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London open: Stocks inch higher after recent sell-off

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UK markets opened slightly higher on Tuesday, although sentiment was still fragile as stocks rebounded from their worst levels in nearly six weeks.

The FTSE 100 was trading at 6,574 this morning, up 0.4% from Monday’s close of 6,550.66 – its worst closing price since 18 December.

“Markets may be subdued today following the recent sell-off and as investors take bets ahead of the all-important Federal Open Market Committee meeting tomorrow,” said Lee Mumford, Financial Sales Trader at Spreadex.

The Fed, which began scaling back its monthly asset purchases in December from $85bn to $75bn, will make another $10bn cut this month, according to the consensus forecast.

Ongoing volatility in emerging-market currencies has sparked a sell-off across global stock markets in recent days as investors scaled back risk appetite on concerns of the impact from a slowdown in China.

However, things have stabilised somewhat after Turkey’s central bank said it would hold an emergency monetary policy meeting later today in order to discuss recent developments and take necessary measures to halt the sharp slide in the lira.

Kathy Lien, Managing Director at BK Asset Management, said: “Their goal is to restore confidence in their currency and if they are effective, it will bolster risk appetite across the financial markets and drive USD/TRY and EUR/TRY lower.”

Market consensus expects a rate hike of 100-300 basis points, but Lien said: “There’s always the possibility of a more creative option – the larger the rate hike, the more support it will provide to the lira.”

F&C extends gains, RBS falls

Fund manager F&C Asset Management, which rocketed yesterday after a £708m offer from a division of Canada’s Bank of Montreal, was still making gains this morning after recommending the deal to shareholders. Chief Executive Officer Richard Wilson said that the offer “represents a unique opportunity to broaden and accelerate our ambitions”.

RBS was extending losses made yesterday after a surprise trading statement which detailed nearly £3bn of provisions for new claims. The stock was upgraded this morning by Investec from ‘sell’ to ‘hold’.

Oil and gas firm BG Group was also in the red again after sinking sharply yesterday on disappointing production guidance for 2014 and 2015. Analysts across the board trimmed their target prices for the stock this morning, with JPMorgan also downgrading the shares to ‘neutral’.

Precious metals producer Fresnillo was lower despite beating silver output targets in 2013 and hitting its forecasts for gold. Silver production in 2014, however, is expected to be flat.

Sector peer Randgold also fell, tracking the price of precious metals lower this morning.

Shares of flooring retailer Carpetright were down after it warned on profit for the second time in nearly four months as deteriorating trading in the Netherlands dragged on an improved UK performance.

FTSE 100 – Risers

Carnival (CCL) 2,562.00p +3.39%
Rio Tinto (RIO) 3,227.00p +2.77%
Hargreaves Lansdown (HL.) 1,465.00p +2.52%
Aberdeen Asset Management (ADN) 401.00p +2.48%
Anglo American (AAL) 1,351.00p +2.39%
Lloyds Banking Group (LLOY) 82.30p +2.36%
Amec (AMEC) 1,043.00p +2.25%
Royal Mail (RMG) 571.00p +2.15%
Persimmon (PSN) 1,274.00p +1.92%
GKN (GKN) 390.90p +1.90%

FTSE 100 – Fallers

ARM Holdings (ARM) 931.00p -2.77%
Randgold Resources Ltd. (RRS) 4,059.00p -2.36%
Intertek Group (ITRK) 2,841.00p -0.94%
Fresnillo (FRES) 769.00p -0.77%
Imperial Tobacco Group (IMT) 2,235.00p -0.75%
AstraZeneca (AZN) 3,830.00p -0.66%
National Grid (NG.) 779.50p -0.57%
Royal Dutch Shell ‘A’ (RDSA) 2,123.00p -0.54%
SABMiller (SAB) 2,863.50p -0.54%
G4S (GFS) 248.60p -0.52%

Source: ShareCast