21st Jan 2014 10:50
LONDON (Alliance News) - UK stock indices are moving sideways for the second consecutive day Tuesday, despite Unilever providing a boost to Food Producers.
Meanwhile, conflicting results from the German and eurozone ZEW surveys is causing some volatility in the euro, while global investors await the reopening of US markets following a holiday on Monday.
By mid-morning Tuesday the FTSE 100 is up 0.1% at 6,840.25, the FTSE 250 is down 0.1% at 16,215.65, and the AIM All-Share is down 0.2% at 880.95.
The German ZEW survey of economic sentiment has disappointed - recording 61.7 in January, down slightly from 62.0 in December and missing economists expectations of an improved reading to 64.0. However, the German assessment of the current economic situation, which is generally seen as less significant, climbed 8.8 points to 41.2, its highest mark since May 2012.
Shortly after the German release, the same survey covering the whole eurozone recorded a rise in January to 73.3, from 68.3 in December, beating expectations of 70.2.
The conflicting result from the main economic focus of the morning produced some volatility in the euro. The single currency dropped about 20 cents against the dollar on release of the German number, only to recover after the release of the eurozone number. The euro now trades just slightly lower against the dollar at USD1.3535. Against the pound the euro is also slightly lower, at GBP0.8230. The pound against the dollar trades fairly flat at USD1.6445.
Major European equity markets are performing marginally better than the UK market. The CAC40 and the DAX are both up about 0.4%.
"A slight miss from German ZEW investor confidence was largely ignored, with Germany one of the better performers in the block for the morning session", said CMC Markets senior trader Toby Morris.
The value of mortgages disbursed by UK banks remained broadly stable in December from the previous month, figures released by the Council for Mortgage Lenders (CML) revealed Tuesday. The total value of mortgage lending was GBP17 billion in December, which was largely unchanged from the the November figure. Compared to December 2012, however, the value surged 49% - this year's figure being the highest recorded for the month of December since 2007.
Within UK equities, the household goods sector, which includes housebuilders, is outperforming the market following the mortgage numbers. The FTSE 350 sector is up 0.9%. However the best performing stocks so far Tuesday are Food Producers, the sector up 2.8%, led by Unilever.
A rebound in emerging market sales boosted Unilever's full-year results, with 4.3% sales growth, beating analyst expectations. The stock is up 3.6%, leading the gainers on the FTSE 100. Other food producers are also gaining, with Associated British Foods up 2.3% and Greencore up 2.1%. Jefferies initiated analyst coverage on Greencore with a Buy rating Tuesday, saying the stock was attractively valued at a 22% discount to the sector.
With the impact of the morning ZEW surveys having quickly faded, the focus shifts to the return of US markets after the Martin Luther King Day holiday. "All eyes will be on the U.S open now, to see if we can build up enough momentum to this morning?s tentative gains to see the FTSE target those all-time peaks," says CMC's Morris.
Still to come Tuesday, the UK CBI Industrial Trends Survey. There are no headline releases due from the US.
By Jon Darby; [email protected]; @jondarby100
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