NGnooncall:Equity markets fairly quiet on slow day for data

24th Jan 2011 13:40

UKUK markets have traded fairly quietly today with the banking sector leading the fallers after the report at the weekend by Sir John Vickers, chairman of the Independent Commission on Banking, said the financial crisis had exposed a "damagingly rickety structure" at the heart of the financial system. He said the cost of bank failures "should not be borne by the taxpayer providing a generous safety net". One option, Vickers said, was to ring-fence customers' savings and loans away from high-risk investment banking operations.RBS and Lloyds have been the main decliners.International Consolidated Airlines, the newly formed British Airways-Iberia entity, is up on its first day.Standard Chartered has agreed to buy Singapore-based car and personal loans business GE Money for an undisclosed sum. Though no financial details have been disclosed, talk is that GE will get as much as S$900m (£439m) for the unit.Data search software giant Autonomy has announced its seventh and eighth contract wins of 2011. The company has entered into a "significant agreement" with Euronews, a leading international news channel in Europe, and with an unnamed US hedge fund. Outsource giant Serco has played down weekend reports it wants to buy US homeland security firm SRA International. The UK firm says it is "not in any discussions regarding any major transaction at this time," though it did not say whether it had been in discussions prior to the announcement. Stories at the weekend suggested Serco had made an offer worth $2bn for SRA and had been mulling a £500m rights issue to help pay for the deal. John Lovering is to step down as chairman of Mitchells and Butlers and quit the board later this year. The pubs group is searching for a successor to Lovering whose stint in the chair has been short but action packed. Irish foods group Greencore may be prepared to improve its offer for biscuits and pizza group Northern Foods after the agreed merger between the two was scuppered by Indian firm Boparan's £342m offer late Friday. Elsewhere in food, Premier Foods is higher, though off its earlier highs, after announcing that it has sold its vegetarian foods business to a private equity consortium for £205m as it seeks to reduce its debt burden. Premier, whose most famous brands include Hovis bread and Sharwood's cooking sauces, sold the division to Exponent Private Equity, whose current portfolio includes the bed retailer Dreams and the rail ticket website thetrainline.com.USUS markets look set to open slightly higher after a fairly lacklustre European session, ahead of key earnings announcements from Dow constituents McDonalds and American Express. Expectations for McDonalds were for $1.16c a share for the 4th quarter and figures came in pretty much in line with those forecasts. This week half the Dow constituents with half the Dow constituents expected to report this week and no economic data of note out of the US today, expect trading to remain fairly light ahead of the State of the Union address tomorrow and Wednesday's FOMC announcement.FXDespite brief move to 1.3640 in early Asia trading the euro has started to slip back a little and could well slip back towards the break out level around 1.3410 in the short term. Comments by ECB chief Trichet about the likelihood of a rate hike because of increased inflation risks in the near future have also tempered gains. Political instability in Ireland after the governments fall has added an element of uncertainty and is a reminder of the tail risks within Europe, but doesn't materially alter the countries access to the bailout fund and we could see the euro trade sideways for a little.The pound has weakened a little away from the key 1.6000 level but has trod water against the euro despite Euro zone and German PMI data coming in slightly ahead of expectations.CommoditiesIn commodity markets cocoa prices have jumped higher after the export ban announced at the weekend by the Ivory Coast, above 3300, however they still remain short of the highs of 3510 seen in 2009. West Texas crude prices have traded with a slightly lower bias after comments from the Saudi oil minister that suggested that oil prices would remain around broadly similar levels as the last 12 months. Brent crude, on the other hand has remained remarkably resilient with the spread between the two contracts widening it their widest levels since early 2009.Gold has remained slightly soft struggling to maintain earlier gains above $1,350.This material is for general information only. Please read the important disclaimer by copying and pasting the URL: http://www.cmcmarkets.co.uk/legal/marketing-disclaimer