13th Oct 2014 09:43
LONDON (Alliance News) - Miners have led a blue-chip recovery Monday after concerns about the eurozone economy saw the FTSE 100 index open lower.
The FTSE 100 touched a 15-month low in early trade at 6,294.64 but has recovered by mid-morning to trade flat at 6,341.82. The FTSE 250 trades 0.1% lower at 14,627.06. The AIM All-Share index is underperforming, trading down 0.8% at 703.49.
European equity markets also have recovered after opening lower, with the CAC 40 up 0.4% and the DAX up 0.5%.
The eurozone economy continued to worry investors, after ratings agency Standard & Poor's downgraded France's credit outlook to negative from stable.
"Ratings agencies are downgrading their outlook on France, Tuesday's German ZEW data is thought unlikely to inspire, the European Council is likely to reject the latest French budget, and Thursday?s eurozone inflation figures are a real cause for concern," says IG market analyst Alastair McCaig. "All of these factors together look sure to insure that the VIX fear index will remain high, in fact the situation is so gloomy that gold, the flight to security, appears to have woken from its slumber."
The VIX index is the Chicago Board Options Exchange Market Volatility Index, which measures the implied volatility of S&P 500 volatility options.
Miners are supporting the main UK indices, with the FTSE 350 mining sector index trading up 1.9%. The index has been been boosted in recent sessions by the price of gold, which has risen 0.4% in intraday trade Monday to USD1,227.71 per ounce. Anglo American trades up 3.1%, Rio Tinto 2.4% and Fresnillo 1.9%. Randgold Resources trades up 2.1%, after also having received an upgrade from UBS which said the company remains "the best managed and highest quality gold stock" in its European coverage universe.
Smith & Nephew is amongst the biggest fallers in the FTSE 100, with its shares declining 1.6%. The medical devices maker said a Phase III study in North America into developmental venous leg ulcer treatment HP802-247 failed to meet its primary endpoint, and there was no statistically significant improvement in healing compared with a placebo.
Meanwhile, Synergy Health's shares have risen 31%, making it by far the best performing stock in the FTSE 250, after the health services company after the health services company recommended a USD1.9 billion cash and shares takeover offer from US medical technology and hospital services company Steris Corp. In a statement, Steris said Synergy Health was recommending its GBP19.50 a share takeover offer, which would create a combined business with about USD2.6 million in annual revenue from over 60 countries and about 14,000 employees.
Futures indicate a lower opening for Wall Street, with the DJIA shown to open 0.1% lower, the S&P 500 0.2% lower and the Nasdaq Composite 0.3% lower.
By Neil Thakrar; [email protected]
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Related Shares:
Smith & NephewRandgold ResourcesFresnilloSYR.L