FTSE in the red
The FTSE 100 Index was in the red today as possible Chinese lending curbs weighed on sentiment ahead of the latest round of US banking results.
London’s blue-chip stocks struggled for direction as investors’ moods were dampened by fears over limits on the fast-growing Asian economy.
The Footsie was 33.8 points lower at 5479.3 by midday, despite a 1% gain for Wall Street’s Dow Jones Industrial Average yesterday.
News of fresh restrictions on bank lending to prevent asset bubbles from Chinese regulators sent Asian markets lower with Hong Kong’s Hang Seng off 1.8% and Japan’s Nikkei down 0.3% overnight.
Dow Jones Industrial Average futures were slightly down ahead of the US open as investors awaited bank earnings from Morgan Stanley and Bank of America.
In UK economic news, minutes from the Bank of England’s January meeting revealed worries that inflation could spike higher than previously thought because of the impact of freezing weather and January’s VAT hike.
Bank policymakers voted unanimously to stand firm in emergency efforts to aid the economy two weeks ago, with interest rates held at 0.5% and its scheme to boost the money supply unchanged at £200bn (€229bn).
In London, it was a far slower session on the corporate front after yesterday’s recommended takeover of Dairy Milk firm Cadbury, which was 0.5p higher at 837p today.
David Jones, chief market strategist at IG Index, said: “While yesterday’s takeover of Cadbury by US food giant Kraft is still making waves in the media, the market seems to be holding off in case of further developments.”
Pharmaceuticals firms were among the days’ risers after a shock win for the Republican party in the Senate vote for the US state of Massachusetts put proposed healthcare reforms in question.
GlaxoSmithKline rose 11p at 1295.5p while AstraZeneca gained 28p to 3095.5p.
The leading Footsie riser was drugs company Shire, up 42p to 1271p or 3%, helped by an upgrade from analysts at JP Morgan.
Pubs group JD Wetherspoon declined 1.9p to 461.8p after January’s big freeze prevented drinkers from getting to its pubs and depressed like-for-like sales.
Imperial Tobacco was one of the big fallers, after the cigarette maker turned ex-dividend, meaning shareholders do not get the latest payout. Shares were off 73p at 1992p.
Comet owner Kesa Electricals was off 5.3p to 140.4p in the FTSE 250 amid worries over lower UK sales.
