London midday: Italian yields fall, Experian leads recovery

10th Nov 2011 12:16

London's blue chip index has erased earlier losses to trade flat around lunchtime as Italian 10-year bond yields fell back below the critical 7% after the country's debt auction. Meanwhile, the Bank of England revealed at midday that it had kept interest rates at the record low level of 0.5%.ITALY YIELDS FALL BELOW 7%; BoE RATES UNCHANGEDThe Italian debt auction has seen the country's Treasury sell 1-year debt at a yield of 6.98%, the highest since 1997. 10 year Italian Treasury bond yields however are nonetheless are at the day's lows, at 6.88% by 12:20 in London, after having hit an intra-session high of 7.4% yesterday. The Treasury sold €5bn as expected with a bid-to-cover ratio - calculated by dividing the number of bids received by the number of bids accepted to measure the auction demand - of around 2.While the borrowing rate edged below the key unsustainable level of 7%, it does not however mean that the heavily indebted nation is out of the water. "With 10-year yields starting to resemble those of Ireland prior to its bailout; the extreme of the trajectory past 7% and beyond left many feeling that Italy could be beyond redemption," said analyst Brenda Kelly at CMC Markets.Meanwhile, the Bank of England has kept its official Bank Rate at 0.5%, and voted to continue with its programme of asset purchases totalling £275bn financed by the issuance of central bank reserves. The decisions were expected. Having already approved an additional four month asset repurchase programme of £75bn just a few weeks ago some analysts, such as those from Barclays, believe that announcing a further increase now would have seemed odd, although the possibility was not completely dismissed. Nonetheless, most economists consider a further increase in the asset repurchase programme as likely in February. UK consumer economist Fionnuala Earley from RBS said, "there is no doubt that the monetary authorities will be considering their policy options given the depleting arsenal of ammunition at their disposal, particularly in the face of the ongoing Eurozone crisis."MIXED REACTIONS TO UPDATESExperian, the credit reference and anti-fraud company, jumped over 6% after hiking its interim dividend by 14% following a strong financial performance in the first half of its financial year. Prime Markets said it expects the stock to retest its 52-week high of 841p in the coming weeks.Mining colossus Anglo American was also in demand after selling off a 24.5% stake in its Chilean copper mining and smelting business, Anglo American Sur, for a reported $5.39bn to Japanese trading house Mitsubishi Corporation. Supermarket chain Morrisons was next in line as it reported record numbers of customers in the third quarter, with sales growing ahead of the market. Topping the fallers however was Admiral, the insurance titan which lost nearly 30% of its market value yesterday after it warned that full-year profits would be at the lower end of expectations. Bother UBS and Credit Suisse downgraded their ratings on the stock today.Vedanta Resources also took a tumble after attributable profit (which is the bottom line figure from which the company can distribute dividends without dipping into reserves) slumped from $337m to $28m at the half-way stage last year. Other miners' performances were not so bright either, with Xstrata, Randgold Resources, Kazakhyms and Antofagasta falling lower.Meggitt was heading lower after Citi downgraded the stock from buy to neutral.FTSE 250: HOMESERVE UP, WH SMITH DOWNShares in repair services firm HomeServe roared higher today after it said it had restarted sales activity in a "limited way" following the suspending of its telesales operation 11 days ago. The situation has seen the firm's share price tank from 485.3p (Friday 28 October) to just 218.5p as of yesterday's close (9 November). However, today's news has prompted investors to buy back in, with the shares a staggering 25.35% higher at 273.9p.Meanwhile, books and stationary retailer WH Smith was the worst performer on the index after total group sales fell 3% in the last 10 weeks, down 6% on a like-for-like basis.BCFTSE 100 - RisersExperian (EXPN) 831.50p +6.06%Anglo American (AAL) 2,416.00p +2.68%Morrison (Wm) Supermarkets (MRW) 313.10p +2.15%Cairn Energy (CNE) 286.60p +1.99%Resolution Ltd. (RSL) 258.70p +1.81%Royal Bank of Scotland Group (RBS) 21.47p +1.80%ARM Holdings (ARM) 627.00p +1.79%Standard Chartered (STAN) 1,397.00p +1.45%Wolseley (WOS) 1,855.00p +1.42%Investec (INVP) 362.40p +1.34%FTSE 100 - FallersAdmiral Group (ADM) 841.50p -5.18%Vedanta Resources (VED) 1,187.00p -5.04%Meggitt (MGGT) 371.70p -3.80%Xstrata (XTA) 999.00p -2.11%Kingfisher (KGF) 249.20p -1.85%Randgold Resources Ltd. (RRS) 7,425.00p -1.72%HSBC Holdings (HSBA) 497.80p -1.68%Kazakhmys (KAZ) 909.50p -1.46%Antofagasta (ANTO) 1,168.00p -1.43%Hargreaves Lansdown (HL.) 493.60p -1.38%FTSE 250 - RisersHomeserve (HSV) 273.90p +25.35%Premier Foods (PFD) 4.22p +5.00%Cape (CIU) 344.30p +4.97%Halfords Group (HFD) 347.70p +3.79%Rank Group (RNK) 141.10p +2.99%Paragon Group Of Companies (PAG) 179.10p +2.87%Thomas Cook Group (TCG) 42.65p +2.60%BH Macro Ltd. EUR Shares (BHME) € 20.00 +2.56%Regus (RGU) 82.55p +2.55%Senior (SNR) 168.40p +2.50%FTSE 250 - FallersWH Smith (SMWH) 506.00p -8.00%Exillon Energy (EXI) 285.10p -6.43%Daejan Holdings (DJAN) 2,600.00p -5.66%Howden Joinery Group (HWDN) 108.90p -4.81%Kesa Electricals (KESA) 94.40p -4.65%Renishaw (RSW) 911.50p -4.45%Supergroup (SGP) 680.00p -4.36%Talvivaara Mining Company (TALV) 208.00p -3.66%Domino Printing Sciences (DNO) 550.50p -3.59%JPMorgan Asian Inv Trust (JAI) 188.50p -3.33%