London open: Markets look to the ECB for a boost

2nd Aug 2012 08:57

- Fed holds fire on further stimulus- BoE and ECB decisions expected later today- ECB expected to do 'whatever it takes'The Footsie rose moderately on Thursday morning in spite of the Federal Reserve disappointing US markets last night, as investors looked ahead to key policy decisions in the UK and Europe later on today.The Federal Reserve Open Market Committee yesterday decided to leave all its main policy settings unchanged, including most of the language employed in its post-meeting statement. While Fed Chairman Ben Bernanke noted that the recovery had lost momentum - leading to suggestions that more QE may be on the way - analyst Craig Erlam from Alpari said this morning: "Bernanke's comments appeared very similar to those of the previous meetings and with the Fed reaffirming their commitment to Operation Twist until the end of the year, I'd be surprised to see QE3 announced next month."Meanwhile, the Monetary Policy Committee (MPC) from the Bank of England (BoE) is due to make an announcement at midday and while the BoE hinted about a potential rate cut at the last meeting, it is widely expected to maintain the Bank Rate at 0.5% and its asset purchase programme at £375bn. "Although we expect the MPC to loosen policy further the current asset purchase plan is due to run until November, and we believe the MPC will wait until then before making any further changes," said analystsat Barclays Capital.However, the big event of the day will most likely be the European Central Bank's (ECB's) decision at lunchtime. Last week, ECB President Mario Draghi said that he was prepared to do do "whatever it takes to preserve the euro...and believe me, it will be big enough"."Today, ECB President Draghi will restate his commitment to intervening in the sovereign-debt market if needed. For the time being, however, the ECB will probably prefer other measures (involving EFSF money) being adopted," said analysts at UniCredit this morning in an e-mailed report.FTSE 100: Smith & Nephew on the up after ramping diviMedical devices specialist Smith & Nephew rose despite reporting a slight decline in second-quarter trading profit and revenue, as it whacked up its dividend, embarking on a progressive dividend policy on the back of the success of its recent restructuring.Asset manager Schroders also gained after reporting an increase in assets under management over the first half; however, profits slipped year-on-year.Heading the other way was temporary power and temperature control group Aggreko which said that underlying first-half revenues were affected by weakness in Europe, where growth is "patchy".Also lower was defence contractor BAE Systems which is suffering from reduced military spending in both the US and UK, while a crucial fighter jet deal with Saudi Arabia has been hit by delays. First-half sales were down 11%.RSA Insurance Group advanced after claiming a solid performance in a challenging environment in the first half of 2012, even though profits fell by more than a third.FTSE 250: SEGRO gains after first-half results, disposalIndustrial property group SEGRO rose strongly after saying that pre-tax profits gained 5.3% in the first half despite net rental income falling by 3.4%. The firm also reported today that it has completed the sale of a portfolio of 10 non-core UK industrial estates for £110m.Natural resources, land and property consultancy group RPS was in demand after revealing a slight increase in pre-tax profit during the second half and saying it remains on course to meet full year forecasts.Communications technology firm Spirent Communications tanked after it cautioned that overall growth in the second half may reduce to mid- to low-single digit increase amid ongoing macro-economic uncertainty.High-flying Ophir Energy disappointed the market, dropping 9%, as it revealed its gas discovery at the Papa-1 well off the coast of Tanzania is likely to contain lower recoverable resources than it had hoped for.FTSE 100 - RisersSmith & Nephew (SN.) 673.00p +2.05%Schroders (SDR) 1,311.00p +1.47%BP (BP.) 432.85p +1.12%Randgold Resources Ltd. (RRS) 5,740.00p +1.06%International Consolidated Airlines Group SA (CDI) (IAG) 164.10p +1.05%British American Tobacco (BATS) 3,468.50p +0.83%InterContinental Hotels Group (IHG) 1,595.00p +0.82%Diageo (DGE) 1,751.50p +0.81%Carnival (CCL) 2,194.00p +0.78%Standard Chartered (STAN) 1,529.00p +0.76%FTSE 100 - FallersAggreko (AGK) 2,061.00p -2.78%GKN (GKN) 206.80p -2.22%BAE Systems (BA.) 307.00p -1.73%Evraz (EVR) 234.70p -1.39%Vedanta Resources (VED) 958.50p -1.24%Anglo American (AAL) 1,897.50p -1.17%Eurasian Natural Resources Corp. (ENRC) 384.60p -1.08%IMI (IMI) 824.00p -1.08%Ashmore Group (ASHM) 327.40p -1.00%Lloyds Banking Group (LLOY) 30.40p -0.98%FTSE 250 - RisersSEGRO (SGRO) 237.50p +4.72%Ruspetro (RPO) 152.20p +3.26%RPS Group (RPS) 240.00p +1.95%NMC Health (NMC) 199.80p +1.94%FirstGroup (FGP) 234.50p +1.87%Interserve (IRV) 326.70p +1.87%TUI Travel (TT.) 186.50p +1.80%Stagecoach Group (SGC) 291.70p +1.78%Redrow (RDW) 128.20p +1.75%Phoenix Group Holdings (DI) (PHNX) 488.00p +1.60%FTSE 250 - FallersSpirent Communications (SPT) 140.10p -16.85%Ophir Energy (OPHR) 529.00p -9.18%Aquarius Platinum Ltd. (AQP) 35.12p -5.84%JD Sports Fashion (JD.) 670.00p -2.19%Man Group (EMG) 80.25p -2.13%Hunting (HTG) 773.00p -1.78%Fenner (FENR) 355.50p -1.66%Chemring Group (CHG) 288.60p -1.64%Petropavlovsk (POG) 414.20p -1.59%Beazley (BEZ) 154.80p -1.53%BC