London midday: Stocks dip lower ahead of Eurogroup meeting

26th Nov 2012 12:06

- Market eyeing Eurogroup meeting tonight- Inconclusive election results in Catalonia- Qatar to sell warrants on BarclaysUK equities had fallen slightly lower by midday, despite what appeared like relatively positive news-flow on a number of fronts. To a certain extent however, stocks may be taking a breather and consolidating last week's large bounce back. In any case, there can be little doubt that what was forefront and centre on market's minds was tonight's meeting of Eurozone finance ministers (the so-called Eurogroup), with an agreement that would allow for the disbursement of the next tranche of aid to Greece thought to be a possibility. In fact, the European Union's Economic Affairs commissioner Olli Rehn indicated this morning that he sees a real possibility that a deal will finally be struck. As a possible worst case scenario however, Finland has indicated that an agreement may not be reached until a meeting on December 3rd. Back in the UK, the Institute of Fiscal Studies (IFS) said the Treasury could have to raise VAT to 25% as tax revenues falter and the economy continues to struggle. Osborne may also have to abandon one of his fiscal targets - that overall UK debt should be falling in 2015-16, as well as pushing austerity measures into 2018, the IFS report added. "Since the budget, the outlook for the UK economy has deteriorated and government receipts have disappointed by even more than this year's weak growth would normally suggest," said IFS deputy director Carl Emmerson. "The planned era of austerity could run for eight years - from 2010-11 to 2017-18," he added. As regards regional elections in Catalonia, Spain, over the weekend; these seem to have been somewhat inconclusive, with barely any change in the balance of power between pro-independence and non-independence parties. But two trends seemed clear: a shift towards left-wing and anti-austerity political formations and a greater polarisation in the distribution of votes towards each extreme. Not to be ignored nevertheless, some market commentary is putting emphasis on the fact that it now seems like it is only a matter of time before matters come to ahead in Spain, even if it is several years down the road. FTSE 100: Qatar takes profits on BarclaysBarclays is now leading fallers on the top share index. Qatar Holding plans to sell its remaining warrants in the lender, which are worth around £775m, yet it will remain its largest shareholder with a 6.7% stake.Analysts at UBS have today issued an upbeat note on shares of British Land so as to reflect the company's lower risk profile and growing earnings potential. They indicate that; "Historically, we have been concerned about British Land's ageing portfolio. However, although the company's lease lengths have shortened, the company has been turning these from a threat into an opportunity." UBS has upgraded shares of the company to buy from neutral. Aberdeen Asset Management, Europe's second largest fund-manager, has just announced a 15% full year increase in underlying profit before tax, to £347.8m, versus £301.9m a year ago. Of interest, speaking on Bloomberg TV the company's Chief Executive, Martin Gilbert, indicated that one of his company's aims is to maintain a "progressive dividend policy", targeting a growth rate in the mid-teens. Compass is also moving higher analysts at Nomura raised their target price on the company's shares to 832p (from 800p). "Compass Group's results encapsulated the key attractions of the investment case: strong turnover growth (5.4%), excellent cash flow conversion and continued margin expansion (+8bp)," these analysts wrote. FTSE 250: SDL warns Bacon and sausage supplier Cranswick served up a hefty increase in half year profit but said higher pig prices during the period were an on-going concern. Pre-tax profit rose 21% to £22.5m for the six months ended September 30th 2012, while revenues climbed 6% to £418.6m. India-focused Essar Energy almost doubled revenues in the first half but saw this wiped out by costs, as well as regulation and coal supply problems in India. Group revenue was up 97% to $12.8bn, driven by the acquisition of the UK Stanlow refinery as well as higher refining revenues in India. Business, translation and communications software company SDL said it expects a profits shortfall, following a review of the firm, as its struggles against poor sales and marketing execution, as well as the tough economic environment. "Management forecasts for the year are now considered to be too optimistic against market expectations," the group said in a company statement. 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