London open: Stocks flat as earnings season kicks off

14th Jan 2013 08:34

London's benchmark index opened more or less flat in early trading on Monday ahead of the official start of corporate earnings season in the US."Attention remains on corporate earnings this week; in particular the banks, with Goldman Sachs and JP Morgan among others due to report. With earnings expectations so low for the fourth quarter, it's difficult to see how the banks can disappoint. Earnings estimates have already dropped significantly in the past couple of weeks, which surely leaves any surprises firmly to the upside" said market analyst Craig Erlam from Alpari."This again raises questions over the sustainability of the recent stock market rally. Over the past few earnings seasons, the bar has been lowered so much to accommodate the rally that all we're doing is creating a huge bubble that is ready to blow. When this happens is likely to depend on how long we have until the next Eurozone issue rears its ugly head."Providing some support for stocks this morning were comments from Federal Reserve Bank of Chicago President Charles Evans, who said that the government should put "in place policies that slowly but surely bring the prospects of future revenues into balance with future spending". He said that "monetary policy has an important contribution to make".To be had in account, investors are also expectant ahead of a speech by US Federal Reserve President, Ben S.Bernanke, tonight. ENRC and G4S boosted by broker upgradesMining giantENRC was leading the risers early on after Credit Suisse upgraded the stock from 'neutral' to 'outperform' and hiked its target price from 350p to 400p. The broker said that its previous cautious stance in the second half of 2012 was due to concerns over earnings, balance sheet and M&A. "We think downside risks are now limited with potential re-rating catalysts in 2013."Security solutions group G4S was also making gains after Credit Suisse also raised its recommendation from 'neutral' to 'outperform' and lifted its target price from 275p to 330p. "The current price does not reflect the organic growth potential, driven by New Markets, of the group, its ability to add value via acquisitions nor its improving prospects within the UK market," the broker said.Chip designer ARM Holdings was out of favour early on after The Wall Street Journal reported that tech giant Apple has cut its orders for components for the iPhone 5 due to weaker-than-expected demand. ARM designs chips for Apple gadgets.Real estate investment trust Hammerson was flat after saying that Chairman John Nelson will retire in the spring and will be succeeded by Sainsbury's Chairman David Tyler.Pubs group Greene King was slightly lower despite seeing record Christmas Day trading which underpinned growth in like-for-like sales.Drinks peers AG Barr and Britvic were higher after saying that they will have to wait until at least February to see if their merger will get the thumbs up from the regulator as the Office for Fair Trading (OFT) continues to probe the deal.FTSE 100 - RisersPetrofac Ltd. (PFC) 1,712.00p +2.03%Lloyds Banking Group (LLOY) 54.96p +1.70%Schroders (SDR) 1,843.00p +1.32%Royal Bank of Scotland Group (RBS) 365.00p +1.28%G4S (GFS) 271.10p +1.27%Old Mutual (OML) 187.20p +1.08%Vedanta Resources (VED) 1,222.00p +0.99%Eurasian Natural Resources Corp. (ENRC) 325.20p +0.81%Capital Shopping Centres Group (CSCG) 368.40p +0.66%International Consolidated Airlines Group SA (CDI) (IAG) 208.90p +0.63%FTSE 100 - FallersSage Group (SGE) 308.30p -1.69%BG Group (BG.) 1,043.50p -0.95%Wood Group (John) (WG.) 794.00p -0.87%Associated British Foods (ABF) 1,518.00p -0.78%Randgold Resources Ltd. (RRS) 5,855.00p -0.76%Kazakhmys (KAZ) 802.50p -0.74%Polymetal International (POLY) 1,150.00p -0.69%Aggreko (AGK) 1,768.00p -0.67%InterContinental Hotels Group (IHG) 1,763.00p -0.62%Rexam (REX) 457.10p -0.59%FTSE 250 - RisersJD Sports Fashion (JD.) 721.66p +6.05%Supergroup (SGP) 607.00p +4.66%Centamin (DI) (CEY) 58.25p +4.39%ITE Group (ITE) 249.50p +3.53%Cranswick (CWK) 894.50p +3.29%Fidessa Group (FDSA) 1,613.00p +3.00%Daejan Holdings (DJAN) 3,110.00p +2.81%Raven Russia Ltd (RUS) 66.50p +2.23%Carpetright (CPR) 686.50p +2.08%Menzies(John) (MNZS) 644.50p +1.82%FTSE 250 - FallersImagination Technologies Group (IMG) 445.70p -4.13%New World Resources A Shares (NWR) 310.10p -2.27%Big Yellow Group (BYG) 365.00p -1.72%Fenner (FENR) 404.00p -1.70%Bank of Georgia Holdings (BGEO) 1,177.00p -1.51%FirstGroup (FGP) 192.20p -1.49%National Express Group (NEX) 214.30p -1.43%Spirent Communications (SPT) 153.90p -1.35%Man Group (EMG) 91.60p -1.29%Workspace Group (WKP) 308.30p -1.19%BC