London close: Stocks erase losses after late US-inspired rally

2nd Jul 2013 16:34

A strong start on Wall Street helped the FTSE 100 erase its earlier losses on Tuesday, though markets still ended flat ahead of some key 'risk events' expected later on in the week.After hitting an intraday low of 6,268 earlier on, London's benchmark index rallied strongly in afternoon trade to finish at 6,304, down just four points on the day. This rebound followed a better-than-expected jump in US factory orders for May, as well as a raft of strong car sales from American automakers, which prompted decent gains after the opening bell in New York. Markets were also still digesting the stronger-than-forecast US manufacturing figures out last night."Market participants are finally starting to put aside Fed tapering fears for now and are responding to economic data in a traditional manner; welcome response to strong data/disappointment to poor data," said Market Strategist Ishaq Siddiqi from ETX Capital."That said, investors are exhibiting some caution ahead of a big week of data," he said.Both the European Central Bank and Bank of England (BoE) are to reveal their latest policy decisions on Thursday afternoon with all eyes turning to Mark Carney as he heads up his first meeting as BoE Governor.Meanwhile, following an ADP jobs report on Wednesday, US non-farm payrolls are due out on Friday with markets waiting nervously given that a positive surprise could prompt the Federal Reserve to move more quickly to scale back its stimulus programme."It would appear that for now investors appear content to sit on the sidelines ahead of some key economic data, central bank meetings and the US Independence Day holiday due later this week," said Market Analyst Michael Hewson from CMC Markets."The continued uncertainty with respect to Fed tapering intentions is likely to continue to temper investor enthusiasm until we get this week's US payrolls report out of the way."FTSE 100: Serco jumps on massive US contractOutsourcing group Serco was in demand today after confirming that it may potentially have been awarded a contract by the US Department of Health and Human Services' Centers for Medicare and Medicaid Services. According to the US Federal Business Opportunities website the total amount of the contract - including all option periods and optional tasks - is of $1.25bn. Positive comments from The Telegraph's Questor column following Friday's trading update were also thought to be providing a lift to the stock.British luxury brand Burberry was also a high riser this morning after HSBC lifted its rating for the group from 'neutral' to 'overweight', highlighting that the shares no longer trade at a premium to other luxury peers.UK housebuilder Persimmon however fell despite saying that revenues rose in the first half as it completed 7.0% more homes than the previous year at a higher average selling price. Jefferies said this morning's statement was "robust" but the stock's valuation appears "full" compared to other peers in the sector.Royal Bank of Scotland also retreated following reports the government was set to name Rothschild to advise on a potential break-up of the lender into a 'good bank' and 'bad bank'.FTSE 250: St Modwen impresses with resultsRegeneration specialist St Modwen Properties surged after upping its interim dividend by 10% following an 11% increase in pre-tax profit in the first half. The company hailed an "excellent start" to the year and said it is looks forward to a "successful outcome" for 2013 as a whole.Consumer products group PZ Cussons also rose after announcing the acquisition of baby-foods group Rafferty's Garden for £42.2m.Satellite group Inmarsat was a heavy faller today after negative readacross from a failed rocket launch by one of its partners. ILS, the launch partner for Inmarsat's Global Xpress (GX) airline broadband project, was involved in an explosion of a Proton rocket, the third failure over the last year relating to these launch vehicles. Analysts at Jefferies said that this will likely delay the launch of GX into next year.FTSE 100 - RisersSerco Group (SRP) 665.50p +6.48%Burberry Group (BRBY) 1,405.00p +2.93%Pearson (PSON) 1,192.00p +2.58%Hammerson (HMSO) 506.00p +2.20%Shire Plc (SHP) 2,121.00p +1.58%British Sky Broadcasting Group (BSY) 813.00p +1.50%United Utilities Group (UU.) 695.00p +1.46%London Stock Exchange Group (LSE) 1,396.00p +1.45%SSE (SSE) 1,550.00p +1.44%Morrison (Wm) Supermarkets (MRW) 263.80p +1.38%FTSE 100 - FallersRoyal Bank of Scotland Group (RBS) 274.30p -2.70%Vedanta Resources (VED) 1,039.00p -2.62%Eurasian Natural Resources Corp. (ENRC) 206.90p -2.59%Rexam (REX) 483.40p -2.54%TUI Travel (TT.) 356.10p -2.41%Aberdeen Asset Management (ADN) 382.40p -2.35%Travis Perkins (TPK) 1,502.00p -1.89%Lloyds Banking Group (LLOY) 62.95p -1.69%G4S (GFS) 224.60p -1.62%Intertek Group (ITRK) 2,938.00p -1.61%FTSE 250 - RisersWorkspace Group (WKP) 411.20p +6.81%African Barrick Gold (ABG) 106.70p +6.70%Hochschild Mining (HOC) 165.00p +5.77%Grainger (GRI) 155.00p +5.44%PZ Cussons (PZC) 373.00p +5.07%Daejan Holdings (DJAN) 3,750.00p +4.90%United Drug (UDG) 324.00p +4.52%888 Holdings (888) 154.20p +4.33%RPS Group (RPS) 216.40p +4.29%St. Modwen Properties (SMP) 286.00p +4.00%FTSE 250 - FallersKazakhmys (KAZ) 266.10p -4.96%Spirent Communications (SPT) 134.40p -4.95%Euromoney Institutional Investor (ERM) 990.00p -4.81%Inmarsat (ISAT) 663.50p -4.53%Dialight (DIA) 1,102.00p -4.34%Anite (AIE) 133.00p -4.32%Synthomer (SYNT) 186.80p -4.21%Balfour Beatty (BBY) 221.30p -3.78%Imagination Technologies Group (IMG) 282.80p -3.74%Ashmore Group (ASHM) 330.90p -2.90%