💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

FTSE down, weak banks outpace commodity strength

Published 12/06/2010, 04:27 AM
Updated 12/06/2010, 04:32 AM
GC
-
PL
-

* FTSE down 0.2 percent

* Miners, energy stocks gains Bernanke hints at QE3

* Banks wane on euro zone debt worries

By David Brett

LONDON, Dec 6 (Reuters) - Britain's top shares were lower on Monday, as weakness in banks sparked by euro zone debt worries outpaced strength in commodities following weekend comments by Ben Bernanke, which boosted hopes of more quantitative easing.

By 0903 GMT, the FTSE 100 was down 13.11 points at 5,732.21, having ended down 0.4 percent at 5,745.32 on Friday after downbeat U.S. non farm payroll figures in the U.S..

Responding to the disappointing jobs data, U.S. Federal Reserve Chairman Ben Bernanke told the '60 minutes' television programme at the weekend that the central bank could end up buying more than the $600 billion in U.S. government bonds it has committed to purchase if the economy failed to respond or unemployment stayed too high.

"Bernanke's comments suggest that QE3 is a possibility," Richard Hunter, head of equities at Hargreaves Lansdown, said.

"We're still switching between risk on and risk off with investors itching to take profits as soon as the market gains some ground."

Global miner Xstrata rose 2.3 percent on newspaper reports Glencore, the world's biggest commodity trader which holds a stake of nearly 35 percent in Xstrata, is preparing for a 6.3 billion pound ($9.94 billion) London Stock Exchange debut as early as April next year.

Platinum processor Johnson Matthey added 0.9 percent as Goldman Sachs upgraded its rating to "buy" from "neutral", saying it is benefiting from higher platinum prices.

Anglo-Australian miner Rio Tinto was down 0.1 percent after it made a $3.5 billion bid approach for Africa-focused Riversdale Mining.

On the second line, British bank note printer De La Rue Plc soared 23 percent after confirming it had received a bid approach from an unnamed party.

French group Oberthur Technologies is the bidder, a source familiar with the matter told Reuters.

Pub owner Punch Taverns PLC rose 7.4 percent on Mail on Sunday reports of bid interest from private equity group CVC.

BANKS WOBBLE

Banks were lower after Moody's Investors Service cut Hungary's credit rating on Monday.

Investors will also keep an eye on a meeting of euro zone finance ministers who will face pressure to increase the size of a 750 billion euro ($1,006 billion) safety net for crisis-hit members in order to halt contagion in the single currency bloc.

Tesco slipped 2.3 percent after UBS cut its rating on the world's No.3 retailer to "neutral" from "buy".

Cobham fell 2.5 percent with traders citing a downgrade by BofA Merrill Lynch on the aerospace electronics group.

Back on the upside, Vodafone, up 0.9 percent, is close to selling its 44 percent stake in mobile phone operator SFR to France's Vivendi, paving the way for Vodafone to buy back 5 billion pounds in its own shares in 2011, a UK newspaper said on Sunday.

No important British data will be released on Monday. ($1=.6338 Pound) (Editing by Jon Loades-Carter)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.