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A positive finish for the FTSE following a session of fiscal cliff nerves

Article By: ,  Senior Market Analyst
November 28, 2012 5:10 PM

European markets traded lower for much of Wednesday, as investors replaced the previous session’s optimism following the Greek deal with concerns over the terms and whether in fact it would be enough to prevent a weakening of the Eurozone crisis.

However, the biggest trading cue was taken from across the pond to a growing nervousness over whether US lawmakers were putting the world’s largest economy at risk by failing to make progress in the fiscal cliff talks. The markets continued to fall throughout the session disappointed that negotiations had not moved forward.

Late afternoon sentiment changed as US House Speaker John Boehner said that he was optimistic that a deal can be reached to avert the fiscal cliff. In response the markets rapidly reversed and took to positive territory, with the FTSE closing up three points.

Notable movers on the FTSE included United Utilities who finished the day at the top of the FTSE leader board up 2.7%. The rise came after the company reported decent strong gains and announced that first half revenue rose from £793m to £823m. Underlying pre tax profit came in £190m up 3% year on year and above the expected £188m.

Marks and Spencer’s also jumped up over 2% after announcing a substantial reduction in its deficit from £1.3bn in March 2009 to £290 million as of 31st March 2012. ARM Holding also performed well after it was reported that Intel could make a bid for the company at 1200p some 55% higher than where it is currently trading.

On the negative side, as is expected during days of uncertainty, banks and miners suffered at the hands of investors as they looked to take risk off the table. Rio Tinto, Eurasian Natural Resources and Lloyds all shed between 1.5 – 2.2%.

Domestic and European economic data was in short supply today, so investors paid particular attention to US new homes sales figures which came in weaker than expected falling by 0.3% putting extra pressure on the markets. This evening the US Federal Reserve releases the Beige Book economic survey.

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