London open: Stocks flat as US debt ceiling fears resurface

15th Jan 2013 08:28

Concerns about the US debt ceiling and the German economy were weighing on market sentiment on Tuesday morning, with the FTSE 100 trading broadly flat in the opening hour.President Barack Obama said last night that he would not negotiate with Republicans over raising the debt ceiling, declining to trade cuts in government spending in exchange for increasing the borrowing limit."If the goal is to make sure that we are being responsible about our debt and our deficit - if that's the conversation we're having, I'm happy to have that conversation," Obama said. "What I will not do is to have that negotiation with a gun at the head of the American people," he told a news conference. Treasury Secretary Timothy Geithner has said that the debt ceiling will be reached between mid-February and early March.In other news, Germany reported slightly worse-than-expected growth figures for 2012 as the Eurozone crisis continues to dent demand for its exports. Berlin said this morning that the country grew 0.7% last year, below the 0.8% consensus estimate and far below the 3.0% reading from 2011.Traders were shrugging off some upbeat comments from Bank of Japan Governor Masaaki Shirakawa who said that the central bank would pursue "powerful monetary easing" to boost the economy.Meanwhile, Federal Reserve Chairman Ben Bernanke last night downplayed fears that its asset purchase programme would lead to higher inflation. FTSE 100: Burberry surges after Q3 trading updateLuxury brand Burberry made impressive gains early on after saying that total revenue rose 9% to £613m in the third quarter. Retail revenue, which makes up the bulk of sales, rose 13% to £464m on an underlying basis, driven by customers choosing the more expensive items and by a strong performance in outerwear. However, wholesale revenue fell by 5% to £120m on an underlying basis in the third quarter. Bank of America Merrill Lynch upgraded its view on the firm to 'buy' this morning and raised its target price from 1,260p to 1,470p.Diversified mining giant Rio Tinto rose after managing to surpass its own iron ore production targets in 2012, while its other commodity classes also delivered large increases year-on-year.Sector peer Anglo American was also in demand after launching a restructuring and cost savings programme for its South African platinum operations as it emerged that the division would record a big loss for 2012 after being hit by strikes and falling prices. The group said that up to 14,000 jobs could be affected by the shake-up. Capital Shopping Centres managed to shrug off a downgrade by Espirito Santo to 'sell'. The company unveiled plans this morning to invest £25m in a rebrand and digital proposition.Heading the other way was chip designed ARM Holdings after Investec downgraded its rating for the stock to 'sell' and Morgan Stanley cut the shares to 'equal weight'.FTSE 250: Ocado jumps after 70% sales riseOnline grocery store Ocado was a high rise after seeing a sharp rise in sales over the festive season, with purchases of Ocado own-label products and non-food items increasing 70% in the six trading weeks to January 6th.Bike and car parts retailer Halfords was also making gains after a strong performance at its autocentres helped to lift total sale by 1.5% in the 15 weeks to January 11th.Spreadbetting firm IG Group was in the red after reporting "satisfactory" interim results with a 21% fall in profits.Imagination Technologies, the chip company, was higher after saying that it has signed a further license agreement with semiconductor firm MediaTek for wireless communications and digital multimedia solutions.FTSE 100 - RisersBurberry Group (BRBY) 1,386.00p +4.60%Eurasian Natural Resources Corp. (ENRC) 343.90p +2.96%Johnson Matthey (JMAT) 2,300.00p +2.54%ITV (ITV) 114.50p +2.51%Pearson (PSON) 1,199.00p +1.44%WPP (WPP) 955.50p +1.11%Rio Tinto (RIO) 3,510.00p +1.05%Antofagasta (ANTO) 1,309.00p +0.93%Kazakhmys (KAZ) 792.00p +0.83%Associated British Foods (ABF) 1,512.00p +0.80%FTSE 100 - FallersARM Holdings (ARM) 835.00p -4.35%BT Group (BT.A) 239.30p -1.64%International Consolidated Airlines Group SA (CDI) (IAG) 207.20p -1.52%G4S (GFS) 266.90p -1.26%Royal Bank of Scotland Group (RBS) 359.90p -1.26%Polymetal International (POLY) 1,125.00p -0.97%Standard Life (SL.) 349.30p -0.96%Severn Trent (SVT) 1,537.00p -0.84%BP (BP.) 455.55p -0.82%Centrica (CNA) 330.20p -0.81%FTSE 250 - RisersOcado Group (OCDO) 88.15p +4.82%Lonmin (LMI) 347.40p +4.45%Fidessa Group (FDSA) 1,569.00p +2.48%Petra Diamonds Ltd.(DI) (PDL) 117.20p +2.36%Kenmare Resources (KMR) 35.12p +2.27%Raven Russia Ltd (RUS) 66.25p +1.92%Alent (ALNT) 335.10p +1.85%ITE Group (ITE) 254.40p +1.84%Howden Joinery Group (HWDN) 173.30p +1.70%Diploma (DPLM) 554.00p +1.65%FTSE 250 - FallersIG Group Holdings (IGG) 444.80p -4.92%JD Sports Fashion (JD.) 686.00p -4.72%Victrex (VCT) 1,545.00p -2.89%Elementis (ELM) 220.80p -2.30%Heritage Oil (HOIL) 195.50p -1.76%Dixons Retail (DXNS) 27.55p -1.54%Big Yellow Group (BYG) 363.40p -1.17%Perform Group (PER) 385.60p -1.13%Dialight (DIA) 1,105.00p -1.07%Millennium & Copthorne Hotels (MLC) 530.50p -1.03%BC