FTSE 100	5529.9, +11.7	Dow	11346.5, -106.9
FTSE 250	9104.82, -2.44	Nasdaq	2315.63, -5.74
FTSE All Share	2812.59, +4.35	S&P 500	1278.4, -4.75
Nikkei	13481.4, -63	Hang Seng	22023.5, -18.8
Oil (Brent)	$139.89	Gold	$931.30
Base Rate	5%	10 Yr Gilt	5.05%
£/$	1.994	£/€	1.263

 

Markets

London - The Footsie closed 11.7 points ahead at 5529.9 on Friday, despite another wobbly start on Wall Street following a 3% fall for the Dow Jones Industrial Average in the previous session. US and UK markets suffered badly on Thursday on lingering inflation concerns and fears over the economic outlook amid rising commodity prices. Official figures on Friday also showed UK growth at 0.3% in the first quarter of 2008 - lower than first thought - renewing fears of a recession.

The Footsie’s energy stocks dominated the riser’s board on the soaring oil prices, led by prospector Tullow, which gained 49p to 975p, or 5%. Cairn Energy was 121p better at 3207p, BG Group cheered 53p to 1251p and Royal Dutch Shell was 27p better off at 1962p. Crude costs weighed on cruise ship operator Carnival, which fell almost 4% or 62p to 1579p, although fuel-hungry British Airways recovered earlier falls to finish 1.75p higher at 213p.

The chief Footsie faller was heating and plumbing giant Wolseley, down 16p to 388p, after a downgrade from ABN Amro which feared for the group’s prospects in a deteriorating UK market.

Banks saw differing fortunes in a mixed session. FTSE 250 lender Bradford & Bingley led the sector lower with shares down almost 21%, or 16.75p to 63.25p, after the Resolution-led team of investors pulled plans to launch an alternative fundraising bid for the group. HBOS spent much of the day trading below its 275p "discounted" rights issue price after investors overwhelmingly backed its £4bn fund-raising move on Thursday, but the shares rebounded later to close at 278.5p, 2.5p up. Barclays however was a faller, off 5.75p at 298p, or 2%.

Tesco and Sainsbury’s were also on the back foot amid reports of a new price war brewing in the sector. Sainsbury’s lost 6.25p to 308.75p, while Tesco - whose shareholders voted against a resolution from a TV chef calling for the retail giant to improve its chicken-rearing standards today - shed 4.2p to 360.5p. Fellow supermarket Morrisons was also a faller, down 5.75p at 262.5p.

Defence giant BAE Systems meanwhile was more than 2% ahead, or 9p to 427.5p, after the group announced that chief operating officer Ian King would be taking over from chief executive Mike Turner from September 1. Elsewhere coach, rail and bus group National Express rose nearly 3%, or 24.5p to 941.5p, despite the oil price hike as it gave a bullish outlook amid the switch to public transport.

New York - US stocks fell again on Friday with the Dow briefly reaching the technical level of a bear market, 20% below the autumn record highs. Investors were rattled again by a new record high for oil and more financial market woes. In economic news, the University of Michigan consumer sentiment survey hit a new 28 year low of 56.4 from the previous reading of 56.7. Analysts had predicted that the figure would remain unchanged.

The Dow Jones dropped 106.9 points to close at 11,346.5, the S&P 500 fell 4.75 points to end at 1,278.4. The Nasdaq lost 5.74 points to finish at 2,315.63.

Financial stocks caused the biggest drag on the S&P 500. Merrill Lynch closed 1% lower after Lehman Brothers predicted a $5.4 billion second quarter write down, citing its current exposure to bond insurers. JPMorgan Chase & Co slid 3.5% while Citigroup declined 2.4%

AIG slid 1.2% following reports published that suggested it would take a $5 billion quarterly loss from its insurance units. Bloomberg News suggested that the company would absorb the loss with sales of investments from a dozen insurance units hit by the sub prime meltdown.

US light crude oil for August delivery settled at $140.21 a barrel, having earlier hit an intra day high of $142.99.

COMEX gold for August delivery gained $16.20 to close at $931.30 an ounce.

