FTSE 100 Watch: Footsie Edges Down Ahead of Bernanke Testimony

on Jul 16, 2013

iNVEZZ.com Tuesday July 16th: The Footsie was marginally lower by midday on Tuesday after volatile morning trading, in which the index first jumped by 0.28 percent to 6,605.04 and then retraced its gains and dropped by as much as 0.22 percent to 6,571.20. At 12.25 BST the FTSE 100 was down by 2.99 points or 0.05 percent at 6,583.12.

Investors are now focused on U.S. Federal Reserve chairman Ben Bernanke’s testimony to Congress on Wednesday and Thursday. Markets have been closely following the chairman’s public announcements, looking for clues on whether the Fed will trim or end its bond-buying programme.
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Weaker-than-expected UK inflation data released today boosted prospects of increased consumer spending while giving the Bank of England more leeway to keep stimulating the economy. The CPI climbed by 2.9 percent in June from 2.7 percent in May, below the three percent average forecast of analysts.
Financial stocks eased in the morning after several days of gains, with modest profit-taking on individual

stocks. **Lloyds Banking Group** shed 0.14 percent to 69.34p and **Standard Chartered** declined by 2.59 percent to 1,506.50p.
**Rio Tinto**, the first among Britain’s blue chip miners to update on second quarter trading, saw its shares rise by more than 3.30 percent to 2,899.25p. The company raised its guidance on full-year copper output and said it planned to proceed with expansion work, either on new or existing mines. “We expect Rio to see a significant increase in earnings through 2013-14 as its higher iron ore production capacity comes on line in the third quarter of 2013, Bingham Canyon ramps up to full capacity and Oyu Tolgoi begins to contribute to profits,” commented Societe Generale analysts. They also pointed out that the miner is losing about $600 million (₤398 million) per annum from its Pacific Aluminium operations, which means shutting them down should drive earnings up (Rio Tinto Share Price Jumps on Upbeat Output Data).

!m[Financial Stocks Drop, While Miners Gain](/uploads/story/4037/thumbs/pic1_inline.jpg)
Mining peers **Fresnillo** and **BHP Billiton** also advanced with the shares climbing by 4.58 percent and 1.80 percent to 1,002.38p and 1,840.00p, respectively.
**Kingfisher** was one of the top gainers on the Footsie following a series of positive broker notes ahead of a trading update next week. Today Deutsche Bank lifted its price target on the retailer’s shares from 325.00p to 360p, while Jefferies and Nomura moved their “buy” recommendations from reduce to neutral. “We expect the company to report solid trading for the 10 week period, including the strongest like for like at B&Q for over three years,” Deutsche Bank analysts said.
Other retailers declined with **Burberry** and **Marks & Spencer** among the fallers, down 1.6 percent and 0.9 percent to 1,512.00p and 465p, respectively.
**The FTSE 100 was 3.34 points or 0.05 percent lower at 6,582.77 as of 15.07.2013, 13.19 BST.**


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