London close: German bond auction response unnerves investors

23rd Nov 2011 17:05

After an uneventful morning session that came as a relief after the turbulent events of recent days, shares turtned sharply lower in the afternoon session, as US markets took a bath.The results of this morning's German bond auction set nerves a-jangling. Germany issued €3.644bn in 10-year bonds Wednesday morning, well below the target issuance of €6bn. The average yield was 1.98%, compared to 2.09% in the prior auction. The bid to cover ratio was 1.1.MINERS TAKE THE LOW ROADDisappointing data from China, which showed factory activity levels dropping to their lowest in 32 months, prompted selling pressure on mining stocks. The HSBC flash manufacturing purchasing managers' index (PMI), measuring industrial activity in China, fell to 48 this month, from 51 in October. A measure below 50 indicates contraction, but market consensus was expecting a figure close to 50.1.According to Hongbin Qu, chief China and Asia economist at HSBC, "The dipping headline manufacturing PMI implies that industrial production growth is likely to slow further, to 11-12% year on year in the coming months, as domestic demand cools and external demand is set to weaken despite the still resilient new export orders."Rio Tinto was one of the bigger fallers in the sector, despite receiving the all-clear from the Canadian Competition Bureau for its offer to purchase uranium developer Hathor Exploration for £402m.Anglo American also declined more than the mining sector overall, even after revealing it has completed the first copper production from the huge expansion project at its Los Bronces mine in central Chile.COMPASS POINTING SOUTHContract caterer Compass saw its underlying profits before tax burst through the billion pounds barrier for the full year ended 30 September. The firm achieved a 10.6% increase in underlying profit from £922m to £1.02bn (reported profit before tax: £958m from £913m). Revenue rose 9.4% from £14.47bn to £15.83bn. Broker Seymour Pierce said the numbers were in line with expectations but the shares headed south nevertheless.Chemicals firm Johnson Matthey surrendered earlier gains that were won after estimate-beating first-half earnings prompted it to hike it dividend.Water group United Utilities was lower after first-half underlying profits fell from £195m to £185m.Scottish engineer Weir was off the pace after announcing it is to open the wallet and pay $675m for the US well-head specialist Seaboard.THOMAS COOK OUT OF THE FRYING PANThomas Cook bounced back from its precipitous decline yesterday as bargain hunters move in. The shares crashed on Tuesday after the package tour firm said it is in talks with its banks about borrowing more money. Sector peer TUI Travel, which took collateral damage from Thomas Cook's announcement yesterday, was also on the mend.Shares of defence markets researcher and technology firm QinetiQ raced ahead after it reported a return to net profit for the half year and said expectations for the current year have increased by around 20%. The group posted a net profit of £66.6m for the six months to 30 September compared to a net loss of £42.1m the same time a year earlier. Revenue fell to £739.6m from £864.9m.High street sports retailer JD Sports Fashion has seen the rate of growth of like-for-like (LFL) sales slow down in the sixteen weeks ended 19 November due to the ongoing troubles facing the everyday consumer. Since the end of the first half, LFL sales grew by just 0.2% from the same period last year, well under the 3.3% LFL sales growth reported in the first seven weeks of the period. Elsewhere in the retail sector, PC World-owner Dixons was nervously lower ahead of interim results tomorrow. Pub group Mitchells & Butlers said its largest shareholder, Piedmont, has not ruled out launching a fresh takeover offer for the company despite ongoing concerns about its business, according to the Financial Times.Oil and gas firm Premier Oil has abandoned a well off the coast of Norway and would now move its focus onto UK waters.FTSE 100 - RisersGlencore International (GLEN) 380.00p +2.43%Admiral Group (ADM) 865.00p +2.06%Inmarsat (ISAT) 397.10p +1.46%International Consolidated Airlines Group SA (IAG) 133.80p +1.36%Shire Plc (SHP) 2,010.00p +0.75%GlaxoSmithKline (GSK) 1,352.50p +0.67%Smiths Group (SMIN) 875.00p +0.63%Reckitt Benckiser Group (RB.) 3,181.00p +0.32%Imperial Tobacco Group (IMT) 2,250.00p +0.22%SABMiller (SAB) 2,100.50p +0.19%FTSE 100 - FallersMan Group (EMG) 123.60p -10.04%Royal Bank of Scotland Group (RBS) 17.34p -5.86%Hargreaves Lansdown (HL.) 423.90p -5.70%Essar Energy (ESSR) 211.40p -4.77%Burberry Group (BRBY) 1,133.00p -4.47%Schroders (SDR) 1,196.00p -4.32%InterContinental Hotels Group (IHG) 1,000.00p -4.21%Investec (INVP) 318.40p -4.10%Resolution Ltd. (RSL) 229.50p -3.57%Ashmore Group (ASHM) 309.60p -3.55%FTSE 250 - RisersTUI Travel (TT.) 154.00p +12.66%Thomas Cook Group (TCG) 11.12p +9.02%Chemring Group (CHG) 392.90p +6.53%QinetiQ Group (QQ.) 123.60p +6.46%Centamin Egypt Ltd. (CEY) 85.55p +5.94%Kesa Electricals (KESA) 80.20p +2.36%AG Barr (BAG) 1,156.00p +2.30%Anglo Pacific Group (APF) 280.00p +2.19%Galliford Try (GFRD) 473.30p +2.16%Telecom Plus (TEP) 747.50p +2.12%FTSE 250 - FallersDixons Retail (DXNS) 9.36p -11.28%Lancashire Holdings (LRE) 682.00p -8.58%Hochschild Mining (HOC) 394.90p -7.80%Supergroup (SGP) 435.20p -7.64%Misys (MSY) 252.60p -7.61%Premier Foods (PFD) 4.45p -7.29%JD Sports Fashion (JD.) 760.00p -6.75%African Barrick Gold (ABG) 470.80p -6.22%Ashtead Group (AHT) 150.50p -5.52%Mothercare (MTC) 130.10p -5.11%--jh