London midday: Stocks off lows but still firmly in the red

16th Feb 2012 11:40

- Greek bailout hit by more delays. - Moody's reviews ratings on 114 European financial institutions.- Real Eurozone GDP forecasts slashed in ECB survey.The FTSE 100 has come off its intraday low of 5,831 but still remains firmly in the red as delays in Greece, a warning to banks from Moody's and some worrying growth estimates from an ECB survey dampening the outlook for the global economy.The Footsie has managed to trim its losses in the last few hours, although at least some investors are on edge due to the apparent 'turn for the worse' which the news-flow surrounding Greece has taken. Thus, economists at Barclays Capital wrote this morning that, "in sum, the risk of a full-fledged default has risen markedly over the past days because of the political maneuvering that casts a large shadow on the commitment to agreed measures and raises implementation risks significantly."Eurogroup President Jean-Claude Juncker said last night that Eurogroup leaders would make "all the necessary decisions" regarding a Greek bailout at a meeting on February 20th. Meanwhile, Greece's finance minister Evangelos Venizelos has accused Europe's leaders of "playing with fire" in delaying the next tranche of aid. "In the euro area, there are plenty who don't want us anymore. There are some playing with fire, domestically and abroad," he said. German counterpart Wolgang Schaeuble has been reported as saying that he did not want to "pour money into a bottomless pit".Ratings agency Moody's says that it is reviewing the ratings of no less than 114 financial institutions across Europe and 17 global entities as the sovereign debt crisis continues to take its toll. The credit ratings agency aptly points out that the "adverse and prolonged" impact of the euro area crisis makes the operating environment "very difficult" for European banks. It also notes that the recent downgrade of nine European sovereigns last Monday continues to put pressure on the institutions' creditworthiness. The European Central Bank (ECB) has said that a survey of professional forecasters shows that they have slashed their forecasts for economic growth in 2012 and 2013. Real Eurozone gross domestic product is expected to contract by 0.1% this year and grow by 1.1% next year, compared with previous predictions of 0.8% and 1.6% growth, respectively. "Respondents attributed this more negative baseline outlook to additional ?scal consolidation measures in many euro area countries, a further tightening of credit conditions, lower con?dence and a generally higher level of uncertainty," the ECB said.In domestic news, consumer confidence recovered at the start of 2012, to stand at its best level since last August, driven by a noticeable improvement in public's outlook for the economy, according to Nationwide. Economists, however, warn that any sustained improvement will take time. ESSAR FALLS AFTER FILING PETITION AGAINST INDIAN TAX RULINGEssar Energy has taken a hit after announcing that its Indian oil subsidiary has today filed a petition in the Supreme Court of India to review the $1.235bn repayment of deferred sales tax. The Indian Supreme Court ruled against the Gujarat High Court last month in letting Essar Oil pay sales tax in deferred instalments.BAE Systems, the defence contractor, was also lower after seeing headline sales fall by 14% in the 12 months ended December 31st. The group said that "little sales growth" is expected for 2012 in the current market conditions. Financials were unsurprisingly out of favour today after Moody's dampened sentiment in the global banking sector. Lloyds, Barclays, HSBC and Royal Bank of Scotland were among the stocks in the red. Miners were also lower as metals prices fell on the back of concerns over the global economy. Evraz, Anglo American, Antofagasta, Polymetal and Rio Tinto were among the worst performers.Information solutions provider Reed Elsevier was a rare bright spark after seeing underlying revenues increase 2% in 2011, with all five business areas contributing to growth except the Exhibitions division, which was held back by biennial cycling. InterContinental Hotels wasn't far behind after having its target price upped by both Nomura and Panmure Gordon following Tuesday's results.MINERS TANK ON THE FTSE 250Talvivaara Mining tumbled nearly 13% by midday as investors digested a series of announcements. The firm reported a full-year improvement in net sales and profits, while achieving record production levels of nickel and zinc in the fourth quarter. However, investors may be shaken by the revelation that Chief Executive Officer Pekka Perä is to step down from day-to-day management and become the Executive Chairman. The group also announced its intention of placing over 24.5m new ordinary shares (10% of the number of existing shares). Mining peer African Barrick Gold, the Tanzania focused gold producer, is to triple its dividend for 2011 on the back of a 30% increase in earnings and strong cash generation, although production and sales fell dramatically in the final quarter. Shares dropped over 9%.BCFTSE 100 - RisersReed Elsevier (REL) 546.00p +2.25%InterContinental Hotels Group (IHG) 1,396.00p +1.16%Imperial Tobacco Group (IMT) 2,474.00p +1.02%Associated British Foods (ABF) 1,230.00p +0.99%Carnival (CCL) 1,935.00p +0.78%National Grid (NG.) 643.50p +0.55%Severn Trent (SVT) 1,543.00p +0.52%Unilever (ULVR) 2,065.00p +0.49%Shire Plc (SHP) 2,304.00p +0.48%SSE (SSE) 1,282.00p +0.47%FTSE 100 - FallersEvraz (EVR) 418.80p -4.01%Essar Energy (ESSR) 121.30p -3.65%IMI (IMI) 906.50p -3.15%Anglo American (AAL) 2,614.50p -2.81%Antofagasta (ANTO) 1,290.00p -2.79%BAE Systems (BA.) 324.70p -2.49%Polymetal International (POLY) 1,085.00p -2.43%Rio Tinto (RIO) 3,599.50p -2.27%International Consolidated Airlines Group SA (IAG) 169.40p -2.19%Man Group (EMG) 131.30p -2.16%FTSE 250 - RisersLancashire Holdings (LRE) 773.50p +1.91%Spirit Pub Company (SPRT) 56.50p +1.80%BH Global Ltd. GBP Shares (BHGG) 1,186.00p +1.37%Homeserve (HSV) 247.10p +1.35%Exillon Energy (EXI) 246.10p +1.28%Moneysupermarket.com Group (MONY) 122.70p +1.24%Kentz Corporation Ltd. (KENZ) 471.40p +1.05%ITE Group (ITE) 237.20p +0.85%Galliford Try (GFRD) 504.00p +0.80%Euromoney Institutional Investor (ERM) 708.00p +0.71%FTSE 250 - FallersTalvivaara Mining Company (TALV) 284.00p -13.81%African Barrick Gold (ABG) 469.70p -9.41%Elementis (ELM) 159.00p -3.87%Heritage Oil (HOIL) 185.10p -3.84%Petropavlovsk (POG) 660.00p -3.58%Afren (AFR) 127.90p -3.47%Ferrexpo (FXPO) 324.70p -3.36%Henderson Group (HGG) 119.80p -3.31%Cable & Wireless Communications (CWC) 35.46p -3.30%New World Resources A Shares (NWR) 494.20p -3.29%