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The Mid Session Wrap is a report on the biggest movers in the FTSE 100 and macroeconomic news that impacts movements in share prices. The report also previews macroeconomic data that is due to be released over the course of the session.
FTSE 100 climbs, Dow Jones and S&P 500 seen higher - UpdateMarch 26 2012, 3:03pm
UK stocks rose more than expected this morning as investor appetite for riskier assets was lifted by better than expected German business confidence data.
The FTSE 100 stood at 5,894 at midday, up 40 points (0.7 percent) from Friday’s close.
The Ifo institute said its German business climate index edged higher to 109.8 in March from 109.6 in February, making a fifth straight monthly gain, while expectations were for no change.
The data added to optimism that the euro zone’s largest economy and the leading contributor to financial aid packages for struggling European countries remains in good shape.
Equities received more support from a Financial Times article, which said Germany has agreed to allow an increase in Europe’s bailout funds to prevent debt contagion within the euro zone under strong pressure from fellow European states and the US.
Traders will now be looking to Friday’s meeting of euro zone finance ministers, which could results in an agreement to boost the monetary union’s rescue funds to as much as €940 billion.
“Since it appears that this boost to the bailout funds will only be temporary the markets’ reactions have been fairly muted,” said analyst at forex.com Kathleen Brooks.
The positive impact from the Ifo data and the FT report was partly offset by the disappointing outcome of Spanish regional elections. Technocrat Prime Minister Mariano Rajoy failed to secure a majority in Andalucía, which could complicate his government’s efforts to pass further austerity measures to keep the country’s debt problems under control.
Aberdeen Asset Management (LON:ADN, up 4pct at 260p) topped the FTSE 100 leaderboard after reporting an increase in assets under management, which stood at £184.4 billion at the end of February.
Shares in Tullow Oil (LON:TLW, up 4pct at 1,532p) also were in demand after the oil major announced that its Ngamia-1 exploration well in Kenya found oil.
Investors also bought gold producer Randgold Resources (LON:RRS, up 3.2pct at 5,830p), which fell sharply late last week amid reports of a coup in Mali, which accounts for 60 percent of its production.
Meanwhile, interdealer broker ICAP (LON:IAP, down 2.4pct at 407.9p) and insurance sector focused investor Resolution (LON:RSL, down 1.9pct ta 274.3p) slid to the bottom of the FTSE 100 pile.
Financial bookmakers are expecting US stocks to open higher today, tracking gains in European equity markets.
Futures for the Dow Jones Industrial Average (DJIA) rose 86 points (0.65 percent) and futures for the broader S&P 500 index advanced nine points (0.65 percent).
Traders in the US are waiting for today’s existing home sales data from the National Association of Realtors and the Dallas Fed manufacturing index for February.
Earlier today, the Chicago Fed manufacturing index for February came in at minus-0.09, down form a positive reading of 0.33 in January.
In the meantime, chairman of the Federal Reserve Ben Bernanke is set to deliver a speech to the National Association of Business Economics.
UK corporate news
Back in the UK, other news in the top flight included an update from pharmaceutical company AstraZeneca (LON:AZN, down 0.5pct at 2,831p).
The group has had a lawsuit against the Food and Drug Administration (FDA) to stop its approval of generic quetiapine drugs thrown out by a US court.
Astra is facing generic competitors for its SEROQUEL (quetiapine fumarate) tablets and SEROQUEL XR (quetiapine fumarate) extended release tablets, both of which are used in the treatment of bipolar disorders.
Elsewhere in the top flight, BG (LON:BG., up 1.8pct at 1,519p) announced that the highly anticipated Jodari-1 well offshore Tanzania showed a major gas discovery.
“Preliminary evaluation of the well results indicates gross recoverable resources are in the range of 2.5 to 4.4 trillion cubic feet (tcf) of gas,” the statement said.
It is the fourth well to be drilled by the pair offshore Tanzania. Jodari-1 is 60 per cent owned by BG and 40 per cent by midcap Ophir Energy (LON:OPHR, up 17.5pct at 472.4p).
In the FTSE 250, Easyjet (LON:EZJ, up 7.6pct at 496.6p) has reduced its pre-tax loss forecast as a result of better weather conditions and tight cost control. The budget airline also benefited from weaker competition in the market as some of its rivals were forced to go out of business.
Easyjet now expects to post losses of between £110 and £120 million for the six month period to end March compared with previous target of between £140 million to £160 million.
In the first half of the previous financial year, Easyjet’s losses reached £153 million.
Salamander Energy (LON:SMDR, down 0.5pct at 223.1p) has spudded the Tutung Alpha-3 in the Bontang production sharing contract (PSC) in Indinesia.
The TA-3 well will target Middle Miocene deltaic sandstones, which were found to be gas-and condensate-bearing in the Tutung-1 and Tutung Alpha-1 wells.
The Tutung discovery is a gas-condensate accumulation with a mean resource volume estimated at circa 60 billion cubic feet.
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