London close: Markets cautious as US debt fears resurface

15th Jan 2013 16:54

- Anglo sinks into the red by the close- Burberry jumps after Q3 update- Debt ceiling concerns resurface, Obama takes hard-line approachThe FTSE 100 finished with only slight gains on Tuesday afternoon as markets continued to be range-bound with concerns over the US debt ceiling weighing on the mood."Today saw investors pause for breath and a degree of selling took place halfway through the session only for the losses to be reversed and the FTSE 100 has ended up back in positive territory," according to Angus Campbell, the head of market analysis at Capital Spreads."This degree of indecision has still yet to force the hands of those sellers in putting more downward pressure on stocks to create a more convincing retracement, whilst at the same time there is little impetus to send the markets higher for the next leg upwards."He said that investors "seem to be sitting on their hands waiting for the next big event", reflected in the FTSE 100 trading within a narrow range of around 40-50 points over the last few days.Debt ceiling fears resurfacePresident Barack Obama said last night that he would not negotiate with Republicans over raising the debt ceiling, declining to trade cuts in government spending in exchange for increasing the borrowing limit. "If the goal is to make sure that we are being responsible about our debt and our deficit - if that's the conversation we're having, I'm happy to have that conversation," Obama told a news conference. "What I will not do is to have that negotiation with a gun at the head of the American people." The ceiling will be reached within the next month or two, according to Treasury Secretary Tim Geithner. "While this is at least a month away, there's already a sense of anxiety in the markets due to the inability in the past of US lawmakers to come to an agreement until the 11th hour," said market analyst Craig Erlam from Alpari.Mixed newsflow elsewhere ensured that stocks lacked direction today, as traders reacted to disappointing growth figures in Germany, a solid bond auction in Spain and hints about further stimulus measures in Japan by the central bank governor.Meanwhile, the Centre for Economics and Business Research warned that Britain may be stripped of its AAA credit rating as national debt continues to soar through the roof.FTSE 100: Anglo drops late on as platinum shake-up prompts backlashAfter a positive start, shares in mining group Anglo American sunk into the red by the close as its plans to mothball mines and cut jobs in Rustenburg prompted a backlash from South African politicians and unions. South African Mineral Resources Minister Susan Shabangu has said that the government has been "blindsided" by the company's shake-up. She said that there hadn't been a proper consultation with the company on such important business decisions "which impact on the country's economy". Banking group RBS was also heavy faller on reports that it could face a fine of 800m dollars as soon as next week to settle allegations that traders attempted to rig LIBOR.Luxury brand Burberry made impressive gains after saying that total revenue rose 9% to £613m in the third quarter. Retail revenue, which makes up the bulk of sales, rose 13% to £464m on an underlying basis while wholesale underlying revenue fell by 5% to £120m. Bank of America Merrill Lynch upgraded its view on the firm to 'buy' this morning and raised its target price from 1,260p to 1,470p.Chip designer ARM Holdings is widely regarded as the 'best in class' in the UK tech sector, but analysts at both Morgan Stanley and Investec took the shares down a peg this morning, deciding to lower their ratings after a recent strong run. The stock, down around 4% today, has still gained around 50% in the last three months, up 70% during the past half-year. Diversified mining giant Rio Tinto rose after managing to surpass its own iron ore production targets in 2012, while its other commodity classes also delivered large increases year-on-year. FTSE 250: Imagination provides a liftChip company Imagination Technologies was higher after saying that it has signed a further license agreement with semiconductor firm MediaTek for wireless communications and digital multimedia solutions.Online grocery store Ocado rose after reporting on the six trading weeks to January 6th. Gross sales rose 14.2% as the firm said that the February launch of its CFC2 distribution centre is going to plan.Bike and car parts retailer Halfords was also making gains after a strong performance at its autocentres helped to lift total sales by 1.5% in the 15 weeks to January 11th. Spreadbetting firm IG Group was in the red after reporting "satisfactory" interim results with a 21% fall in profits.FTSE 100 - RisersBurberry Group (BRBY) 1,386.00p +4.60%Pearson (PSON) 1,221.00p +3.30%BG Group (BG.) 1,073.50p +2.43%Associated British Foods (ABF) 1,532.00p +2.13%Severn Trent (SVT) 1,583.00p +2.13%Reckitt Benckiser Group (RB.) 4,028.00p +1.97%United Utilities Group (UU.) 697.50p +1.82%WPP (WPP) 962.00p +1.80%Eurasian Natural Resources Corp. (ENRC) 339.60p +1.68%Aggreko (AGK) 1,775.00p +1.49%FTSE 100 - FallersAnglo American (AAL) 1,961.00p -3.71%ARM Holdings (ARM) 841.00p -3.67%Royal Bank of Scotland Group (RBS) 354.10p -2.85%Polymetal International (POLY) 1,104.00p -2.82%International Consolidated Airlines Group SA (CDI) (IAG) 206.20p -2.00%CRH (CRH) 1,215.00p -1.70%Smiths Group (SMIN) 1,199.00p -1.56%BAE Systems (BA.) 343.20p -1.55%Vedanta Resources (VED) 1,184.00p -1.42%BT Group (BT.A) 240.30p -1.23%FTSE 250 - RisersAlent (ALNT) 346.80p +5.41%Essar Energy (ESSR) 124.90p +5.05%Howden Joinery Group (HWDN) 178.10p +4.52%Imagination Technologies Group (IMG) 454.30p +4.36%Pace (PIC) 217.70p +4.26%Lonmin (LMI) 346.00p +4.03%Redrow (RDW) 181.20p +3.72%Regus (RGU) 109.70p +3.49%Wetherspoon (J.D.) (JDW) 532.00p +3.10%New World Resources A Shares (NWR) 301.00p +2.91%FTSE 250 - FallersElementis (ELM) 218.20p -3.45%Spirent Communications (SPT) 144.40p -3.22%Invensys (ISYS) 340.50p -3.16%Ashmore Group (ASHM) 369.80p -3.07%Chemring Group (CHG) 274.80p -2.90%Dixons Retail (DXNS) 27.19p -2.82%Victrex (VCT) 1,549.00p -2.64%Centamin (DI) (CEY) 57.20p -2.64%Rathbone Brothers (RAT) 1,285.00p -2.58%Perform Group (PER) 380.00p -2.56%BC