| Closing Prices | Intraday % | |||
| FTSE 100 | 5723.00 | -0.5 | GPB/USD | 1.5638 |
| FTSE 250 | 10748.39 | 0.11 | GBP/EUR | 1.1953 |
| Dow Jones | 12758.85 | 0.66 | Brent Crude | $110.6 |
| S+P 500 | 1326.06 | 0.87 | Gold | $1659 |
| Nikkei | 8883.69 | 1.12 | Silver | $32.06 |
UK stocks finished firmly in the red after worse-than-expected UK gross domestic product (GDP) figures sent banks reeling early on. Meanwhile, markets in the US were mixed ahead of the Federal Open Market Committee statement and press conference with the Federal Reserve Chairman Ben Bernanke.
The UK economy contracted at a 0.2% quarterly rate in the fourth quarter, according to the latest data out this morning from the Office for National Statistics. Consensus estimates were looking for a fall of 0.1%. "While these figures reveal significant weakness in the economy, we do not think they mark the start of an inexorable slide into a severe recession," said Barclays Capital analyst Blerina Uruci.
In other news, the decision taken by the members of the Bank of England’s Monetary Policy Committee to maintain the current policy settings at the last meeting was a unanimous one, the central bank revealed; while gross mortgage lending totalled £9bn in December, the strongest month of 2011 and 12% higher than the December 2010, according to the British Bankers' Association, as mortgage approvals rose more than expected.
In Eurozone news, the IMF is putting the pressure on the European Central Bank to also take a haircut on its own €40bn worth of Greek bond holdings, according to the Financial Times. The ECB bought up these sovereign bonds below par value as part of the programme to save Greece from collapse back in 2010 and has also accepted them as collateral as a means of propping up the country’s banks. According to the paper, these bonds currently carry a yield in excess of 7% and the pressure is on the European monetary authority to forgo profits in order to ease Greece’s debt loads.
Elsewhere, the German Treasury defined its latest debt auction held yesterday morning as "impressive" after yields fell to a record low for 30-year securities. The German Treasury sold €2.46bn in 30-year debt on bids for more than €5bn. The average yield offered from this security fell to 2.62%, down from 2.82% the previous auction. Meanwhile, Germany's business climate indicator for January beat expectations to register a reading of 108.3 points compared to 107.3 in December, according to the German IFO Instutite located in Munich.
Banking heavyweights Lloyds, HSBC and Standard Chartered were among the worst performers, dragging the Footsie down after gross domestic product figures came in worse than expected. Meanwhile, HSBC has today offloaded its Thai Retail Banking and Wealth Management business to Bank of Ayudhya Public Company Ltd for $115m, as it continues to dispose of its non-core businesses overseas.
Investment manager Ashmore was the best performer, rising over 5%, bouncing back after a poor performance yesterday on the back of a downgrade from Royal Bank of Scotland. Today, however, the stock was given a boost after Barclays upgraded it to overweight from neutral.
Commodities producer and marketer Glencore was a heavy faller after UBS cut its earnings forecasts to reflect what it believes is a challenging environment for its Marketing divisions and lower expected volumes and higher costs in Industrial. Nevertheless the broker maintained its buy rating and said that Glencore looks like the “most dynamic company in EU mining over the next three years”.
ARM Holdings, the chip designer for many Apple products, leapt 4% after Apple's quarterly figures showed robust demand for its trendy iPhones, iPads and Macs. Net income rose to $13.1bn in the first quarter of the company's fiscal year, more than double the $6bn achieved in the first quarter of the previous year. Putting the cherry on the top, Apple also raised earnings guidance for its second quarter.
Industrial engineer Weir was heading north after agreeing to acquire US oil and gas pump valve maker Novatech for $176m (£113m) in cash. Weir is looking to further strengthen its presence in the US unconventional oil and gas markets following the recent $675m acquisition of wellhead solutions provider Seaboard Holdings which was completed in December. Sector peer IMI was also in demand.
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