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Hopes of ECB action help lower borrowing costs for Italy and Spain

Article By: ,  Financial Analyst
August 21, 2012 4:04 PM

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  • Hopes of ECB action to help lower borrowing costs for Italy and Spain have buoyed markets today, the FTSE and DAX are up half a percent at 5853 and 7071 and the CAC is up 0.8% at 3506.
  • Wall Street closed yesterday evening at 13271 so slightly down after its streak of positive closes.
  • Featuring quite a lot in the media at the moment miners are up today after the dust starts to settle on Lonmin’s strike-hit south African mine.
  • As a result, Kazakhmys, BHP Billiton, Rio Tinto and Lonmin have all showed gains of between 2-3% this morning.
  • Not doing so well in the commodity markets is Glencore, which is down 0.7% after it’s half year earnings report. Their report revealed its profits had taken a 26% hit from stubbornly poor commodity prices, although this still put them marginally ahead of expectations. Investors have been paying particular attention to Glencore since they announced in February that they would bid $30 million for the 66% stake in Xstrata they did not already own – a move that met resistance from Xtrata’s second largest stakeholder- Qatar Holdings who demanded a higher price. Glencore have stood ground on their stance, however, announced that it is not a “must-do” deal.
  • Changing sectors, home retail group are continuing their storming month today up 0.65% which means they’re up over 30% this month. This is after a string of favourable analyst’s reports and upgrades by banks.
  • Lastly today we’re looking at our Banks who’ve been rallying this morning. The fact that the bank with the lowest European exposure, HSBC, have experienced the most modest gains – 0.4% as opposed to Barclays 2.1% points towards this boost being on the back of the reduced borrowing costs being experienced across Europe mentioned earlier, looking for examples Irish nine-year bond returns are below 6% for the first time in two years and Spanish bond auctions from the past few minutes are also showing a reduction in yields.

See the City Index Economic Calendar and Companies Reporting Dates page for latest economic news and company events that are likely to impact the markets today.

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