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European Indices mixed as trader s gauge Portuguese bond auction and Libya

Article By: ,  Financial Analyst
March 9, 2011 5:31 PM

European Indices were mixed on Wednesday with the FTSE 100 Index lower by 0.4%, after a number of companies went ex dividend, whilst theDAX posted gains of 0.3%.

The theme of the morning however has been traders maintaining an eye on the price of crude oil and the Portuguese bond auction. Traders continue to trade sensitively to any increase in the price of crude oil whilst the Portuguese bond auction is another opportunity for the market to gauge investor confidence in the indebted country.

The Portuguese bond auctioned passed through the morning session with equities reacting with little difference, though the risks were mostly weighted to the downside should the demand not have been as high as hoped, which was not the case.

We are still stuck in a trading range in the FTSE and broader European indices, something that is unlikely to change until investors are confident enough of no more spikes in the price of crude oil.

On the upside, shares in Rolls Royce were lifted 3% after the firm launched a joint bid with Daimler for engine make Tognum with investors bullish about CEO’s John Rose’s confidence that the deal could help drive top line growth.

Shares in Prudential led the FTSE 100 leader board, gaining 4.4%, after the insurer gave shareholders something to cheer about with their earnings beating market expectations and also hiked their dividend more than investors were expecting. The insurer has outperformed what the market had predicted on both accounts of profits and dividends and so naturally we have seen an increase in demand for the company’s shares today.

On the downside was British American Tobacco whose shares fell 3% largely on the back of its share price going ex dividend rather than any negative sentiment impacting share prices today.

Tullow Oil shares also traded into negative territory after the oil explorer missed profit forecasts. The firm reported a 361% jump in profits to $152m for last year but this fell drastically short of the market consensus of $192m. The company also left shareholders no closer to understanding when a resolution may come from the long running Ugandan tax dispute and approval for a new oil development in the country with Total and CNOOC.

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