27th Sep 2013 16:24
LONDON (Alliance News) - London's major stock indices closed mixed Friday as US budget discussions are set to go to the wire.
With just three days to go before next Tuesday's budget deadline, the US Senate's vote on its spending bill in a bid to prevent a government shut-down is imminent. However, both Democrats and Republicans refuse to alter their stance.
If an agreement cannot be reached, US fourth quarter economic growth could be hit by up to 1.4%, depending on the length of time of the shut-down.
Congress must also negotiate the US debt ceiling. Failure to increase the limit may lead to the US Government's credit rating being downgraded.
As investors moved away from riskier equities, the price of gold gained. At the close of the UK stock markets, the yellow metal was up 1.2% at USD1339.01 per ounce.
Alongside this, at the close of the UK equities markets, the dollar is losing ground against its major competitors. It currently trades at 1.3534 against the euro, 1.6132 against the pound, and 98.290 against the yen.
The FTSE 100 closed down 0.8% at 6,512.66, the FTSE 250 closed down 0.6% at 14,924.88, but the AIM All-Share index closed up 0.5% at 796.72.
This sentiment was echoed by the weekly change, with small-caps again outperforming stocks on the blue-chip index. The FTSE 100 was down 1.3% from last Friday's close, The FTSE 250 was down 0.7%, whilst the AIM index was up 0.3%.
In an attempt to allay fears of a house-price boom, UK Chancellor of the Exchequer, George Osborne, has afforded the Bank of England and increased input into the government's contentious Help-to-Buy scheme. The Central Bank will now review the programme annually, as opposed to three-yearly. The bank will also be able to limit the number of home buyers gaining from the scheme, by recommending that the government lowers the current GBP600,000 cap.
The move has hit house-building companies, with the sector closing 1.4% down.
At an individual stock level, Persimmon, down 4.4% at 1,060.3379 pence, closed as the biggest faller on the blue-chip index. On the FTSE 250, Taylor Wimpey, closing down 2.4% at 98.521p, Bellway, closing down 3.6% at 1,255p, Bovis Homes Group, closing down 3% at 709.93p, and Barratt Developments, closing down 3.1% at 302.1p, made up a large portion of the biggest losers.
Phorm Corporation closed up 83% at 5.5p. The AIM-listed technology company jumped after it reported strong growth in revenue and its other key performance indicators in a trading update Friday. The company announced that it had 3.6 million monthly opted-in users, and 1.2 users active on a daily basis, a 100% increase from numbers in June. Similarly, the company said that it had an average of 40 million advertising requests, up from 30 million in June.
Having made strong gains Thursday, Wall Street is firmly down at the close of UK equities markets. The Nasdaq is down 0.1%, the S&P is down 0.5%, and the DJIA is down 0.6%.
Monday's data calendar sees Chinese manufacturing PMI data at 0245 BST. UK mortgage approval and net lending to individuals figures are scheduled at 0930 BST. EU and Italian CPI data is released at 1000 BST. Later in the day is Chicago PMI is called at 1445 BST.
By James Kemp; [email protected]
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