FTSE 100	4187, -7.91	Dow	8163.6, -161.27
FTSE 250	7318.51, -1.84	Nasdaq	1746.17, -41.23
FTSE All Share	2140.62, -3.72	S&P 500	881.03, -17.69
Nikkei	9420.75, -277.04	Hang Seng	17734.62, -127.65
Oil (Crude)	$62.93	Gold	$929.10
Base Rate	0.5%	10 Yr Gilt	3.61%
£/$	1.61	£/€	1.159
1 month LIBOR	0.655	3 month LIBOR	1.2

 

Markets

London - The FTSE 100 is currently 15.01 points lower at 4,171.99. Tullow Oil is one of the biggest fallers after its trading update showed that first half production was lower than expected. Petrofac falls in sympathy, down 2.5%. 3i Group follows, losing 1.8%, after reporting quarterly figures. British Land is also among the biggest losers after going ex-dividend, sending shares 1.7% lower. Miners fill the risers board, with Rio Tinto gaining almost 2%, Randgold Resources adding 1.4% and Antofagasta (which benefited from an upgrade to Hold from Sell) climbs 1.1%. Reed Elsevier rises 0.4% following reports to say that it is set to sell part of Reed Business Information amid poor trading conditions.

New York - US stocks dropped yesterday as investors continued to fear the market has got ahead of any economic recovery. The fears were backed up by comments from a member of the Obama administration’s economic advisory panel. They warned that the US should plan to provide a second bout of stimulus funds to prop up the economy, should it need it. US stocks now sit at their lowest level for 10 weeks.

The Dow Jones lost 161.27 points to close at 8,163.60 while the S&P 500 fell 17.69 points to end at 881.03. The Nasdaq dropped 41.23 points to finish at 1,746.17.

Losses were broad based with 25 of the 30 Dow components ending in negative territory. 3M led the industrial sector lower, down 3.2%, as cyclical stocks were hit. Energy companies also weighed heavily after US light crude oil for August delivery dropped $1.12 to $62.93 a barrel. Exxon Mobil lost 2.3% while Chevron Corp declined 2.25%, wiping a total of 22.5 points off the index.

One of the few risers was Alcoa, who unofficially kicks off the earnings season after the close today. The aluminium producer is expected to post a third consecutive quarterly loss, but still managed a gain of 1.6%.

COMEX gold for August delivery slipped $4.80 to $929.10 an ounce. Treasury prices gained, lowering the yield on the 10 year note to 3.46% from 3.51%.

Tokyo - The Nikkei slumped 227.04 points to close at 9,420.75 this morning. Honda Motor Co lost 5.5% after Japan’s currency climbed to a six week high versus the dollar. Mitsubishi UFJ Financial fell 3.4% as the nation’s bank lending growth slowed for a sixth month.

Hong Kong - The Hang Seng is currently 127.65 points lower at 17,734.62. Lower oil and metal prices have dragged on commodity related stocks. Chinese property and banking shares also decline on concern the government will restrict lending for real estate development.

Economics

US Consumer credit (May) 20:00 BST/ 15:00 EDT

Consumer credit has fallen for six of the past seven months, resulting in an average monthly drop of USD14bn since February. Credit card debt has declined for seven straight months, down by a combined USD46bn since September. Given that auto sales and ex-autos consumer spending have started to show some signs of stabilising, analysts expect to see a smaller drop of USD5bn for May consumer credit.

Corporate

Carillion said it expected to deliver improved half year earnings, driven by growth in support services, public sector projects and at its Middle East unit. Carillion said margins were improving and that it was benefiting from integration cost savings following last year’s acquisition of Alfred McAlpine. It expects to save £35m annually in 2009 and £50m in 2010. The company said net borrowing at the half year would fall to around £150m from £226.7m at the end of 2008. Carillion said its Middle East construction services business would increase 2009 revenues to around £600m from £464m in 2008 at margins of around 6 percent due to its strong order book in the region.

Booker posted a 7.8 percent increase in underlying first quarter sales, stronger than it anticipated less then two months ago, and said profit was in line with its expectations. Booker said total sales in the 12 weeks to June 19 also rose 7.8 percent. At its annual results in May, Booker said it did not expect underlying first quarter sales growth would be as strong as the 6.4 percent increase it saw in its fourth quarter. Non tobacco sales rose 10.4 percent on a like for like basis in the first quarter, while like for like tobacco sales were up 3.9 percent. The company said "Profits and net debt remain in line with management expectations".

Tullow Oil said today its first half revenue is expected to fall 23 percent mainly due to lower prices. Total revenue for the first half is expected to drop to about £290m from £378m in the first half of 2008. The company said "The reduction is due to lower sales volumes and most significantly the reduction in realised commodity prices during the first half of 2009".
Group working interest production for the first half averaged 59,000 barrels of oil equivalent per day, 16 percent lower than the first half of 2008. Group working interest production for 2009 is expected to average 58,000 boepd. The company said "The forecast has been impacted by mixed results from infill wells in the UK, partly offset by higher production in Africa". The company said its Jubilee Phase 1 development in Ghana remains on track for first oil in the second half of 2010. It said the Tweneboa-1 well made a significant discovery, extending the Jubilee play westwards.

3i Group said today it had halved its net dent in the first quarter, helped by a heavily discounted rights issue and the proceeds of 3i QPE. The group said its net debt had reduced to £961m at June 30 from £1.91bn at March 31. CE Michael Queen said "Our focus in the first quarter was on strengthening the balance sheet. A substantial increase in liquidity and the reduction in net debt provide further resilience in what remains a fragile environment". It said it would continue to take a cautious approach in new investment. Proceeds from realisations of investments were £163m, exceeding new investment by £87m in the quarter.

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Posted: July 8th, 2009 under Asset Management.
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