London midday: Resource stocks pull Footsie to daily lows

14th Dec 2011 12:00

There were just seven risers on London's FTSE 100 at midday, as miners and oil stocks pulled the blue chip index to its daily low of 5,438, a fall of around 1%. In economic news, UK unemployment rose by 128,00 in the three months to October to a reach a total of 2.64m, according to the Office for National Statistics. The rise was not as big as forecast by some economists, who predicted the figure would come in at 140,000. However, the number of unemployed people is the highest since 1994, while the unemployment rate, which reached 8.3% of 'economically active' people, was the highest since 1996. METALS PRICES FALL ON FED, CHINA DATALast night, the Federal Open Market Committee (FOMC) decided, as expected, to keep interest rates on hold and said the US economy was making modest progress as global growth slows. It also said it would not be initiating any new stimulus measures to bolster growth. Dollar-denominated metals prices were on the decline as the greenback strengthened following the FOMC statement. Miners were among the worst performers, with Fresnillo, Rio Tinto, ENRC and Antofagasta registering steep falls.Adding more downward pressure to miners, the Conference Board announced last night that its Leading Economic Index for China fell 0.1% in October to 160.1, following a 0.4% rise the month before. "The risk of a more substantive slowdown in China's economic growth than anticipated so far is rising amid deteriorating external conditions and domestic real estate tightening," said the Conference Board China Center resident economist Andrew Polk.Iconic British luxury brand Burberry, a company with high exposure to China and often sensitive to the nation's economic outlook, was among the worst performers at lunchtime, dropping nearly 3%.Automotive engineer GKN was also a heavy faller on news that the Chinese Ministry of Commerce will impose punitive duties on some automobile imports from the United States. Some observers believe that the announcement is a reaction to the World Trade Organization's recent decision to reject a Chinese appeal to a ruling against US duties on its tire exports. OIL PRICES DECLINE AHEAD OF OPEC MEETINGMeanwhile, oil prices were also on the decline before a meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna later today. Brent crude for January delivery was down 0.64% at $108.80 a barrel just before midday in London as rumours circulate that OPEC could be setting a production ceiling at 30m barrels a day (bpd) for the first half of next year, according to Bloomberg. OPEC nations pumped 30.355m bpd in November, the news agency notes.As such, oil stocks were out of favour, with Petrofac and Essar Energy among the heavy fallers.LOGICA PLUMMETS, SUPERGROUP ON THE UPLogica, one of the largest providers of contract computer programmers in Europe, dropped nearly 18% on the FTSE 250 after saying that it is to cut more than 1,300 employees as it responds to an increasing reluctance on the part of its clients to commit to contract renewals.The company, which has seen its share price slump more than 40% in the last six months, warned at the beginning of November of weakening revenues and margins in the third quarter, and the disturbing trend on revenues has accelerated in the fourth quarter. Shares in clothing firm Supergroup raced ahead on Wednesday morning after group revenue shot up 51%. Underlying pre-tax profits however eased slightly. The company said that the warehouse system and operational issues, which caused the company problems after the firm implemented an upgrade programme to increase capacity and efficiency at its Barnwood site, have been resolved. Struggling package tour operator Thomas Cook fell after its delayed full-year results disappointed. The company made an underlying profit before tax of £175m in the year to the end of September, down from £248m the year before.ITALY, GERMANY SELL BONDS - YIELDS FALLThe Italian Treasury sold €3bn in five-year debt with a bid to cover ratio of 1.42 (Previous: 1.47) and at a yield of 6.47% (Previous: 6.29%). Interestingly, Italian 10-year debt yields fell moderately following the auction, with a 3 basis point fall to 6.65%. Nonetheless, it must be noted that trading conditions are being described as light and the size of the issue as small, so that reaction may be exaggerated. A strategist from a large Madrid-based bank has described demand at the Italian auction as "very limited." The German Treasury, for its part, has sold €4.18bn in two-year bills out of a total of €5bn on offer. That on a yield of 0.25%, versus 0.39% the last time around: this is the lowest yield since the birth of the single currency. Bid to cover improved to 1.4, from 1.1 times the amount issued at the previous auction. BCFTSE 100 - RisersNext (NXT) 2,611.00p +0.81%Resolution Ltd. (RSL) 253.80p +0.75%British American Tobacco (BATS) 3,035.00p +0.46%Morrison (Wm) Supermarkets (MRW) 317.20p +0.35%National Grid (NG.) 608.50p +0.33%Reckitt Benckiser Group (RB.) 3,202.00p +0.06%Imperial Tobacco Group (IMT) 2,377.00p +0.04%FTSE 100 - FallersFresnillo (FRES) 1,591.00p -5.35%Ashmore Group (ASHM) 314.50p -3.76%GKN (GKN) 172.80p -3.25%Petrofac Ltd. (PFC) 1,403.00p -2.77%Essar Energy (ESSR) 200.90p -2.76%Rio Tinto (RIO) 3,098.50p -2.72%ARM Holdings (ARM) 554.00p -2.72%Burberry Group (BRBY) 1,159.00p -2.61%Eurasian Natural Resources Corp. (ENRC) 631.00p -2.55%Aggreko (AGK) 1,803.00p -2.54%FTSE 250 - RisersSupergroup (SGP) 550.00p +9.45%Rathbone Brothers (RAT) 1,036.00p +3.70%Gem Diamonds Ltd. (DI) (GEMD) 185.50p +3.06%Carpetright (CPR) 438.00p +2.58%Pace (PIC) 68.10p +2.02%Kenmare Resources (KMR) 39.97p +1.19%Premier Foods (PFD) 5.94p +1.11%BBA Aviation (BBA) 178.70p +1.02%Brown (N.) Group (BWNG) 238.90p +1.01%Savills (SVS) 311.40p +0.94%FTSE 250 - FallersLogica (LOG) 60.90p -17.76%Allied Gold Mining (ALD) 149.70p -7.25%Big Yellow Group (BYG) 238.00p -7.03%Thomas Cook Group (TCG) 13.92p -6.07%Kesa Electricals (KESA) 67.80p -5.83%Home Retail Group (HOME) 82.20p -5.79%African Barrick Gold (ABG) 455.50p -5.28%Imagination Technologies Group (IMG) 473.90p -4.93%JD Sports Fashion (JD.) 600.00p -4.91%Afren (AFR) 77.45p -4.79%