LONDON (ShareCast) - - US ISM manufacturing index surprises sharply on the downside, weather cited
- Footsie finds supoort at 200-day moving average
- Lloyds dives on PPI bill update, dividend plans
- Chinese data just in line

Market Movers
techMARK 2,766.78 -0.29%
FTSE 100 6,460.48 -0.77%
FTSE 250 15,552.68 -0.78%

The FTSE 100 followed the other main global equity benchmarks into the red on Monday as some of the most widely followed gauges of risk aversion, such as the Japanese yen [versus the US dollar] and gold futures, betrayed just how skittish investors can be at times.

Curiously, the top flight index actually outperformed its European peers despite the fact that its components are heavily exposed to the outlook for emerging markets. Nonethless, that may in part be due to the fact that the Footsie began the day atop an important level of technical support – its 200-day moving average.

The most intense bout of selling, just before the close of trading, was set off by a surprisingly negative reading on US manufacturing, courtesy of the ISM institute. A good deal of the weakness in that report seemed attributable to unfavourable weather, but traders seemed in no mood to wait around for answers.

Acting as a backdrop, overnight the Japanese Nikkei-225 entered so-called 'correction' territory. That followed Friday´s weak close on international markets, which saw several of the biggest global benckmarks for stocks end January in the red, for the first time in many years. February does not seem to have gotten off to a much better start either.

That came as much market commentary was concentrating on the fact the retail investors are 'dumping' their shares as opposed to institutional investors who, presumably, are sitting tight.

The FTSE 100 finished 45 points lower (-0.69%) at 6,465.66.

In its latest edition The Economist sided with the optimists when it came to worries about China and the recent ructions in emerging markets. However, the magazine admitted that there was a certain danger - and tendency - for fears about emerging markets to be 'self-fulfilling'.

On the positive side of things, it pointed out how the majority of those countries now have floating exchange rates, high levels of international reserves and current account deficits which, for the most part, were below 5% of Gross Domestic Product. Those economies should therefore be better positioned to cope with a normalisation in interest rates Stateside.

Similarly, the latest edition of the FT Weekend pointed out in an editorial that the risk of 'contagion' from emerging markets to developed ones was limited. That was particularly unlikely to occur through international trade linkages, it said, as exports to emerging markets by the West still represented only a tiny portion of overseas sales.

The risk of financial contagion, however, was more severe. Even so, the exposure of banks in high-income countries to emerging markets – while relatively high – was not overly concentrated. Despite that, the risk of 'panics' could not be completely dismissed, the newspaper indicated.

Acting as a backdrop, a raft of data and central bank meetings were expected throghout the coming week, culminating in Friday´s jobs report Stateside.

Gold miners and 'defensive' issues lead gains

On the company front, Randgold Resources was a strong riser after it said it hit targets for 2013, boosted gold production to a new record level and expects output to rise over the next five years. Production for the quarter and year to December rose 20% and 15% respectively, ahead of some analysts´ forecasts. Cash costs, a widely tracked metric, fell by 5% versus the previous quarter. Further helping the share price was the advance in gold futures.

Shares in Lloyds were at the bottom of the pile after the group revealed its payment protection insurance (PPI) bill had soared by a further £1.8bn to nearly £10bn, and despite predicting its full-year underlying profits would be almost double that predicted by analysts. Some analysts were irked by the lender's announcement that it will seek approval to commence dividend payments at a 'modest' level.

Acting as a backdrop, banks were the worst performing sector out on the DJ Stoxx 600 today after the European Central Bank published further details on its upcoming stress tests.

Reckitt Benckiser Group rose strongly after Sanford C. Bernstein reiterated its 'outperform' rating on the shares.

Weir Group was another top performer as investors ignored the target price reduction (2,500p to 2,335p) from broker Jefferies and instead focused on its comments that the oil and gas group could experience a favourable shift in sentiment if "the on-going concerns towards the Minerals division [were] to dissipate".

Shares in Vodafone were amongst the day´s worst performers as well, with a fair bit of market commentary concentrating on the fact that Thursday´s trading update would show a company which is having to deal with a big fall in overseas revenues because of the problems afflicting emerging markets. Three of those makets happened to be where the telecoms operator has a heavy presence: India, South Africa, Turkey. Other stocks with exposure to emerging markets, such as Aberdeen Asset Management and Burberry also fared poorly.

BBA Aviation climbed after saying it sold APPH, a full-service landing gear and hydraulic sub-systems supplier, and announced it was considering a cash return to shareholders. The business, which had formed part of BBA's Aftermarket Services division, was sold for $128m, the $120.6m proceeds of which would be use to reduce the group's debt level.

FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 4,463.00p +6.44%
Reckitt Benckiser Group (RB.) 4,666.00p +2.26%
Severn Trent (SVT) 1,764.00p +2.14%
SSE (SSE) 1,333.00p +1.99%
Fresnillo (FRES) 782.00p +1.62%
Petrofac Ltd. (PFC) 1,173.00p +1.56%
William Hill (WMH) 337.50p +1.53%
Rexam (REX) 499.80p +1.38%
Weir Group (WEIR) 2,121.00p +1.29%
Travis Perkins (TPK) 1,761.00p +1.27%

FTSE 100 - Fallers
Lloyds Banking Group (LLOY) 79.92p -4.06%
Aberdeen Asset Management (ADN) 375.60p -3.89%
IMI (IMI) 1,455.00p -2.81%
Burberry Group (BRBY) 1,408.00p -2.76%
Anglo American (AAL) 1,397.50p -2.68%
Barclays (BARC) 265.40p -2.61%
Hargreaves Lansdown (HL.) 1,449.00p -2.49%
Glencore Xstrata (GLEN) 314.70p -2.42%
Melrose Industries (MRO) 302.60p -2.17%
Babcock International Group (BAB) 1,360.00p -2.16%

FTSE 250 - Risers
African Barrick Gold (ABG) 232.50p +5.78%
Centamin (DI) (CEY) 46.20p +4.76%
Hansteen Holdings (HSTN) 108.40p +2.26%
Derwent London (DLN) 2,545.00p +2.21%
CSR (CSR) 674.00p +1.89%
EnQuest (ENQ) 131.80p +1.78%
Paragon Group Of Companies (PAG) 357.20p +1.74%
Ferrexpo (FXPO) 154.30p +1.51%
Rightmove (RMV) 2,568.00p +1.42%
BBA Aviation (BBA) 312.20p +1.17%

FTSE 250 - Fallers
Kenmare Resources (KMR) 16.75p -4.29%
Tullett Prebon (TLPR) 318.80p -3.98%
Supergroup (SGP) 1,488.00p -3.56%
Jupiter Fund Management (JUP) 362.30p -3.08%
Balfour Beatty (BBY) 283.00p -3.02%
Rotork (ROR) 2,389.00p -2.97%
Perform Group (PER) 240.20p -2.95%
Inchcape (INCH) 568.00p -2.91%
Close Brothers Group (CBG) 1,288.00p -2.87%
Evraz (EVR) 83.00p -2.81%

AB

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