Daily Market Report: 6th January 2011

Daily Market Report: 6th January 2011

Britain’s blu-chip share index closed lower yesterday on growing fears that Eurozone countries and banks could struggle to tap markets this year. The FTSE 100 dropped 44.19 points to close at 5,624.26, in tandem with most European indices and the euro currency, after a French debt auction, failed to allay fears about the debt crisis on the continent.

The euro slumped to its lowest level against the dollar since September 2010 on tensions ahead of Spanish and Italian auctions next week. Fears about European banks ability to raise fresh capital, most notable UniCredit, which slumped for a second day after announcing a massive discount on a rights issue on Wednesday.

” The euro is really not helping at the moment; every time it tries to rally, it’s getting a slap, and that is really putting a dampener on equities,” said David Morrison, market strategist at GFT Global.

Falling FTSE 100 index constituents outnumbered risers by about four-to-one. Foremost among the minority of stocks on the rise was mining titan Eurasian Natural Resources Corporation (ENRC), which leapt on news it has settled a dispute with Canadian mining firm First Quantum over assets in the Democratic Republic of Congo.

At the other end of the scale, inter-dealer broker ICAP was one of the heaviest fallers after a trading update from sector peer Tullett Prebon in which it disclosed a chunky exceptional charge for restructuring.

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News that Tullett Prebon has axed 80 jobs hit ICAP harder than it did Tullet Prebon, as it was deemed symptomatic of hard times for money brokers.

Chip-designer ARM was wanted after UBS postulated that the Cambridge-based technology firm may beat market expectations by up to 6% with its fourth quarter revenues.

Builders’ merchant CRH took a bath, however, after Credit Suisse downgraded the stock to “under-perform” from “neutral”.

Oilfield services firms Petrofac and Schlumberger are to combine forces on a number of production projects in the emerging and growing production services and production enhancement market. The companies will team-up to bid for large projects that would prove too big for either company to handle on their own.

‘Imperial Leather’ soap maker PZ Cussons is to extend its consumer products range with the acquisition of the Fudge hair care brand from Australia’s Sabre Group. PZ Cussons is paying £25.5m in cash for the brand and associated inventory.

In a deal worth up to £750m, Balfour Beatty will continue maintenance and upgrade work on the UK electricity transmission network for National Grid.

Two days after it announced a contract to work on the M6 motorway Carillion is on the road again, this time in Canada, where it has won a highway maintenance contract. The 12-year contract is worth in excess of £100m.

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Despite the contract wins, both stocks finished the day lower.

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