London midday: Eyes on Merkozy meeting as Footsie falls

9th Jan 2012 11:43

London's blue chip index was trading slightly lower by midday, following a moderate rise early on, with all eyes on the meeting between Angela Merkel and Nicolas Sarkozy. The German Chancellor and French Prime Minister are to hold a press conference in the next hour in which they are expected to discuss ways to increase Europe's growth potential and finalise a deal on fiscal coordination.In other news, Prime Minister David Cameron has left open the door to Britain giving billions of pounds of new support to the International Monetary Fund - and indirectly to ailing members of the Eurozone - in a move likely to infuriate eurosceptic MPs in his own Conservative party, the Financial Times reported.Meanwhile, ratings agency Moody's has released its Weekly Credit Outlook, in which it issued a downbeat review on the situation in Europe. While the agency credited regulators with recognising that investment in sovereign debt entails risks, they feel that higher capital levels alone will be insufficient to calm concerns over a possible default. Moody's recognises that higher levels of capital for banks would most likely have to come out of the governments' pockets, which in turn would place even more pressure on sovereign balance sheets.PHARMAS FALL, ARM IN DEMANDIn company news, drugs giant GlaxoSmithKline was a heavy faller despite saying that that the the phase III registration programme for the once-a-day respiratory medicine, Relovair, in patients with chronic obstructive pulmonary disease (COPD) has been completed. Glaxo admitted that a 24-week "superiority study" of Relovair against Seretide in asthma patients "did not meet the predefined threshold for superiority". Glaxo described this study as "non-pivotal". Sector peer AstraZeneca also fell after reiterating full-year earnings guidance issued as recently as December 20th. The move was required because the company sent out a spreadsheet to City analysts with confidential "out of date planning information" embedded within it; Astra maintains that the embedded information does not represent the company's view of expected financial performance for the full year 2011, or for future periods. Chip designer ARM Holdings was the high riser on the FTSE 100 after some positive broker commentary. Citi reiterates its buy rating on the stock, while Panmure Gordon said that the group is "at the heart of the mobile revolution".Supermarket giant Morrisons was among the worst performers after like-for-like (LFL) sales growth slowed in the final six weeks of 2011. LFL sales excluding fuel rose 0.7% in the period, down from the 2.4% growth seen in the third quarter. InterContinental Hotels and Fresnillo were higher after Deutsche Bank upgraded both their ratings from hold to buy. Antofagasta was lower after the same broker cut its recommendation from buy to hold.FTSE 250 MOVERSSports fashion wear retailer JD Sports Fashion jumped after confirming press speculation that it is in talks to buy assets of struggling camping equipment retailer Blacks Leisure and that talks are at an advanced stage. Shares in Blacks Leisure were suspended on 6 January as the company enters an administration process.Housebuilder Persimmon rose after saying it expects a 50% increase in underlying pre-tax profit after it introduced a raft of measures to combat the sluggish UK housing market. An improvement in underlying operating profit and a reduction in net finance costs will result in full year underlying pre-tax profit being towards the top end of analysts' expectations, the group said.BCFTSE 100 - RisersARM Holdings (ARM) 624.50p +2.46%Fresnillo (FRES) 1,693.00p +1.93%Weir Group (WEIR) 2,183.00p +1.72%Rexam (REX) 366.20p +1.50%InterContinental Hotels Group (IHG) 1,191.00p +1.45%International Power (IPR) 343.30p +1.42%Aggreko (AGK) 2,118.00p +1.39%Whitbread (WTB) 1,611.00p +1.38%SSE (SSE) 1,302.00p +1.32%National Grid (NG.) 617.50p +1.31%FTSE 100 - FallersGlaxoSmithKline (GSK) 1,454.00p -2.87%Wolseley (WOS) 2,079.00p -1.89%Essar Energy (ESSR) 167.80p -1.70%Schroders (SDR) 1,274.00p -1.62%Schroders (Non-Voting) (SDRC) 1,044.00p -1.60%Man Group (EMG) 111.20p -1.33%ICAP (IAP) 315.50p -1.19%British Sky Broadcasting Group (BSY) 703.50p -1.12%Antofagasta (ANTO) 1,256.00p -1.10%British American Tobacco (BATS) 3,011.00p -0.89%FTSE 250 - RisersJD Sports Fashion (JD.) 700.00p +6.06%Exillon Energy (EXI) 287.90p +4.61%Persimmon (PSN) 502.50p +4.47%Unite Group (UTG) 170.80p +4.15%Rentokil Initial (RTO) 66.95p +3.64%EnQuest (ENQ) 107.50p +3.37%Telecity Group (TCY) 649.50p +3.01%Salamander Energy (SMDR) 233.90p +2.81%Barratt Developments (BDEV) 95.35p +2.64%Lamprell (LAM) 296.60p +2.38%FTSE 250 - FallersTalvivaara Mining Company (TALV) 255.70p -4.23%Heritage Oil (HOIL) 186.90p -3.41%Debenhams (DEB) 57.10p -2.48%Renishaw (RSW) 1,025.00p -2.29%Mitchells & Butlers (MAB) 244.40p -2.16%Ferrexpo (FXPO) 289.50p -2.16%Big Yellow Group (BYG) 250.00p -2.08%COLT Group SA (COLT) 85.75p -2.00%Phoenix Group Holdings (DI) (PHNX) 532.50p -1.84%FirstGroup (FGP) 333.40p -1.80%