London open: Stocks cautious ahead of German ZEW data

11th Dec 2012 08:33

The FTSE 100 index started Tuesday's session cautiously with just 12 points separating the intraday low and high in the opening hour as the focus remains fixed on Mario Monti and 'fiscal cliff' discussions in the US.However, with little significant economic data scheduled for today's session, all eyes will be on the German ZEW economic sentiment index which is expected to improve from -15.7 to -11.5 in December, according to consensus estimates.However, as market analyst Michael Hewson from CMC Markets explains, this forecast could be "a little on the optimistic side given last week's growth downgrades from the ECB as well as the Bundesbank".In other news, loan growth in China came in weaker than expected at 522.9bn yuan in November, missing the 550bn yuan estimate. Markets yesterday initially started the day on the back foot after the surprise early resignation of Italian Prime Minister Mario Monti, which sparked a surge in Italian bond yields. It is now thought that his departure would prompt an early election in February.However, optimism regarding 'fiscal cliff' talks Stateside between President Barack Obama and House Speaker John Boehner boosted buying in afternoon trade, helping London's benchmark index finish with moderate gains."European equities are trading little changed this morning, taking a breather after yesterday's impressive intra-day recovery after having successfully fended off resurfacing worries about political instability," said Markus Huber, the head of German HNW trading at ETX Capital. FTSE 100: Tullow drops on Spring acquisition, non-core disposalsOil titan Tullow was a heavy faller early on after announcing plans to buy Norwegian exploration group Spring Energy and dispose of its non-core gas assets in the North Sea. The gas assets, which currently produce around 18,000 boe per day, are said that have been "highly successful" for Tullow but given recent success in Africa (namely Ghana, Kenya and Uganda), these assets are now being classed as "non-core" and "no longer fit within Tullow's light oil-focused portfolio". Whitbread, which owns the Costa and Premier Inn chains, was a high riser after saying that it was still on track to meet full-year expectations despite a slight slowdown in group like-for-like sales in the third quarter.HSBC was lower after reaching an agreement with US authorities in relation to investigations regarding inadequate compliance with anti-money laundering and sanctions laws. HSBC will make payments totalling $1.921bn and take further action to strengthen its compliance policies and procedures. Johnnie Walker, Smirnoff and Guinness owner Diageo was in the red after saying that it has called off talks to buy tequila giant Jose Cuervo after being unable to "agree a transaction".FTSE 250: IG leads the fallersIG Group was out of favour after revealing a reduction in its revenue for the period June 1st to November 30th. Revenue in the period was £169m, 14% lower than the prior year. Revenue in the second quarter, at £87.5m, was 7% higher than the first quarter, although still 9% behind the prior year.Industrial coding, printing and marking technology group Domino Printing fell after reporting a decline in annual profit, as it battles against tough market conditions.Equipment rental group Ashtead gained as it unveiled strong first half-year results, revealing pre-tax profit had risen by 64% to £140.7m compared to £84.4m pounds in the corresponding period last year.FTSE 100 - RisersWhitbread (WTB) 2,502.00p +3.05%Johnson Matthey (JMAT) 2,497.00p +1.22%Rexam (REX) 453.80p +1.05%United Utilities Group (UU.) 692.50p +1.02%Pearson (PSON) 1,194.00p +1.02%Pennon Group (PNN) 613.00p +0.99%Polymetal International (POLY) 1,097.00p +0.92%Severn Trent (SVT) 1,568.00p +0.84%Compass Group (CPG) 741.00p +0.82%CRH (CRH) 1,166.00p +0.78%FTSE 100 - FallersTullow Oil (TLW) 1,192.00p -5.10%Eurasian Natural Resources Corp. (ENRC) 268.80p -2.68%Kazakhmys (KAZ) 737.50p -2.19%Diageo (DGE) 1,861.50p -1.33%Barclays (BARC) 247.25p -0.92%Lloyds Banking Group (LLOY) 46.44p -0.61%Burberry Group (BRBY) 1,308.00p -0.61%Wolseley (WOS) 2,834.00p -0.60%Standard Chartered (STAN) 1,488.50p -0.60%Antofagasta (ANTO) 1,350.00p -0.59%FTSE 250 - RisersRedrow (RDW) 162.60p +2.65%Ashtead Group (AHT) 400.10p +2.46%Imagination Technologies Group (IMG) 439.40p +2.35%Carpetright (CPR) 680.00p +2.03%Shanks Group (SKS) 77.90p +1.83%F&C Asset Management (FCAM) 97.90p +1.82%Premier Farnell (PFL) 185.40p +1.76%Salamander Energy (SMDR) 176.30p +1.73%African Barrick Gold (ABG) 416.90p +1.68%Dechra Pharmaceuticals (DPH) 608.50p +1.59%FTSE 250 - FallersDomino Printing Sciences (DNO) 586.50p -3.85%IG Group Holdings (IGG) 424.30p -2.86%Victrex (VCT) 1,604.00p -1.96%ITE Group (ITE) 228.00p -1.72%Stobart Group Ltd. (STOB) 97.00p -1.62%FirstGroup (FGP) 185.00p -1.60%Stagecoach Group (SGC) 300.60p -1.54%COLT Group SA (COLT) 96.05p -1.54%Bank of Georgia Holdings (BGEO) 1,011.00p -1.37%JD Sports Fashion (JD.) 725.00p -1.36%BC