London midday: Stocks extend gains, RBS and IAG on the rise

23rd Jan 2012 11:46

- Markets await news from Greece.- Lagarde warns of "1930s moment";- RBS rises on rumours of CEO waiving bonus.London's benchmark index had extended gains by midday with the market showing their optimism as investors awaited news from Greece. US stock futures were also pointing to a positive start on Wall Street.The Institute of International Finance (IIF) seems to have hardened its stance in its negotiations with Greece. Charles Dallara, theManaging Director of the IIF, the body which is negotiating on behalf of private sector investors (PSI) in the Greek bond swap, indicated yesterday that private bondholders have made their best offer and that it is now up to the International Monetary Fund (IMF) and the European Union to decide whether the deal is acceptable and whether it will be enough to stave off a default or not. Reports last week suggested that private bondholders were willing to take a haircut of between 65% to 70% as part of a "voluntary" debt swap plan and that the coupon on the new bonds issued would be somewhere between 3% and 4%. In other news, Managing Director of the IMF Christine Lagarde has said this morning that unless world leaders deal with the current crisis, we may be facing a "1930s moment". "It is not about saving any one country or region. It is about saving the world from a downward economic spiral. It is about avoiding a 1930s moment, in which inaction, insularity and rigid ideology combine to cause a collapse in global demand," she said in Berlin.IAG TAKES OFF WHILE ENGINEERS FALLAirline International Consolidated Airline Group (IAG) was in demand after revealing that the first flight of its new low cost airline, Iberia Express, will take off on March 25th. IAG president Antonio Vazquez spoke at the New Economic Forum held in Madrid and explained that the new low cost airline was necessary to face oncoming competition from a new low cost high-speed railway system.Engineers Weir and IMI were leading the downside after both stocks were hit with broker downgrades. The former was cut from overweight to neutral by JP Morgan Cazenove while the latter was cut from buy to neutral by UBS.Nationalised lender Royal Bank of Scotland was performing well on unconfirmed reports that Chief Executive Officer Stephen Hester has waived his bonus, which was expected to be around £1.6m this yearEdinburgh-based explorer Cairn Energy rose after saying it is to partner with Statoil ASA to help exploit the Pitu block in the Baffin Bay Basin, west of Greenland. Under Cairn's agreement with Statoil, the latter will acquire a working interest of 30.625% in the Pitu licence, subject to the approval of the Greenland Government. Rockhopper, a firm connected with takeover rumours with Cairn, was in demand after the Sunday Times reported this weekend that US giant Anadarko Petroleum Corp could be considering a move to takeover the company.Tesco was on the up despite rival supermarket Asda announcing that it will create 5,000 jobs and open more stores this year. FTSE 250 MOVERS: RENISHAW, HUNTING PROVIDE A LIFT Renishaw was a high riser after UBS upgraded the precision tool maker from neutral to buy, saying that the long-term story outweighs near-term risks.Oilfield support services provider Hunting rose 4% after saying results for 2011 are set to be above market expectations after a strong finish to the year. Meanwhile, oil firm Afren fell after announcing that despite 2011 average production increasing year-on-year, it was held back by a longer-than-anticipated period of facilities related downtime at the Ebok field in Nigeria due to safety requirements and commissioning work. There is to be a small shake-up at the top at groceries deliverer Ocado after the group's Chief Financial Officer, Andrew Bracey, announced his intention to turn over a new leaf at Michael Page, the recruitment firm. Ocado fell while Michael Page nudged higher.In small cap news, a big mover was Ithaca Energy which jumped around 20% after confirming that it has received a "confidential, non-binding proposal to acquire all of the outstanding shares of the company." BCFTSE 100 - RisersVedanta Resources (VED) 1,180.00p +2.97%Essar Energy (ESSR) 126.00p +2.86%BP (BP.) 479.85p +2.65%BAE Systems (BA.) 321.80p +2.58%International Consolidated Airlines Group SA (IAG) 171.80p +2.51%Royal Bank of Scotland Group (RBS) 28.08p +2.33%SABMiller (SAB) 2,383.50p +2.32%Prudential (PRU) 710.00p +2.31%Aviva (AV.) 358.40p +2.14%Fresnillo (FRES) 1,759.00p +1.97%FTSE 100 - FallersWeir Group (WEIR) 1,906.00p -2.46%IMI (IMI) 856.00p -2.45%Carnival (CCL) 1,948.00p -2.06%Burberry Group (BRBY) 1,339.00p -1.18%Smith & Nephew (SN.) 602.50p -0.99%Reckitt Benckiser Group (RB.) 3,378.00p -0.94%Centrica (CNA) 281.10p -0.78%Kingfisher (KGF) 258.40p -0.73%Wolseley (WOS) 2,222.00p -0.71%Johnson Matthey (JMAT) 2,052.00p -0.68%FTSE 250 - RisersDixons Retail (DXNS) 14.70p +8.65%Cable & Wireless Worldwide (CW.) 19.14p +6.93%Hunting (HTG) 869.00p +5.65%Renishaw (RSW) 1,145.00p +4.85%Domino's Pizza UK & IRL (DOM) 480.00p +4.35%Berendsen (BRSN) 468.10p +4.02%Perform Group (PER) 259.50p +3.80%Rank Group (RNK) 132.00p +3.12%Computacenter (CCC) 391.00p +3.08%Heritage Oil (HOIL) 192.40p +2.78%FTSE 250 - FallersAfren (AFR) 116.10p -6.82%Kesa Electricals (KESA) 69.50p -2.80%Misys (MSY) 303.20p -2.19%DS Smith (SMDS) 229.30p -1.88%Micro Focus International (MCRO) 446.70p -1.82%Provident Financial (PFG) 982.50p -1.65%Rotork (ROR) 1,878.00p -1.57%SVG Capital (SVI) 220.00p -1.35%Mitchells & Butlers (MAB) 267.00p -1.29%New World Resources A Shares (NWR) 469.00p -1.26%