London open: Footsie edges higher, but StanChart plummets

7th Aug 2012 08:30

- StanChart tumbles on Iran dealings- IHG jumps after half-yearly report- Optimism increases in the EurozoneThe Footsie edged higher on Tuesday morning after having closed at a three-month high the day before but Standard Chartered grabbed the headlines early on, taking a tumble in the opening hour on the back of allegations of hiding dealings with Iran.The FTSE 100 hasn't closed above 5,800 since it finished at 5,812 on May 1st. Stocks raced ahead yesterday after Germany backed the European Central Bank's (ECB's) plan to buy Spanish and Italian bonds. Analyst Craig Erlam from Alpari said this morning that risk appetite is expected to remain high: "This is likely to continue to be the trend over the coming weeks until we see some concrete steps taken by the central banks. It is rare that comments made in the Eurozone keep sentiment high for sustained periods of time. However, there is something different about this one."Meanwhile, Spain's Prime Minister Mariano Rajoy hinted over the weekend that the country may need to ask for aid. "Signs that the Spanish government will accept a bailout, along with European and Asia's being able to respond to the solid US jobs report from Friday caused markets to trade higher yesterday," said trader Simon Furlong from Spreadex."UK and European manufacturing data this morning will help keep market momentum if we see some encouraging numbers," he said.FTSE 100: StanChart drops 19% early onEmerging markets-focused banking titan Standard Chartered fell after the US banking regulator accused it of collusion with the government of Iran to hide transactions from authorities. Nomura, Oriel Securities and Bank of America all downgraded their ratings on the stock this morning.According to the notice served on Standard Chartered Bank (SCB), a wholly owned subsidiary of Standard Chartered: "For almost ten years, SCB schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250bn, and reaping SCB hundreds of millions of dollars in fees. SCB's actions left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity." Nomura has cut its recommendation on shares of StanChart to neutral from buy. On fundamentals alone it is their preferred stock in the sub-sector, but they now see material headline risk. More specifically, they note that the amounts in question are large (250bn dollars), the hard language used by the regulator and allegations that these operations were led by its most senior management. Heading the other way was Holiday Inn owner InterContinental Hotels after seeing revenues rise in the first half and saying that it would return $1bn to shareholders.Support services group AMEC rose after winning a design contract from French utility company GDF Suez, which wants to use AMEC's expertise on its Cygnus gas field development in the UK bit of the North Sea.Mining giant Xstrata advanced despite reporting a 23% decline in profits in the first half of the year after it was hit by a drop in commodity prices as well as increasing costs.FTSE 250: Heritage up after restoration of listingHeritage Oil jumped after shares were restored to the official list after being suspended following the reverse takeover of an oil mining lease in Nigeria (OML 30) first announced on June 29th. The acquisition will be financed by a $550m secured bridge finance facility and a fully underwritten rights issue raising proceeds of up to $370m.House-builder Bellway fell after saying that its Chairman will retire next year and will be replaced by its CEO. The market reaction was negative in spite of the group saying that pre-tax profits will beat the current consensus estimate.Coal and coke producer New World Resources fell after saying that one of its miners in the Czech Republic died on site yesterday.FTSE 100 - RisersInterContinental Hotels Group (IHG) 1,705.00p +5.12%Glencore International (GLEN) 334.90p +1.84%Meggitt (MGGT) 402.80p +1.72%BP (BP.) 448.25p +1.64%Xstrata (XTA) 897.00p +1.59%Amec (AMEC) 1,156.00p +1.49%BG Group (BG.) 1,301.00p +1.40%Eurasian Natural Resources Corp. (ENRC) 408.60p +1.36%Petrofac Ltd. (PFC) 1,566.00p +1.36%ITV (ITV) 80.65p +1.26%FTSE 100 - FallersStandard Chartered (STAN) 1,186.00p -19.32%Legal & General Group (LGEN) 129.60p -1.44%HSBC Holdings (HSBA) 554.70p -1.00%Smith & Nephew (SN.) 673.00p -0.81%ICAP (IAP) 331.50p -0.72%Admiral Group (ADM) 1,152.00p -0.60%Royal Bank of Scotland Group (RBS) 227.50p -0.57%Rolls-Royce Holdings (RR.) 852.00p -0.47%Capita (CPI) 742.00p -0.40%Schroders (SDR) 1,359.00p -0.37%FTSE 250 - RisersHeritage Oil (HOIL) 138.00p +12.20%Ruspetro (RPO) 154.10p +2.73%Ted Baker (TED) 920.00p +2.22%Cairn Energy (CNE) 308.30p +1.75%Catlin Group Ltd. (CGL) 450.70p +1.67%Domino's Pizza Group (DOM) 527.50p +1.64%International Personal Finance (IPF) 307.30p +1.62%Homeserve (HSV) 222.20p +1.51%Telecity Group (TCY) 890.00p +1.42%Dunelm Group (DNLM) 593.00p +1.37%FTSE 250 - FallersBumi (BUMI) 369.80p -2.68%Phoenix Group Holdings (DI) (PHNX) 487.10p -2.54%Barr (A.G.) (BAG) 440.00p -2.53%Senior (SNR) 195.30p -2.15%Stobart Group Ltd. (STOB) 116.00p -2.03%New World Resources A Shares (NWR) 300.00p -1.80%Fenner (FENR) 379.40p -1.63%Greggs (GRG) 497.30p -1.52%Kenmare Resources (KMR) 38.25p -1.49%Brown (N.) Group (BWNG) 270.10p -1.42%BC