped customers.

The International Air Transport Association forecasts that airlines will make profits of 4bn US dollars (£2.4bn) in 2011, a 78% drop from the 18bn US dollars (£11bn) in 2010.

IAG, formed following the merger of BA and Spanish carrier Iberia, was down 7.1p at 229.6p, while Thomson Holidays owner TUI Travel dropped 2.6p to 225p.

The biggest rise in the top-tier index came from commodities trader Glencore International, which lifted 10p to 515p.

The rising price of copper and other metals helped miners, as BHP Billiton added 20.5p to 2326p, Kazakhmys advanced 15p to 1278p and Rio Tinto was up 40.5p at 4148p.

Outside the top flight, owner of the SuperDry fashion label SuperGroup, dropped nearly 7% after the store slashed prices by 20% at the weekend.

The sale is SuperGroup's first in the UK and raised concerns that the company, which frequently posts forecasting-beating profits and sales, is saturating. Shares were 68p lower at 969p.

Elsewhere, FTSE 250 Index marketing firm Aegis jumped 6% after it confirmed talks to sell its market research business Synovate to Ipsos of France. The potential deal, thought to be worth around £500m, caused shares to rise 9.8p to 151p.

The biggest Footsie risers were Glencore up 10p at 515p, ARM ahead 10.5p at 581.5p, Fresnillo up 24p at 1428p and IMI ahead 17p at 1038p.

The biggest Footsie fallers were Lloyds Banking Group down 1.8p at 46.9p, International Airlines Group off 7.1p at 229.6p, Wolseley down 40p at 1914p and Resolution off 4p at 299.9p.

15.50: The Footsie is just about hanging on in positive territory towards the end of a unsettled session - it's up 7.6 points at 5,862.6.

The Dow is down 36.3 points at 12,115.

Gold was fixed this afternoon at $1,549 an ounce compared with $1,540 at the previous close. 15.00:

The Dow Jones is 15.4 points lower at 12,135.8 as anxiety about the state of the economic recovery both at home and abroad weighs on stocks.

Investors in London are taking a more positive stance, as the FTSE 100 shakes off earlier losses and moves up 21.2 points to 5,876.2.

Chancellor George Osborne has received welcome news from the IMF, which dismissed recent setbacks to economic growth as 'temporary' and told him to stick with his deficit reduction plan.

The global financial organisation downgraded its GDP growth forecast for 2011 from 2% to 1.5%, but maintained its 2.5% estimate for the medium term.

We have more on the IMF's verdict on the UK economy here.

On the corporate front, Rolls-Royce and Daimler have secured control of German engine maker Tognum after a sweetened £3bn offer won them a near-60% stake in the firm.

The pair upped their bid to €26 (£23.20) per share, which swung the support of Tognum's management.

Rolls shares are down 1p to 628p in trading today. Read more about the Tognum deal here.

14.25:

Futures trading points to a flat opening on the Dow Jones in the US shortly.

The FTSE 100 has moved into the black and is up 17 points at 5,872.1.

12.40:

At lunchtime, the FTSE 100 is stuck in negative territory, 4.67 points lower at 5850.34.

Gains by the weighty mining sector have been offset by a poor session for the banks.

Among stocks under pressure, Lloyds Banking Group fell 1.1p to 47.5p after its new chief executive said the problems at the part-nationalised bank were more deep-seated than he had imagined and that it will take three to five years to achieve his aims.

The wider banking sector was hit by concerns over the pace of the global economic recovery, as Barclays dropped 2.9p to 262.6p, Royal Bank of Scotland fell 0.1p to 41.4p and HSBC eased 3.6p to 623.7p.

British Airways parent International Airline Group (IAG) came under pressure after an industry body warned airlines are expected to make just a fifth of the profits they made last year as higher oil prices increase the cost of flying and deter cash-strapped customers.

The International Air Transport Association forecasts that airlines will make profits of £2.4bn in 2011, a 78% drop from the £11bn in 2010.

IAG, formed following the merger of BA and Spanish carrier Iberia, was down 4.3p at 232.4p, while Thomson Holidays owner TUI Travel dropped 1.5p to 226.1p and Thomas Cook shed 0.7p to 144p.

The biggest rise in the top-tier index came from commodities trader Glencore International, which lifted 8.95p to 513.95p.

The rising price of copper and other metals helped miners, as BHP Billiton added 11p to 2316.5p, Kazakhmys advanced 11p to 1274p and Rio Tinto was up 26.5p at 4134p.

Outside the top flight, owner of the SuperDry fashion label SuperGroup, dropped more than 4% after the store slashed prices by 20% this weekend.

The sale is SuperGroup's first in the UK and raised concerns that the company, which frequently posts forecasting-beating profits and sales, is saturating. Shares were 37.3p lower at 999.7p.

11.00:

Shares in Aegis have jumped 7% after the marketing group confirmed it was in talks to sell its market research business Synovate to French firm Ipsos.

The FTSE 250 stock was up 9.4p at 150.6p amid speculation that other companies might throw their hats into the ring to buy Synovate, or make a full-scale bid for Aegis itself.

We have more here.

The FTSE 100 is down 3.9 points at 5,851.1.

Joshua Raymond, market strategist at spreadbetter City Index, commented: 'US non-farm payrolls were shockingly bad and reinforced fears that the US economic recovery is slowing quickly.

'Naturally this is therefore convincing some traders to refrain from adding too much risk to their portfolios as we head into the summer months where low volumes could make trading more volatile.'

He added that Glencore was benefiting from a positive analyst note from Deutsche Bank, which initiated advice on the stock with a 'buy' recommendation and a price target of 650p.

Brent crude is trading at just over $114 a barrel this morning.

09.45:

Concerns over a faltering US recovery have knocked shares in London, but Glencore and other commodity stocks have posted gains after last week's swings.

The FTSE 100 made a shaky start to the week, down 10.3 points at 5,844.7.

Its wobble followed falls on Asian markets overnight, as confidence was undermined by disappointing US jobs figures on Friday.

Only around 54,000 jobs were added across the Atlantic in May, about a third of the number forecast.

However, the commodities sector made gains in London following a volatile period last week.

Glencore International is up 8.95p to 513.95p. BHP Billiton has added 16.5p to 2.322p, while Anglo American is down 9p at 2,949p.

But Xstrata is off 23.5p at 1,340p.

Other stocks under pressure include Lloyds Banking Group, which fell 0.4p to 48.3p after its new chief executive said the problems at the part-nationalised bank were more deep-seated than he had imagined.

António Horta-Osório said it would take three to five years to achieve his aims.

In a lacklustre session for banks, Barclays dropped 2.45p to 263.05p, Royal Bank of Scotland fell 0.3p to 41.3p and HSBC eased 4p to 623.3p.