London open: Stocks fall as ECB gets ready to defend bond-buying plan

11th Jun 2013 08:36

Markets opened firmly in the red on Tuesday morning as traders awaited a courtroom battle in which the European Central Bank (ECB) is expected to defend its bond-buying programme.The two-day hearing into the legality of the ECB's Outright Monetary Transactions programme begins today in the German constitutional court. The programme has been largely credited for stopping the downward spiral in Eurozone government bond markets and putting the breaks on the crisis. However, plaintiffs argue that the ECB is acting outside European laws that prohibit government financing via the central bank. In fact, the German constitutional court's euro expert Udo di Fabio has warned that the two days of hearings could set events in motion that may eventually force Germany's withdrawal from the single currency. Bonds yields edged higher across the board in Europe this morning. Overnight, there were no surprises at the Bank of Japan's (BoJ) monetary policy meeting with the central bank leaving its aggressive easing plan in place. Following on from yesterday's upwards revision to first-quarter economic growth, the BoJ said that the economy "has been picking up".FTSE 100: Miners provide a drag early onMining stocks were providing a drag on the top-tier index this morning as metals prices edged lower. Fresnillo, EVRAZ, BHP Billiton, Randgold and Anglo American were among the worst performers.Lloyds was also out of favour after The Times said that contractors at the bank's PPI complaint handling unit were "taught how to play the system to the detriment of clients". Part-nationalised peer RBS was also down early on.Engineering and project management group AMEC gained on the news that it is to work with BP to provide the oil giant with environmental consulting services across its projects worldwide. However, energy services firm Wood Group fell after signing its first 'life-of-field' contract through an extension of work in the North Sea for AIM-listed Ithaca Energy worth $200m (£140m). FTSE 250: Dialights tanks after profit warningLighting, signalling and electronics group Dialight dropped sharply early on after saying that first-half profits would be adversely affected by weaker sales in the Signal segment and additional costs from the planned extra sales in the Lighting segment. Nevertheless, the company reassured that full-year results would be broadly in line with forecasts.Transport firm FirstGroup was a high riser after Investec upgraded the stock from 'hold' to 'add'. The broker said: "FirstGroup will shortly put its balance sheet issue to bed (for now) and, whilst the final outcome of the rights issue will not be known for another two weeks, investors should at long last begin to focus on the recovery story (especially in Student and UK Bus), instead of fretting about the group's finances."Office provider Workspace advanced after revealing a 58% surge in annual pre-tax profit and saying it is ideally positioned to take advantage of the strength of the London economy. AG Barr and Britvic were both in the red despite the Competition Commission provisionally clearing their proposed merger, as the Chairman of Britvic said that the company is now in a "different place" to last summer when they first agreed to a tie-up. He hinted that the terms may have to be renegotiated once the watchdog presents its final report next month. FTSE 100 - RisersARM Holdings (ARM) 886.00p +1.96%Tullow Oil (TLW) 1,028.00p +1.58%Rolls-Royce Holdings (RR.) 1,196.00p +1.27%easyJet (EZJ) 1,235.00p +0.73%Royal Dutch Shell 'B' (RDSB) 2,205.50p +0.55%Amec (AMEC) 1,007.00p +0.50%Royal Dutch Shell 'A' (RDSA) 2,126.00p +0.43%United Utilities Group (UU.) 737.50p +0.41%Marks & Spencer Group (MKS) 452.60p +0.27%Vodafone Group (VOD) 192.20p +0.23%FTSE 100 - FallersGlencore Xstrata (GLEN) 305.90p -2.67%Evraz (EVR) 121.30p -2.65%Anglo American (AAL) 1,384.00p -2.64%Fresnillo (FRES) 1,089.00p -2.59%Antofagasta (ANTO) 892.00p -2.09%Randgold Resources Ltd. (RRS) 4,922.00p -2.05%Old Mutual (OML) 188.20p -2.03%Prudential (PRU) 1,074.00p -2.01%BHP Billiton (BLT) 1,773.00p -1.88%SABMiller (SAB) 3,163.00p -1.79%FTSE 250 - RisersFirstGroup (FGP) 107.00p +6.87%Ocado Group (OCDO) 325.40p +4.29%Keller Group (KLR) 942.00p +3.97%New World Resources A Shares (NWR) 101.90p +2.93%Bovis Homes Group (BVS) 780.50p +2.23%Alent (ALNT) 362.60p +2.14%BH Global Ltd. USD Shares (BHGU) 11.99 +2.04%Playtech (PTEC) 677.50p +1.88%CSR (CSR) 531.50p +1.53%Beazley (BEZ) 225.60p +1.39%FTSE 250 - FallersDialight (DIA) 1,153.00p -13.83%Oxford Instruments (OXIG) 1,448.00p -7.59%ICAP (IAP) 358.90p -3.83%Man Group (EMG) 89.80p -3.28%Henderson Group (HGG) 149.20p -2.86%Hiscox Ltd (HSX) 521.00p -2.53%Genesis Emerging Markets Fund Ltd. (GSS) 521.50p -2.52%Halfords Group (HFD) 311.50p -2.17%Mondi (MNDI) 794.00p -2.04%Petropavlovsk (POG) 135.20p -2.03%