London close: Markets volatile after mixed news on Italian election

25th Feb 2013 17:11

The FTSE 100 saw a volatile end to the trading session on Monday as a number of conflicting news reports emerged from the Italian exit polls.Milan's FTSE MIB index gained as much as 4.0% earlier in the day after it was rumoured that centre-left Pier Luigi Bersani could win a majority in both the lower house and the senate. However, as market analyst Michael Hewson from CMC Markets explains, stocks erased gains as news emerged that competitor and former Prime Minister Silvio Berlusconi could regain power in the Senate. Hewson said: "After initially showing significant gains across all of Europe, the news that the comeback king Berlusconi could be proving to be more Teflon coated than normal sent markets sharply into reverse gear, with reports that he was way ahead in Senate polling in Lombardy." With the final election results not expected until late evening, Hewson said: "It's going to be a long night!"Markets shrug off UK downgradeStocks started today's session with impressive gains this morning in spite of Moody's stripping the UK of its prized 'AAA' credit rating on Friday. The economy, which hasn't suffered a downgrade in over 30 years, is now rated at 'AA1' by the agency.Market sentiment was boosted by hopes of central-bank stimulus in the US and Japan: Federal Reserve Chairman Ben Bernanke has showed his commitment to the bank's third round of quantitative easing in the last few days, brushing off fears that it would create economically-risky asset bubbles; while there was speculation that the Bank of Japan will soon appoint a new chief who favours stimulus.Markets were also shrugging off the HSBC 'flash' manufacturing purchasing managers' index in China which fell from a two-year high of 52.3 to 50.3 in February, missing the 52.2 consensus estimate. FTSE 100: Banks lead the advanceRoyal Bank of Scotland jumped on reports it was poised to announce a plan to float part of its US business. It comes as the state-backed lender looks for ways to raise capital and restructure ahead of planned reprivatisation.Barclays followed closely behind as minority shareholders of South Africa's Absa Group reportedly backed a plan to buy the bank's African operations for $2.1bn. The two banks would merge the bulk of their African businesses outside of South Africa, with Barclays relinquishing direct control of eight of its operations on the continent in exchange for 129.5m new shares in Absa. Mining stocks were also performing well today as risk appetite increased, with Antofagasta, Glencore, Polymetal, Anglo American and Xstrata registering decent gains by the close.Pearson plunged after the global education group announced gross restructuring costs of £200m over the next two years alongside its 2012 annual results which saw pre-tax profits fall 59% to £434m.Shares in Reckitt Benckiser were hammered by the news that it has lost exclusivity over its SUBOXONE tablets after the US FDA gave two drug manufacturers the green light to produce generic versions of the drug. SUBOXONE accounted for around 5.0% of group profits last year, according to analyst Martin Deboo from Investec.FTSE 250: Senior jumps after record resultsAeronautics and industrial component manufacturer Senior was a high riser after reporting a record set of results for 2012. Analyst Andy Douglas from Jefferies said today that the stock's valuation - trading at 12.5 times earnings - is "attractive" as shares trade at a discount to a number of aerospace and industrial peers.Insurance group Hiscox gained after revealing plans for a £200m return to shareholders. The news came as pre-tax profits climbed to £217.1m in 2012, compared with just £17.3m in the previous year. House building peers Bovis Homes and Persimmon were both lower despite reporting impressive profit increases for last year. Panmure Gordon retained its 'hold' rating on Bovis and Persimmon today, saying that while full-year profits from both companies were a touch ahead of expectations, their valuations are looking full.Pizza delivery group Domino's was also under the weather despite reporting better-than-expected profits in 2012, as it announced a slow start to 2013.FTSE 100 - RisersAntofagasta (ANTO) 1,117.00p +3.04%Royal Bank of Scotland Group (RBS) 354.80p +2.84%RSA Insurance Group (RSA) 120.70p +2.64%Glencore International (GLEN) 381.95p +2.23%Polymetal International (POLY) 1,004.00p +2.19%Anglo American (AAL) 1,981.50p +2.03%CRH (CRH) 1,421.00p +1.94%Xstrata (XTA) 1,139.00p +1.79%ARM Holdings (ARM) 939.00p +1.62%BP (BP.) 451.15p +1.60%FTSE 100 - FallersPearson (PSON) 1,171.00p -3.70%Reckitt Benckiser Group (RB.) 4,381.00p -2.99%Whitbread (WTB) 2,563.00p -2.62%Marks & Spencer Group (MKS) 367.90p -2.57%Intu Properties (INTU) 347.30p -2.25%British Land Co (BLND) 567.00p -2.07%Aggreko (AGK) 1,684.00p -2.04%BT Group (BT.A) 271.70p -1.95%International Consolidated Airlines Group SA (CDI) (IAG) 223.00p -1.68%Intertek Group (ITRK) 3,340.00p -1.65%FTSE 250 - RisersSenior (SNR) 237.00p +7.09%IP Group (IPO) 132.40p +4.25%Ted Baker (TED) 1,229.00p +4.24%Petropavlovsk (POG) 313.60p +4.19%Diploma (DPLM) 597.00p +3.47%Renishaw (RSW) 1,903.00p +3.37%Edinburgh Inv Trust (EDIN) 556.00p +3.35%Hiscox Ltd. (HSX) 514.50p +3.21%Dialight (DIA) 1,199.00p +2.92%Synergy Health (SYR) 1,037.00p +2.67%FTSE 250 - FallersElementis (ELM) 227.80p -3.56%AZ Electronic Materials SA (DI) (AZEM) 370.50p -2.86%Bumi (BUMI) 350.90p -2.55%Spectris (SXS) 2,398.00p -2.48%Savills (SVS) 512.00p -2.48%Bellway (BWY) 1,140.00p -2.48%Dairy Crest Group (DCG) 422.80p -2.47%Computacenter (CCC) 484.80p -2.45%Domino's Pizza Group (DOM) 525.50p -2.23%Premier Farnell (PFL) 219.00p -2.14%BC