The UK’s first trading day of 2012 has so far seen it playing catch-up with the European boruses that were open yesterday. French and German markets rallied strongly on the back of strong German data and strong Chinese manufacturing figures. The FTSE 100 index was called to open up 90 points, and it did before slipping back 30 points after the first hour.
Banks and miners are the best performers, with Kazakhmys and Rio Tinto both up over 4%. Traders are still exerting caution into 2012 with the adage “new year, old problems”. FxPro says there are grounds for some optimism, but for the most part they are few and far between. “The US economy has been very resilient over recent months – last week witnessed further improvements in home sales and also consumer confidence. Also, the labor market has firmed after a dreadful lull in the middle of 2011. However, it pays not to lose sight of the balance sheet picture, for the US and beyond,” says FxPro.
A survey of boardrooms across the UK has revealed that more than 50% of finance directors now expect a double-dip recession in the UK – driven by a growing concern of the dire effect any break-up of the euro would have on the UK.
Confidence among the owners of smaller companies has also collapsed, according to the monthly Lloyds Bank business barometer. The bank’s survey suggested individual companies’ prospects had eroded in December, with those based in the Midlands and Wales particularly nervous. Lloyds estimated that companies now believe there is 75% chance of a recession.
Oil giant BP has asked its contractor Halliburton to pay for all costs and damages that arose from the oil spill in the Gulf of Mexico.The claims were made in a filing by BP’s lawyer Don Haycraft in a US Federal court.
BP and Halliburton are locked in a legal battle with a trial expected this year to settle damages claims. The offshore spill was the worst in US history, while a blast at the Deepwater Horizon oil rig killed 11 workers.The so-called “Deepwater incident”, which happened at BP’s Macondo well in the Gulf of Mexico, is expected to cost the company tens of billions of dollars. BP has spent $14bn (£9bn) so far in its spill response and cleanup operation and has set aside a further $20bn for damages claims.
