Shares Spread Betting: Lloyds Plunges as CEO Steps Down
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For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 2 November 2011: 11.00am Update
The FTSE 100 fought hard to hold on to the 5400 level this morning, as yesterday’s Greek woes faded slightly, while traders looked to this evening’s Fed meeting for guidance on US monetary policy.
By 10.45am (London time), the FTSE 100 was down 0.35% at 5402.40, with the leading index continuing its struggle around this level. 5400 is close to the top of the range in which the FTSE 100 traded during September, so this could be an important level for traders. The FTSE 250 was down just 8 points at 10,159.61.
Europe worries ease
After yesterday’s Greece-inspired ructions, spread betting markets have calmed somewhat, although they have been unable to hold onto the gains made early in the session. A number of FTSE 100 stocks have gone ex-dividend this morning, including BP, Shell, GlaxoSmithKline and Intertek, and this knocked around thirteen points off the index.
For the moment, the situation in Europe is quiet. Greece’s cabinet endured a punishing seven-hour marathon yesterday, during which all members agreed to a national referendum for Greece. Mr Papandreou now travels to France to meet with Angela Merkel and Nicolas Sarkozy, in what is likely to be an entertaining meeting.
Both Paris and Berlin said that they had been surprised (and not in a good way) by the referendum news, so it is likely that Mr Papandreou will get a stern dressing down for endangering the latest agreement, albeit in the most diplomatic way possible.
Lloyds faces leadership change
Lloyds was the biggest faller in the banking sector, on news that the still-new chief executive, Antonio Horta-Osorio, is stepping down temporarily. Reports suggest that Mr Horta-Osorio has taken a leave of absence as a result of overwork, having immersed himself fully in the running of the part-nationalised bank and the disposal of 600 branches.
The fall in the share price, which is down 4.3% to 29.25p, may be due to news that finance director Tim Tookey is to act as interim chief executive. Doubts persist about whether Mr Tookey can successfully oversee the sale of part of the branch network, and there are also worries that Mr Horta-Osorio may not return at any time.
Also down today was Standard Chartered, which fell 3% to 1396p following a downgrade from Evolution Securities, which cut its rating to ‘neutral’, with a target price of 1800p. Barclays and RBS also dropped, with HSBC being the sole riser among the big five, up 0.23% to 533.6p.
New stores help Next sales growth
Next managed to lift third-quarter sales by 3.3%, giving the retail sector a boost this morning, although 3.4% of growth was attributable to new stores. This therefore suggests that like-for-like sales were actually down 0.1%.
Once again, the online arm outstripped the high street division, with 16.9% sales growth compared to a drop of 3.3%. Sales growth of 2.5% to 4% is forecast for the full year, with pre-tax profit in the range of £550-585 million. Next shares rose 3.7% to 2652p, up 35% on the year, while Burberry and JD Sports were up 3%.
US pre-market
US futures have moved between gains and losses during the morning, with Dow futures currently down 0.02% and those for the S&P 500 up 0.27%.
It’s non-farm payrolls week, and the lead-up begins with ADP employment data today at 12.15pm (London time). The Federal Reserve’s committee announces its latest monetary policy decision at 7pm (London time).
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
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Spread Betting 2 November 2011: 6.00am Update
Global markets extended their losses overnight on renewed concerns over the European crisis.
News that Greek Prime Minister George Papandreou announced a referendum to approve a second EU bailout deal for the country rattled spread betting investors.
Should the referendum be defeated, all the work put in by European leaders to save the region would have been undone. It could lead to a disorderly default in Greece and bank failures across Europe.
Among the major averages, the Dow Jones Industrial Average shed 2.5% to end at 11658. The S&P slumped 2.8% to close at 1218, while the Nasdaq declined 2.9% to close at 2607. The losses in Europe were even worse as the CAC and DAX dropped over 5% each.
The market paid little attention to a gauge of US manufacturing in October, which fell to 50.8 from 51.6 in September.
Asia & Australia
Across Asia, regional markets are weaker with banks and autos sharply lower, after Greece’s recent call for a confidence vote and referendum raised doubts about the European solution.
Markets are off their lows, however, on speculation that even if the referendum were to take place, Greece would back it.
The Nikkei is down 1.8%, the Hang Seng is 1.2% weaker and the Shanghai Composite is down 1%.
Australia's S&P/ASX 200 index is down 0.6% at 4207 after hitting a one-week low of 4147.9 after off-shore markets reacted to Greek Prime Minister Mr Papandreou's call for a referendum on the EU bailout.
The indices spread betting market has recovered strongly from the lows, with the miners leading the recovery. Newcrest Mining is up 2% and Fortescue Metals has climbed 1.3%. Woolworths is flat after an investor briefing.
Financials are weakest, with Westpac down 1.7%, underperforming its peers after unsurprising fiscal 2011 results, while industrials and consumer discretionary stocks are lower. OneSteel is down by 15% after saying H1 profit could fall 70% on weak iron ore prices and a strong Australian dollar.
Europe
Turning to the European session, we are expecting a stronger open after the comeback in Asian markets. Traders will be on the lookout for construction PMI numbers in the UK and any updates regarding the proposed referendum in Greece.
In light of the recovery in the Asian region, we are calling the FTSE up 30 points at 5451, the DAX up 49 points at 5883 and the CAC up 33 points at 3101.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
Advert:
IG Index Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see IG Index.
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"Shares Spread Betting: Lloyds Plunges as CEO Steps Down" last update by AG, 02-Nov-2011
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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