London close: Bernanke comments fuel late sell-off

29th Feb 2012 16:27

- Stocks tumble on Bernanke comments.- Higher-than-expected LTRO take-up. - ITV surges on 'exceptional turnaround'. After trading within a narrow 20-point range for the majority of the day, the FTSE 100 plummeted late on as US Federal Reserve Chairman Ben Bernanke gave some gloomy comments the economic outlook for the world's largest economy. In his semi-annual report before Congress, it seems that Bernanke told lawmakers not to over-interpret recent positive signals for the economy. He said that the labour market still remains "far from normal" and continued improvement will likely require stronger growth. He also warned that the fundamentals that support spending continue to be weak, with consumer sentiment remaining relatively low. Meanwhile, US gross domestic product growth in the final quarter of 2011 has been revised up to 3%, better than the initial estimate of a 2.8% expansion. This morning, the European Central Bank (ECB) announced the receipt of €529.5bn in bids for liquidity at its second long-term refinancing operation (LTRO), compared to the €489bn allotted back in December and the consensus's €470bn estimate. Analysts' predictions ranged from just €200bn to an eye-watering €1tn. Also of note, 800 banks made bids this time around, compared to just 523 in the first LTRO. "The total number of bidders suggests that a lot of small banks participated, which may be seen as encouraging by the ECB, especially in terms of financing of the real economy," according to analysts at Barclays Capital. In other news, Finland approved the €130bn Greek bailout, following the approval by lawmakers in the Netherlands and Germany earlier this week. Finnish parliament voted 111-72 in favour of the package.ITV JUMPS AFTER 'EXCEPTIONAL TURNAROUND'Terrestrial broadcaster ITV finished the day nearly 7% higher after it shrugged off concerns about a subdued advertising market to achieve top-line growth and forecast-beating profits. Prime Markets said that the results represented an "exceptional turnaround" admits a tough trading environment and while the business performance headlong numbers impress, "it is the restructuring behind the scenes...that really sets these results apart." British Airways and Iberia owner International Consolidated Airlines Group (IAG) reported a five-fold increase in pre-tax profit in the year ended December 31st, from €84m to €503m, despite a 29.7% increase in fuel costs. The stock finished under 1% higher, as earlier gains were pared.Asia-focused banking colossus Standard Chartered notched up its ninth successive year of record income and profit in 2011 and reckons it is in good shape to face whatever 2012 throws at it. Shares performed well early on but slipped into the red late on.Leading the downside on the FTSE 100 was Essar Energy, two days after reporting a sharp drop in full-year pre-tax profits. Shares finished over 7% down. BHP Billiton and Diageo were also among the fallers after trading without the right to its latest dividend. Meanwhile, FTSE 250 peers Kier, Hays and easyJet were also falling after going ex-dividend.Engineering giant Weir hit its 2014 profit targets early, after seeing adjusted pre-tax profits rise by a third in 2011, helped by record performances in its Minerals and Oil and Gas divisions. However, shares dropped 4.5% despite the strong performance, owing to the group's ongoing battles in its bidding war with Danish rival FLSmidth for the takeover of Australian mining equipment supplier Ludowici. FTSE 250: IPF UP ON RISING CUSTOMER NUMBERSDoor step lender International Personal Finance (IPF) soared into the top spot after finding no shortage of customers as consumers worldwide continue to experience hard times, with customer numbers in 2011 rising to 2.41m from 2.21m in 2010, an 8% year-on-year increase. National Express reported record annual profit and hiked its dividend after a stellar performance from its UK coach and US school bus operations. Pre-tax profit rose to £180.2m in the year ended 31 December 2011 from £97.3m the year before after growth in every division. Support services and construction group Interserve was also on the rise, having managed to increase profit despite tough conditions in construction markets in 2011. Adjusted profit before tax was ahead of consensus, climbing 4.6% to £72.8m from £69.6m the year before. Meanwhile, Henderson Group, the fund manager with listings in Australia and the UK, was down after admitting that outflows during 2011 were 'significant'. Underlying profits before tax were £159.2m, although when various items are taken into account, basic profit before tax fell to £13m. UK ECONOMIC NEWSTotal lending to individuals rose by £1.8bn in January, according to the latest data released today by the Bank of England, to £1.456tn. That compares with a six month average increase of £1.1bn.GfK's monthly index of consumer confidence remained at the -29 point level during the month of February, a seven month high. Consensus estimates has been for a small increase to -27.BCFTSE 100 - RisersITV (ITV) 85.95p +6.77%Capita (CPI) 767.00p +2.13%Intertek Group (ITRK) 2,315.00p +1.94%Bunzl (BNZL) 962.00p +1.85%Severn Trent (SVT) 1,575.00p +1.81%Evraz (EVR) 423.70p +1.58%Polymetal International (POLY) 1,084.00p +1.40%Serco Group (SRP) 555.00p +1.28%Resolution Ltd. (RSL) 269.00p +1.13%Centrica (CNA) 304.00p +1.06%FTSE 100 - FallersEssar Energy (ESSR) 104.90p -7.50%Weir Group (WEIR) 2,106.00p -4.49%Vedanta Resources (VED) 1,440.00p -4.13%Rio Tinto (RIO) 3,584.00p -3.93%Kazakhmys (KAZ) 1,109.00p -3.90%BHP Billiton (BLT) 2,037.50p -3.87%Eurasian Natural Resources Corp. (ENRC) 700.50p -2.84%Randgold Resources Ltd. (RRS) 7,200.00p -2.83%Hargreaves Lansdown (HL.) 428.30p -2.55%Cairn Energy (CNE) 344.20p -2.49%FTSE 250 - RisersInternational Personal Finance (IPF) 247.70p +10.48%Rightmove (RMV) 1,446.00p +6.32%National Express Group (NEX) 233.50p +5.56%Bodycote (BOY) 420.00p +5.00%Elementis (ELM) 166.00p +4.86%Interserve (IRV) 305.10p +4.49%Genus (GNS) 1,368.00p +2.55%Computacenter (CCC) 400.20p +2.54%Cable & Wireless Worldwide (CW.) 27.88p +2.31%Oxford Instruments (OXIG) 1,165.00p +2.10%FTSE 250 - FallersHenderson Group (HGG) 119.20p -7.09%Beazley (BEZ) 143.20p -5.67%Taylor Wimpey (TW.) 49.69p -5.62%Carillion (CLLN) 325.00p -5.50%Aberdeen Asset Management (ADN) 240.70p -5.01%Kier Group (KIE) 1,235.00p -5.00%Perform Group (PER) 265.20p -4.81%Allied Gold Mining (ALD) 111.00p -4.64%IG Group Holdings (IGG) 442.40p -4.47%Restaurant Group (RTN) 277.60p -4.44%