London midday: G4S leads markets higher

18th Dec 2012 11:27

- Stocks advance on 'fiscal cliff' hopes- Miners track metal prices higher- G4S up on renewed confidenceA decent performance by G4S and the mining sector ensured that the FTSE 100 remained firmly in positive territory on Tuesday morning, with hopes over the US budget talks driving risk appetite."European equities started the session in the green this morning as markets crept higher on speculation that President Barack Obama and House Speaker John Boehner are making strides towards compromise as they seek to bridge the political divide in the ongoing slow moving 'fiscal cliff' talks," said sales trade Matt Basi from CMC Markets.Obama has reportedly proposed raising taxes for those that earn over $400,000, a higher threshold than the $250,000 annual salary he had previously targeted. While Boehner's proposal at the weekend offered to raise taxes on those earnings over $1m in exchange for cuts to entitlement spending, it appears that the real negotiations have officially begun.However, without a deal by the January 1st deadline, the $600bn in automatic spending cuts and tax increases which come into effect are expected to pull the US economy back into recession. In other news: Sweden's central bank opted to lower its benchmark policy rate by 25 basis points to 1%, as expected; UK consumer price inflation was unchanged in November at an annual rate of 2.7%, in line with estimates; while a debt auction in Spain saw yields come down and bid-to-cover ratios improve.FTSE 100: Confidence returning to G4SSecurity solutions group G4S was a high riser on Tuesday after the Financial Times reported that the company is one of six selected to bid for welfare-benefit call-centre contracts worth £150m over four years. Seymour Pierce analyst Caroline de la Soujeole said that this "puts to bed any idea that the government is having cold feet on outsourcing following G4S's Olympic problems". Other potential bidders include Serco and Capita. The stock was upgraded this morning by Panmure Gordon from 'hold' to 'buy'.G4S also announced this morning that ITV's CEO Adam Crozier, former Capgemini deputy manager Paul Spence and Petrofac's CFO Tim Weller would be joining the board as non-executive directors. Chairman John Connolly said: "their experience in key G4S sectors and countries will be invaluable in helping to continue to guide the strategic development of the group."Mining stocks were performing well today, tracking commodities prices higher on hopes that the US economy can avert the 'fiscal cliff'. ENRC, Vedanta and Rio Tinto were among the best performers. However, Kazakhmys was bucking the red after Deutsche Bank downgraded its rating on the stock to 'hold' and cut its target price from 1,066p to 746p. Oilfield services giant Petrofac was lower despite reiterating its target of achieving net profit growth of at least 15% this year, saying that operations continue to perform in line with expectations. Whitbread gained after saying that it has raised £51.04m from the sale and leaseback of seven Premier Inns and joint-site restaurants. The price represents a profit over book value of £19.6m. Engineering group Rolls-Royce rose after signing a $1bn contract, at list prices, with Japan's Skymark Airlines for Trent 900 engines to power six Airbus A380 aircraft. FTSE 250: Insurers hit by Sandy loss estimatesSector peers Hiscox and Catlin were lower after revealing their estimates for the impact of Superstorm Sandy. Hiscox estimates net claims of around £90m, while Catlin predicts Sandy-related losses of $200m. ??Support services and construction group Interserve gained after acquiring Advantage Healthcare from Rutland Partners and management for a cash consideration of £26.5m. Egyptian gold miner Centamin continued to rise after saying yesterday that gold exports had resumed at its flagship Sukari mine. Investors are now waiting for mining operations to restart at the project following last week's suspension.FTSE 100 - RisersG4S (GFS) 257.40p +2.84%Eurasian Natural Resources Corp. (ENRC) 277.70p +2.62%Vedanta Resources (VED) 1,139.00p +2.15%Aggreko (AGK) 1,699.00p +2.10%Carnival (CCL) 2,523.00p +2.10%Whitbread (WTB) 2,462.00p +1.78%IMI (IMI) 1,085.00p +1.78%Rio Tinto (RIO) 3,531.00p +1.76%ITV (ITV) 103.00p +1.68%BHP Billiton (BLT) 2,158.50p +1.60%FTSE 100 - FallersHargreaves Lansdown (HL.) 690.00p -1.29%Vodafone Group (VOD) 156.55p -1.04%Burberry Group (BRBY) 1,247.00p -0.87%Petrofac Ltd. (PFC) 1,668.00p -0.71%Kazakhmys (KAZ) 777.50p -0.64%GlaxoSmithKline (GSK) 1,357.00p -0.62%Schroders (SDR) 1,648.00p -0.60%Serco Group (SRP) 535.00p -0.47%Sainsbury (J) (SBRY) 347.10p -0.43%Compass Group (CPG) 732.00p -0.41%FTSE 250 - RisersNew World Resources A Shares (NWR) 283.90p +7.70%Imagination Technologies Group (IMG) 409.60p +6.81%Heritage Oil (HOIL) 187.00p +5.95%IP Group (IPO) 109.90p +3.19%Essar Energy (ESSR) 122.50p +3.11%FirstGroup (FGP) 196.40p +3.04%Centamin (DI) (CEY) 43.30p +2.75%Man Group (EMG) 84.10p +2.56%Ruspetro (RPO) 80.15p +2.30%St. Modwen Properties (SMP) 227.80p +2.29%FTSE 250 - FallersCatlin Group Ltd. (CGL) 476.00p -4.26%Renishaw (RSW) 1,854.00p -3.08%William Hill (WMH) 331.10p -1.49%Redrow (RDW) 160.30p -1.29%Beazley (BEZ) 173.70p -1.25%Rightmove (RMV) 1,455.00p -1.02%Genus (GNS) 1,370.00p -1.01%NMC Health (NMC) 177.00p -0.84%Salamander Energy (SMDR) 167.40p -0.83%IG Group Holdings (IGG) 446.30p -0.82%BC