London open: Footsie comes off earlier moderate gains

26th Jul 2013 08:05

The FTSE began the morning with moderate gains of 0.5 per cent as markets tracked the rise overnight on Wall Street. That appears to have come on the heels of an article in The Wall Street Journal from noted Fed Watcher John Hilsenrath arguing that the US central bank will maintain the size of its asset purchases at its next meeting. Despite that already being expected by investors markets are said to be particularly sensitive at the moment to any such indications. However, those initial gains proved fleeting, with the top flight index now left standing just 2 points higher at 6,598 as RBS has come under selling pressure.Acting as a backdrop, China has ordered more than 1,400 companies in 19 industries to cut excess production capacity this year as it seeks to move towards a more sustainable growth model. In a more positive vein, Activision Blizzard is leading an $8.2bn investor buyout of most of Vivendi's controlling stake in the world's largest video games company. Significantly, the group behind Call of Duty and World of Warcraft will use about $1.2bn in cash but roughly $4.6bn of debt - a large amount of leverage - to buy 429m shares from Vivendi, according to The Financial Times. Such amounts of leverage may be saying something about just how far the recovery in capital markets has come since the onset of the financial crisis.Much commented as well, the latest consumer price data in Japan revealed an 0.2% increase on the month for July, ahead of the 0.1% rise foreseen. There was some market commentary speculating this morning that the country may now indeed be nearing the point where it is able to exit from deflation. However, at least a handful of top economists have pointed out that such gains have much to do with the recent weakening in the Yen, so it might be best not to get carried away just yet even if the recent moderation in global food and oil prices have possibly also weighed on the data. No major data are scheduled for release today in London. This afternoon the US University of Michigan will release its monthly consumer confidence gauge. Revenues drop at Anglo American as China attempts to re-balance its growth model Pearson unveiled 2% revenue growth for the first half of the year, to £2,756m. However, in adjusted terms its earnings per share came in at 9.9p versus analysts´ estimates for 9.0p. Guidance for the fiscal year 2013 was reiterated.Mining giant Anglo American announced a 1% drop in its top line to $16.193bn for the first half of 2013, with management highlighting the increasing uncertainty and volatility around the short-term outlook as China moves to a more sustainable growth path and model. Profit before taxes fell by 34% to $1,994m. Nevertheless, operating cash-flow improved by 19% to $3,167m versus last year´s figures. Even so earnings per share came in at 98 US cents, comofrtably above the 90 cents expected by the consensus. BAE Systems seems to be benefitting from the upbeat outlook provided by French outfit Safran, Europe´s second largest aircraft engine manufacturer.Brewer SABMiller saw lager volumes drop in Europe and North America but toasted improved overall group revenue in the first quarter. Group revenue and group revenue per hectolitre both grew by 2.0% on an organic basis at constant currencies, but depreciation of several key currencies against the US dollar will adversely impact reported results. BG Group reported a drop in operating profit and earnings for the half year, reflecting fewer liquefied natural gas cargo deliveries, a fall in exploration and production volumes and lower realised oil and liquids prices. Total operating profit declined 5.0% to $3.9bn as revenue and other operating income slid 3.0% to $9.2bn.British Sky Broadcasting (BSkyB) achieved "record" annual results with a 7.0% increase in revenue to £7.2bn - ahead of estimates - and 4.0% jump in operating profit to £1.3bn. The company said its successful transition to more broadly-based growth, combined with the acquisition of O2's consumer broadband and fixed-line telephony business, delivered an increase of 1.4m subscription products in the fourth quarter. The company has announced a £500m share buy-back program and an 18% hike in its dividend payments even as net debt grew significantly. Some initial market commentary highlighted weak subscriber numbers but analysts at Westhouse Research, for their part, highlighted the 23% year-on-year increase in subscribers for its broadband services - an important growth driver going forward.FTSE 100 - RisersPearson (PSON) 1,326.00p +5.91%GKN (GKN) 330.90p +1.25%Standard Chartered (STAN) 1,500.00p +1.21%Hammerson (HMSO) 528.50p +1.05%Johnson Matthey (JMAT) 2,789.00p +1.01%Resolution Ltd. (RSL) 321.80p +1.00%Bunzl (BNZL) 1,384.00p +0.95%BAE Systems (BA.) 442.50p +0.84%CRH (CRH) 1,362.00p +0.81%Standard Life (SL.) 381.10p +0.79%FTSE 100 - FallersRoyal Bank of Scotland Group (RBS) 329.70p -2.48%Rolls-Royce Holdings (RR.) 1,210.00p -2.42%British Sky Broadcasting Group (BSY) 833.50p -1.94%Persimmon (PSN) 1,255.00p -0.79%Vodafone Group (VOD) 192.05p -0.75%SABMiller (SAB) 3,138.00p -0.70%Fresnillo (FRES) 1,018.00p -0.68%Randgold Resources Ltd. (RRS) 4,687.00p -0.59%Admiral Group (ADM) 1,392.00p -0.57%InterContinental Hotels Group (IHG) 1,915.00p -0.57%FTSE 250 - RisersCOLT Group SA (COLT) 104.30p +3.27%Ted Baker (TED) 1,940.00p +2.92%Hochschild Mining (HOC) 170.00p +2.41%Centamin (DI) (CEY) 38.92p +2.31%Bumi (BUMI) 230.00p +2.22%Imagination Technologies Group (IMG) 255.50p +2.16%EnQuest (ENQ) 127.40p +2.08%AZ Electronic Materials SA (DI) (AZEM) 313.60p +1.98%Big Yellow Group (BYG) 431.80p +1.94%Homeserve (HSV) 280.20p +1.89%FTSE 250 - FallersCSR (CSR) 591.00p -1.50%Crest Nicholson Holdings (CRST) 331.90p -1.48%KCOM Group (KCOM) 83.45p -1.13%Oxford Instruments (OXIG) 1,327.00p -1.12%Evraz (EVR) 101.90p -0.78%Tullett Prebon (TLPR) 351.30p -0.76%esure Group (ESUR) 299.80p -0.76%Polymetal International (POLY) 617.00p -0.72%Dairy Crest Group (DCG) 493.70p -0.70%Mitchells & Butlers (MAB) 410.20p -0.68%AB