London midday: Miners down after remarks from Chinese finmin, Tesco lower

22nd Sep 2014 12:23

Come midday London´s Footsie was by the far worst performer in Europe following a profit warning from troubled food retailer Tesco and remarks from China´s finance minister which may have dashed hopes of further policy stimulus.Worries over global growth prospects in China and the Eurozone weighed on Wall Street on Friday and pushed the US dollar index higher for a tenth consecutive week - its longest stretch of gains since March 1967.Despite the strong gains in the dollar technical analysts at Charles Stanley told clients that "there is still little in the chart to suggest that there are many sellers about."On Friday Barclays Research wrote to clients saying that it still expected Beijing to cut its main policy rate towards the turn of the year, despite recent easing measures.However, China is not the only source of worry for markets. Thus, in the aftermath of the European Central Bank´s targeted long-term refinancing operation (TLTRO), on 18 September, analysts had begun to incorporate the start of ´full blown´ quantitative easing into their forecasts.Speaking on Friday Bank of Italy governor Ignasio Visco indicated that further monetary easing by the ECB may not be necessary. He added that markets had overinterpreted the result of the first TLTRO. In total eight TLTROs will be carried out and demand for liquidity from banks can be expected to pick up, he said.Draghi is due to speak on Monday morning, at 15:00, when he will address the European Parliament's Economic and Monetary Committee, with the focus expected to be very much on monetary policy.Tesco warns, shares plummet, Chinese finmin speaks, miners downIn UK company news, Tesco warned its profit forecast for the six months ended 23 August would be lower than expected, saying it had overestimated previous guidance by £250m. In reaction to the news the company suspended four of its executives. Analysts at Cantor Fitzgerald however were not caught off guard, pointing out how they had long seen the company´s margins as unsustainable.Miners dropped sharply following the remarks from China´s finance minister mentioned above.Communications group WPP announced plans to invest $25m in the AppNexus to enhance its position as the world's largest independent ad technology provider. The group said that by taking a greater stake in AppNexus, it "further cements its leadership position in ad tech and programmatic targeting".Dairy Crest sees first half group profits broadly in line with last year, with sales from its four key brands having grown at a similar pace, of 4%, as in the first quarter, the company said in a pre-close trading update. Property profits from the sale of surplus depots will make up a greater proportion of its profits than in the same period last year.Property developer British Land has sold £210m of apartments at a flagship development in London's Mayfair. British Land said it had exchanged on the sale of 18 flats at its Clarges Mayfair development since releasing a number of the properties for sale during the summer. Several of the properties fetched record prices above 5,000 pounds per square foot, according to remarks from a company spokesman to Bloomberg.Iron ore miner London Mining announced it was considering terminating its contract withGlencore, after the firms entered a dispute over an offtake agreement.