Market overview: Footsie caught in downdraft from Wall Street


LONDON (ShareCast) - 1630:Close Shares ended slightly lower, caught in the downdraft from falls on Wall Street as investors reacted to the temporary budget agreement reached overnight. While a positive for the economy some observers are pointing out that it removes one of the last remaining obstacles to the Fed initiating the tapering of its 'quantitative easing' programme. easyJet gained after analysts at Goldman Sachs (NYSE: GS-PB - news) upgraded the stock to 'conviction buy.' BAE Systems (LSE: BA.L - news) benefited as traders breathed a sigh of relief at the prospect of a now lessened risk of cuts to Pentagon spending. RBS (LSE: RBS.L - news) dropped as its CFO departed the lender, after just 10 weeks in the post. The Spectator speculated on Wednesday that the latest RICS data on surveyors' projections for house prices might lead Carney to contemplate reigning in the Help to Buy Scheme as well. FTSE 100 down 16 to 6,508.

1545: Markets have slipped into the red as stocks Stateside continue to extend losses. Michael Hewson, Chief Market Analyst at CMC Markets, said that while on the face of it the budget deal is positive, 'it does remove one obstacle to an eventual start to a possible Fed taper next week, which could be another reason why stocks are finding it difficult to rally right now'. The FTSE 100 is down 6.85 points at 6,516.46.

1445: The FTSE 100 has pared earlier gains after a weak start on Wall Street as investors speculate on the impact that the budget deal will have on the Fed's policy decision next week. Imagination Tech is extending losses, trading down 19.8 per cent, after its gloomy guidance given alongside its first-half report. Investec (LSE: INVP.L - news) today cut its target price for the stock from 340p to 250p and kept a 'hold' rating, saying 'it is too early to be more positive on the longer-term outlook'. The FTSE 100 is up just 9.18 points at 6,532.49.

1302: The FT's Alphaville is commenting today on a notion that has apparently been doing the rounds in markets for some time and has apparently resurfaced this week. Namely, that management churn at Domino's Pizza could make them an attractive bid target for private equity outfits.

1300: In a speech delivered today at the NIESR MPC member Martin Weale has indicated that the policy framework of forward guidance has been successful at lowering uncertainty, but only in the near-term. Hence, the effect on the economy has almost certainly been very small.

1151: Oxford Instruments (LSE: OXIG.L - news) is higher after AIM-listed camera maker Andor Technology (LSE: AND.L - news) recommended its all cash 176m pound (525p per share) takeover offer to shareholders. Some observers had thought a rival bid could possibly emerge. FTSE 100 up 14 to 6,538.

1144: Shares of temporary power solutions provider Aggreko (LSE: AGK.L - news) are falling back towards technical support at 1,549p. A break below might see it move lower again, towards 1,429p.

1123: Shares of Whitbread (LSE: WTB.L - news) are pacing gains after Citi raised its target price from 3570p to 4000p while keeping its buy recommendation intact.

1025: Markets' faith in the pace of recovery in StanChart (HKSE: 2888-OL.HK - news) over the coming year took a hit from the lender's unexpectedly weak revenues for Financial Markets in quarter four. Yet Investec continues to believe the story of a strong Wholesale Bank-led re-acceleration in revenues remains intact. Hence they have decided to reiterate their buy recommendation, albeit while reducing their target price to 1,700p from 1,900p. The broker sees "no capital issue at all."

1008: Imagination's technical aspect has taken another hit after leaving behind another "bearish" gap at the open of trading. The company said it now expects partners, including Apple (NasdaqGS: AAPL - news) , to ship 580m to 630m units this fiscal year, compared to a previous forecast of about 650m units [chips].

0835: UK stocks have begun the session slightly higher despite Wall Street having slipped a tad overnight. Investors may be keying off of the budget deal announcement last night on Capitol Hill. RBS is leading falls on the Footsie after losing its finance director after 10 weeks on the job. Shares of Imagination are plunging out on the FTSE 250 following its latest interims. Monetary Policy Committee member Martin Weale is scheduled to speak at the NIESR at 13:00. FTSE 100 up 3 to 6,526.

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