Tokyo - The Nikkei dropped 63 points to close at 13,481.4 this morning. The index had been higher for much of the session, but fell after the stronger yen diminished the earnings outlook for makers of electronics and cars. Subaru car producer, Fuji Heavy Industries, led a decline by car makers. Sony Corp closed at its lowest level in two months.

Hong Kong - The Hang Seng is just 18.8 points lower at 22,023.5 this morning, but that would still be enough to leave the index at its worst first half drop for 14 years. Cnooc Ltd, China’s biggest offshore oil producer, advances in line with oil prices.

Economics

UK GfK consumer confidence (Jun) 00.01 bst

Consumer confidence is expected to deteriorate further on the back of higher oil prices, falling house prices and a worsening in employment prospects.

UK Mortgage approvals (May) 09.30 bst

The BBA data (which accounts for roughly 60 percent of the total UK mortgage issuance) fell sharply in May which suggests a further deterioration. As such, a further new low in mortgage approvals looks likely. Consumer credit is also expected to edge down.

US Chicago PMI (Jun) 14.45 bst)

The reading from the June Empire manufacturing and Philadelphia Fed surveys were soft, with weaker activity highlighted by declines in new orders and shipments. The Chicago PMI is expected to fall to 47, down from 49.1 in May. This would also be consistent with around 47 for the ISM manufacturing.

Corporate

Taylor Wimpey confirmed it is in talks with shareholders and other institutions about raising additional financing, which would most likely be via a placing and open offer. The company also said it expects around £550m in write downs in the UK.

In a statement Taylor Wimpey said it had agreed an amendment to the terms of the revolving credit facility with its banks, including the suspension of a covenant based on net interest in relation to EBITA, as it prepares to withstand what it sees as a "significant downturn" in the housing market.

Lonmin has closed down its No1 furnace for repairs which will take around a week, the company said today. They said in a statement "As we repair the furnace we will assess the impact of this incident on production and sales for the 2008 financial year".

Senior Plc said today adjusted pre-tax profit for the first six months of 2008 is now expected to be "comfortably ahead" of its previous expectations. The group said it had continued to trade strongly, with trading conditions better than expected during the second quarter.

Senior said cash generation had been "healthy", with net debt falling ahead of expectations during the second quarter from the £142m reported at the end of March.

The group also said its outlook remains "healthy", with aircraft build rates continuing to increase as a result of record order books. Energy markets remain strong and tightening emissions legislation is providing good opportunities for Senior’s products, the group said. Senior is scheduled to publish interim results on August 4.

ASOS shrugged off the consumer downturn, posting a steep rise in annual profit and a near doubling in first quarter sales as it benefits from the growing popularity of Internet shopping. The group said underlying profit surged 176 percent to £8.25m in the year to March 31 on a 90 percent increase in revenues to £81m. Sales in the 13 weeks to June 27 were up 95 percent, it added. The company said "Whilst it’s too soon to suggest that this performance will continue for the full year, we are confident that 2008/09 will be another strong year for ASOS".

Cable and Wireless said today it was in talks with Thus about a potential 180 pence a share offer for the company. C&W said a "put up or shut up" deadline of 1600gmt today, imposed by the UK Takeover Panel, remained in place. C&W must announce a firm intention to bid or walk away by the deadline.

Trinity Mirror said it expected full year operating profit to be about 10 percent below expectations as about 10 percent below expectations as advertising market conditions deteriorate. The company said that since its trading update in early May, "advertising market conditions have deteriorated reflecting the uncertain outlook for the UK economy with the ongoing adverse implications of inflationary cost pressures and the wider implications of the credit crunch".

Trinity Mirror said it had seen a market year on year decline in advertising revenues in May and June, and this was expected to continue for the rest of the year. Underlying group revenue fell by 7.8 percent in the nine weeks to June 29 or by 4.5 percent in the 26 weeks to June 29. Underlying advertising revenue fell by 12.6 percent in the nine week period and by 7.2 percent for the 26 weeks. The group added "Month on month volatility remains and this could worsen as we trade through a very uncertain economic outlook".

The above details are provided for information only and are not intended to be construed a solicitation for the sale or purchase of any particular investment nor as specific investment advice.

Posted: June 30th, 2008 under Asset Management.
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