Concerns over Portugal’s banking sector sparked a sell-off across global indices on Thursday, with bond yields in peripheral Eurozone nations surging on fears of possible contagion across the single-currency region.

A scaling back of risk appetite saw the FTSE 100 in London fall to 6,672.37 by the close yesterday, its lowest finish since April 17th.

This morning, a spell of bargain hunting after the recent selling pressure helped the index rise around 15 points to 6,687 early on this morning.

“I suppose the question on investors’ minds is whether this latest Portugal banking crisis will lead to contagion in the region. Judging by the reaction in the single currency, then possibly the market doesn’t quite feel this is the case,” said Analyst Stan Shamu from IG in Melbourne.

While equities were sold off on Thursday across Europe and the US, the euro-dollar remained relatively stable, slipping slightly but still above 1.3600.

“Perhaps the action in equities was more a fact of investors protecting profits in an environment of record low volatility and equities at a record.”

M&A lights up tobacco stocks

Shares in Imperial Tobacco rose strongly after the company confirmed it is discussions with US rivals Reynolds American and Lorillard about the potential acquisition of some of their assets and brands. The potential transaction is reportedly being discussed as part of a larger transaction that could see Reynolds acquire Lorillard.

The potential deal also gave UK-listed peer British American Tobacco (BAT) a boost today, given that it owns a 42% stake in Reynolds. There had been speculation earlier in the week that BAT could move to buy up the rest of Reynolds after a standstill agreement expires at the end of the month.

Housebuilding and construction-related stocks were performing well with Ashtead, Persimmon, Barratt Developments and Berkeley putting in decent gains.

Heading the other way were the miners with Randgold, Fresnillo, Antofagasta, Glencore and Anglo American all trading in the red early on.

Bottling firm Coca-Cola HBC was a high riser this morning after analysts at Goldman Sachs upgraded their rating on the stock to ‘buy’. Meanwhile, Dairy Crest was lower after Societe Generale cut its stance on the diary food products group to ‘sell’.

FTSE 100 – Risers
Imperial Tobacco Group (IMT) 2,762.00p +3.87%
Coca-Cola HBC AG (CDI) (CCH) 1,351.00p +2.97%
easyJet (EZJ) 1,303.00p +2.44%
International Consolidated Airlines Group SA (CDI) (IAG) 339.20p +2.26%
ITV (ITV) 176.40p +1.55%
Ashtead Group (AHT) 891.00p +1.42%
CRH (CRH) 1,510.00p +1.41%
Schroders (SDR) 2,521.00p +1.29%
Marks & Spencer Group (MKS) 428.30p +1.25%
British American Tobacco (BATS) 3,563.50p +1.21%

FTSE 100 – Fallers
Randgold Resources Ltd. (RRS) 5,080.00p -2.96%
Fresnillo (FRES) 924.00p -2.22%
Anglo American (AAL) 1,476.50p -0.87%
Antofagasta (ANTO) 807.00p -0.62%
Glencore (GLEN) 340.60p -0.61%
Petrofac Ltd. (PFC) 1,159.00p -0.60%
BHP Billiton (BLT) 1,941.50p -0.51%
Sainsbury (J) (SBRY) 313.50p -0.44%
Tullow Oil (TLW) 786.50p -0.44%
Land Securities Group (LAND) 1,021.00p -0.39%

Source: ShareCast