London close: Stocks dented by concerns over Syria, Fed taper

3rd Sep 2013 16:22

Markets were choppy on Tuesday as reports of two ballistic missiles being fired in the Eastern Mediterranean and heightened fears about the scaling back of US stimulus dented investor sentiment.While the launch was later confirmed as a missile test by Israeli forces training with the US Navy, the move undeniably reignited tensions between Syria and the West and prompted investors to take profits after yesterday's strong rise.The FTSE 100 finished down 37.78 points at 6,468.41, a fall of 0.58% on the day, pulling back after hitting a near-three-week high on Monday.Senior Market Analyst Michael Hewson from CMC Markets said "it was a timely reminder of the fluidity and uncertainty of the situation in the region, and kept investors on the back foot somewhat throughout the remainder of the day, despite some positive US economic data".President Barack Obama has asked lawmakers to back military action to chastise Syrian President Bashar al-Assad for allegedly using chemical weapons against civilians which killed hundreds last month. Assad reiterated his denial of the claims on Monday, warning the US and its French allies of retribution.Congress is reportedly split on whether to intervene in Syria and Obama has so far had little success of convincing lawmakers ahead of votes next week. Should lawmakers deny Obama's request for force in Syria it would be the first time Congress had rejected a president's appeal for military action.However, Speaker of the House and Ohio Republican John Boehner showed his support for Obama's call for action, saying that the US should "warn others around the world that this type of behaviour is not going to be tolerated".US data in focusData from the US came in ahead of expectations this afternoon with the closely-watched ISM manufacturing index rising from 55.4 to 55.7 in August (forecast; 54). Amna Asaf from Capital Economics said: "clearly this is the sort of the news that could prompt the Fed to begin tapering its monthly asset purchases later this month."Economic indicators from the States will be in focus over the next two weeks ahead of the Federal Open Market Committee (FOMC) meeting on September 17-18th with policymakers widely expected to announce that they will begin scaling back stimulus.The all-important monthly employment report in Friday will be likely be the main event this week after Fed Chairman Ben Bernanke said back in May that he was eyeing an improvement in the labour market specifically before making an adjustment to the quantitative easing programme. The consensus forecast is for a 180,000 increase in non-farm payrolls in August, up from the 162,000 gain registered in July.FTSE 100: Vodafone pulls back after agreeing on VZW disposalVodafone was in focus today after late last night reaching an agreement to sell its 45% stake in US outfit Verizon Wireless to Verizon Communications in a transaction valued at $130bn (£84bn) in cash and shares. Shareholders are expected to receive 71% of the net proceeds of the disposal. The stock was a heavy faller today, pulling back after a strong rise over the last few days.Real estate groups were under pressure after Deutsche Bank downgraded stocks and target prices across the sector. Land Securities and British Land were among the worst performers after the bank cut its ratings for both to 'hold', citing a reduced supply of liquidity in the financial markets over the next 12 months due to the Fed's expected 'taper'.Security solutions firm G4S was also lower after Credit Suisse lowered its recommendation from 'outperform' to 'neutral', saying that the stock has re-rated and is now trading at a premium to its historic average.Leading the upside was Primark owner and food ingredients group AB Foods after Exane BNP Paribas raised the stock to 'outperform'.Mining group Rio Tinto was extending gains after yesterday reporting the first shipment of iron ore from its expanded operations in Western Australia. "We are attracted by Rio's value, quality volume growth and cost cutting potential," said analysts at UBS this morning.FTSE 250: Genus drops after full-year resultsGenus fell sharply this morning despite increasing its annual dividend by 10%and saying it expected revenue growth to improve as it reported a rise in underlying profits. The animal genetics company's adjusted pre-tax profit rose 2% to £47.2m in the year ended June 30th even as feed costs increased. Statutory profit before tax however fell 30% to £38.1m because of a fall in the value of biological assets under accounting rules.Spirent Communications rose after saying its Chief Executive Officer Bill Burns will step down from the company with immediate effect. Chief Financial Officer Eric Hutchinson will replace Burns in the interim while the technology firm searches for a successor.FTSE 100 - RisersTullow Oil (TLW) 1,043.00p +2.46%Hargreaves Lansdown (HL.) 1,031.00p +1.58%Associated British Foods (ABF) 1,901.00p +1.22%Randgold Resources Ltd. (RRS) 5,120.00p +1.09%Centrica (CNA) 393.10p +1.08%Imperial Tobacco Group (IMT) 2,154.00p +0.98%Melrose Industries (MRO) 300.80p +0.94%Antofagasta (ANTO) 893.50p +0.90%Capita (CPI) 969.00p +0.78%BHP Billiton (BLT) 1,936.00p +0.78%FTSE 100 - FallersVodafone Group (VOD) 202.50p -5.02%Land Securities Group (LAND) 881.00p -3.03%British Land Co (BLND) 552.50p -2.56%Pearson (PSON) 1,278.00p -1.62%Carnival (CCL) 2,385.00p -1.57%William Hill (WMH) 414.90p -1.50%G4S (GFS) 257.40p -1.34%Hammerson (HMSO) 486.00p -1.34%Wood Group (John) (WG.) 803.50p -1.29%Prudential (PRU) 1,102.00p -1.25%FTSE 250 - RisersDixons Retail (DXNS) 44.18p +6.46%Spirent Communications (SPT) 134.60p +4.67%KCOM Group (KCOM) 89.35p +3.53%Xaar (XAR) 808.00p +3.19%Balfour Beatty (BBY) 258.20p +3.16%Kenmare Resources (KMR) 27.20p +2.99%Bwin.party Digital Entertainment (BPTY) 111.00p +2.68%Cobham (COB) 291.30p +2.57%Mitchells & Butlers (MAB) 447.20p +2.40%COLT Group SA (COLT) 109.30p +2.25%FTSE 250 - FallersGenus (GNS) 1,348.00p -8.86%St. Modwen Properties (SMP) 287.90p -5.30%Daejan Holdings (DJAN) 3,775.00p -4.55%Workspace Group (WKP) 426.00p -4.42%Derwent London (DLN) 2,279.00p -4.28%Debenhams (DEB) 104.00p -4.15%SEGRO (SGRO) 287.60p -3.59%JPMorgan Indian Inv Trust (JII) 289.60p -3.47%Intu Properties (INTU) 301.60p -3.40%Unite Group (UTG) 353.20p -3.26%BC