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FTSE 100: This morning’s risers and fallers

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After an initial dip at the start of trading, following the release of weaker than expected data on German economic growth, London equities have now moved back into the blue.

Germany’s gross domestic product (GDP) contracted by two tenths of a percentage point during the second quarter, instead of by 0.1%, as economists had expected. In parallel, France’s economy stagnated over the three months to the end of June, prompting the country’s Finance Minister to cut the growth target for this year to just 0.5%, from 1% beforehand, in effect tossing out this year’s deficit reduction goal.

“Overall, the numbers reinforce our view that the Eurozone economy remains too weak either to tackle the periphery’s debt problems or to eliminate the dangers of deflation. As such, we still believe that the ECB needs to implement further policy action – probably in the form of full-scale quantitative easing – to try to bring the euro down and re-ignite the recovery,” Capital Economics’ Jonathan Loynes wrote to clients in reaction to the data.

Acting as a backdrop, the main US equity averages ended Wednesday’s session with moderate gains. The Dow Jones Industrials ended the day 0.55% higher at 16,652 and the S&P 500 up by 0.69% to 1,947.

To take note of, the Russian convoy of humanitarian aid which has been making its way to Ukraine over the last few days is expected to reach the Ukrainian border in the next few hours. Kiev has indicated that it will allow the vehicles to enter the country if it is first allowed to inspect the contents and then distribute the aid themselves.

In UK data, The Royal Institution of Chartered Surveyors (RICS) latest survey data revealed the largest slowdown in the number of inquiries from home buyers in the capital in six years.

Not by chance, and following Wednesday’s quarterly Inflation Report, economists at Societe Generale now see the first increase in Bank Rate arriving in the first quarter of 2015, instead of in the last three months of 2014.

Reacting to those changes in the immediate outlook for monetary policy in Britain cable is flirting with its so-called 200-day moving average, which may herald further falls if lost.

Carillion and Ophir Energy lead advance

TUI Travel led gains in the early going. Speaking to Bloomberg TV majority shareholder TUI AG’s chief executive said there is “no plan B” when it comes to a merger between both companies.

Shares of commodity trader Glencore are trading near the bottom of the pile on the Footsie after broker Credit Suisse downgraded the stock to ‘neutral’. Its analysts see the company facing three headwinds: fading commodity momentum, lower than expected earnings growth and valuation concerns given the premium at which the shares trade relative to peers.

Construction group Carillion on Thursday piled pressure on rival Balfour Beatty to resume merger talks by revealing that it had held meetings with several of Balfour’s major shareholders. The firm said it had told the investors that the merger could save at least £175m a year by the end of 2016, enhancing earnings “significantly” from then.

Ophir Energy swung to a half-year profit as the oil and gas company sold assets in Tanzania. The group reported a pre-tax profit from continuing operating operations of $589,436 in the six months to end of June 2014, compared to a loss of $19,374 for the same period a year earlier.

FTSE 100 – Risers
TUI Travel (TT.) 368.90p +1.93%
British Land Co (BLND) 718.50p +1.63%
Land Securities Group (LAND) 1,079.00p +1.22%
Coca-Cola HBC AG (CDI) (CCH) 1,339.00p +0.83%
Johnson Matthey (JMAT) 3,038.00p +0.80%
Prudential (PRU) 1,415.00p +0.78%
Whitbread (WTB) 4,235.00p +0.64%
Hammerson (HMSO) 602.50p +0.58%
Shire Plc (SHP) 4,826.00p +0.54%
HSBC Holdings (HSBA) 641.70p +0.53%

FTSE 100 – Fallers
Rio Tinto (RIO) 3,360.50p -1.84%
Glencore (GLEN) 360.10p -1.48%
G4S (GFS) 270.00p -1.28%
Friends Life Group Limited (FLG) 309.00p -0.99%
BHP Billiton (BLT) 2,023.50p -0.78%
Anglo American (AAL) 1,564.50p -0.76%
Antofagasta (ANTO) 803.00p -0.74%
Intertek Group (ITRK) 2,802.00p -0.71%
Barratt Developments (BDEV) 348.60p -0.63%
St James’s Place (STJ) 729.00p -0.61%

Source: ShareCast

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