London close: Gains erased as poor data dents stocks

23rd Aug 2012 16:55

- FOMC minutes drive optimism for stimulus- Spain in bailout talks- PMIs disappoint in Eurozone and ChinaStimulus hopes for the US pushed the Footsie higher early on, but disappointing economic data across the globe meant that the bullish mood was short-lived, with gains erased by the close. Meanwhile, according to an exclusive in Reuters this afternoon, while the Spanish government has not officially requested a bailout, it is in talks with Eurozone officials over conditions for aid to reduce its bond yields. Citing three sources close to the matter, the news agency said that the favoured option being talked about its using the EFSF to buy Spanish debt at primary auctions, while the European Central Bank would purchase bonds on the secondary markets to cut borrowing costs.The minutes of the Federal Open Market Committee (FOMC) meeting said that "many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery".However, St Louis Fed President James Bullard poured cold water on stimulus hopes today after saying that the minutes are now outdated because they do not pick up the stronger economic data that has been released since then. Turning back to the Eurozone, Eurogroup President Jean-Claude Juncker made clear that "the ball is in Greece's court" following his meeting with the country's Prime Minister Antonis Samaras yesterday. While the Greek PM requested a two-year extension on the deadline to implement austerity measures, the head of the Eurozone's finance ministers said that the Troika's visit to Athens in September will give the Hellenic Republic "one last chance" to meet its commitments. The Markit preliminary composite purchasing managers' index (PMI) for the Eurozone rose from 46.5 to 46.6 in August but stayed well below 50, showing that activity in the single-currency region had contracted for a seventh straight month. Meanwhile, the HSBC China manufacturing PMI fell from 49.3 to 47.8 in August, a nine-month low. Data from the US was mixed today also. Initial weekly jobless claims rose by 4,000 last week to a seasonally adjusted 372,000, from an upwardly revised 368,000 the week before. Economists were expecting a reading closer of 369,000. Meanwhile, the Markit US flash manufacturing PMI rose from 51.4 to 51.9 in August, above the 51.5 forecast. Nevertheless, as analyst Cooper Howes from Barclays points out, the flash PMI "remains well below levels seen in Q1." FTSE 100: Randgold and Anglo lead miners higher after Fed minutesLast night's release of the minutes of the FOMC meeting drove mining stocks higher on hopes that the Fed will inject stimulus to give the world's largest economy a kick start, lifting the outlook for demand. Randgold was a high riser today after releasing a statement to welcome the appointment of a new interim government in Mali which "represents a further step towards the full normalisation of the country following the coup attempt earlier this year." Anglo American rose after signing a deal with Chilean miner Codelco to end their 10-month dispute over the Sur unit. Anglo will see a 29.5% in the division for around $2.8bn.Sector peers Fresnillo, Antofagasta, Glencore and Polymetal were also putting in a decent performance.One stock limiting gains in the mining sector today was Kazakhmys, the Kazakhstan-focused copper miner. Shares dropped after the company more than halved its dividend as surging costs and falling commodity prices dented its bottom line in the first half.FTSE 250: WH Smith rises after results upgrade, share buy-back; Petropavlovsk sinksNewsagent chain WH Smith jumped after saying it expects results for the year to the end of August will be at the top end of market expectations as the group's Travel business improves margins. The group also revealed a £50m share purchase programme for 2013.? Heading the other way was gold producer Petropavlovsk whose bottom line lost its lustre in the first half of the year as interest payments bit and the group took a bath on its gold option contracts. FTSE 100 - RisersRandgold Resources Ltd. (RRS) 6,400.00p +4.15%Fresnillo (FRES) 1,586.00p +3.93%Antofagasta (ANTO) 1,152.00p +2.86%Glencore International (GLEN) 366.00p +2.64%Polymetal International (POLY) 976.50p +1.88%Anglo American (AAL) 1,941.50p +1.65%British American Tobacco (BATS) 3,312.00p +1.46%Wolseley (WOS) 2,541.00p +1.40%Smith & Nephew (SN.) 658.00p +1.31%Tullow Oil (TLW) 1,396.00p +1.23%FTSE 100 - FallersKazakhmys (KAZ) 680.50p -3.41%Royal Bank of Scotland Group (RBS) 227.90p -3.27%International Consolidated Airlines Group SA (CDI) (IAG) 142.90p -2.72%IMI (IMI) 861.00p -2.55%Land Securities Group (LAND) 788.00p -2.11%Barclays (BARC) 191.00p -1.62%Lloyds Banking Group (LLOY) 34.05p -1.58%Serco Group (SRP) 563.00p -1.57%Capita (CPI) 720.50p -1.37%Eurasian Natural Resources Corp. (ENRC) 351.50p -1.26%FTSE 250 - RisersSIG (SHI) 102.60p +8.97%Aquarius Platinum Ltd. (AQP) 41.10p +5.38%Rank Group (RNK) 137.00p +5.38%Shanks Group (SKS) 92.50p +5.11%Lonmin (LMI) 640.00p +4.40%Soco International (SIA) 347.30p +3.36%Kentz Corporation Ltd. (KENZ) 371.00p +3.06%Man Group (EMG) 79.05p +2.93%WH Smith (SMWH) 597.50p +2.66%Oxford Instruments (OXIG) 1,326.00p +2.55%FTSE 250 - FallersPetropavlovsk (POG) 394.00p -15.97%Ruspetro (RPO) 145.00p -3.33%COLT Group SA (COLT) 117.30p -3.06%Home Retail Group (HOME) 92.20p -3.05%Homeserve (HSV) 211.50p -2.98%Ocado Group (OCDO) 65.10p -2.91%Chemring Group (CHG) 367.00p -2.81%Kenmare Resources (KMR) 38.34p -2.69%Regus (RGU) 98.80p -2.66%Brown (N.) Group (BWNG) 267.60p -2.66%BC