Date: Tuesday 07 Jan 2014
LONDON (ShareCast) - - Eurozone inflation eases to 0.8 per cent
- ECB in focus ahead of meeting on Thursday
- Banks lift Footsie into positive territory
techMARK 2,796.28 +0.14%
FTSE 100 6,761.20 +0.45%
FTSE 250 16,076.04 +0.17%
After a slow start, markets pushed into positive territory by Tuesday lunchtime as an unexpected dip in Eurozone inflation ramped up speculation ahead of the policy meeting later in the week.
The FTSE 100 was up around 30 points at 6,761 by midday with banking stocks leading the upside.
The annual rate of the consumer price index (CPI) in the single-currency region eased to 0.8% in December from 0.9% the month before, surprising analysts who had expected it to remain unchanged.
This fall, to further below the European Central Bank's (ECB) target of 2%, "will add to concerns that the region could suffer from a bout of deflation and increase the pressure on the ECB to take more action to support the economy", said Ben May, European Economist at Capital Economics.
The data comes before the ECB's next policy meeting due to take place on Thursday, although it is still widely expected to keep policy unchanged following the surprise rate cut in November to 0.25%. "While the ECB may refrain from providing additional policy support on Thursday, we expect further action in the months ahead," May said.
In addition to the ECB, investors are likely to focus on the Bank of England which also convenes for its policy meeting on Thursday. Meanwhile, minutes from the latest Federal Reserve meeting will also be released this week and are hoped to shed more light on last month's decision to begin scaling back stimulus.
Banking stocks provide a lift
Decent gains from banking stocks helped the FTSE 100 push into positive territory this morning with Lloyds, HSBC, RBS and Barclays among the best performers.
Construction equipment rental firm Ashtead was on the up after broker Jefferies raised its target price, saying it sees upside risk to estimates given its growth potential in the US.
Media groups ITV and BSkyB were also advancing after comments from Jefferies as it upgraded the stocks to 'buy' and 'hold', respectively.
Supermarket chain Sainsbury continued to trade lower ahead of its Christmas sales update later this week. Bank of America Merrill Lynch cut its rating for the shares to 'underperform' this morning. Rival retailer Morrison was also in the red.
Severn Trent, meanwhile, was hit by a downgrade by JPMorgan Cazenove to 'underweight'.
UK homeware retailer Dunelm was a heavy faller early on despite returning to like-for-like (LFL) sales growth in the second quarter after a tough start to the year. Nevertheless, the improvement wasn't enough to stop LFL sales for the first half falling by 0.9%.
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 82.03p +2.40%
Antofagasta (ANTO) 803.50p +2.10%
Coca-Cola HBC AG (CDI) (CCH) 1,783.00p +1.65%
Old Mutual (OML) 192.90p +1.63%
Land Securities Group (LAND) 976.50p +1.56%
HSBC Holdings (HSBA) 670.20p +1.55%
Legal & General Group (LGEN) 229.20p +1.46%
Royal Bank of Scotland Group (RBS) 348.90p +1.34%
Aviva (AV.) 448.40p +1.22%
Standard Life (SL.) 364.50p +1.22%
FTSE 100 - Fallers
Severn Trent (SVT) 1,666.00p -2.23%
Burberry Group (BRBY) 1,476.00p -1.93%
Royal Mail (RMG) 561.00p -1.92%
Morrison (Wm) Supermarkets (MRW) 252.40p -1.52%
Centrica (CNA) 337.60p -1.43%
Experian (EXPN) 1,110.00p -0.89%
G4S (GFS) 252.60p -0.82%
Hargreaves Lansdown (HL.) 1,479.00p -0.80%
Babcock International Group (BAB) 1,370.00p -0.80%
Travis Perkins (TPK) 1,881.00p -0.79%
FTSE 250 - Risers
Enterprise Inns (ETI) 157.50p +4.58%
Pace (PIC) 334.10p +4.31%
Polymetal International (POLY) 582.00p +3.10%
Senior (SNR) 317.70p +2.62%
Genus (GNS) 1,359.00p +2.57%
Devro (DVO) 305.60p +2.55%
Diploma (DPLM) 740.00p +2.35%
Cobham (COB) 277.90p +2.28%
Atkins (WS) (ATK) 1,455.00p +2.11%
Synthomer (SYNT) 263.00p +1.94%
FTSE 250 - Fallers
Bwin.party Digital Entertainment (BPTY) 120.20p -3.84%
Dunelm Group (DNLM) 948.50p -3.12%
BBA Aviation (BBA) 313.90p -2.76%
Drax Group (DRX) 790.50p -2.04%
Telecity Group (TCY) 745.50p -1.78%
Ted Baker (TED) 2,160.00p -1.77%
International Personal Finance (IPF) 512.00p -1.54%
Homeserve (HSV) 259.00p -1.52%
JD Sports Fashion (JD.) 1,499.00p -1.38%
PayPoint (PAY) 1,011.00p -1.37%
BC
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