MID SESSION MARKET WRAP

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.

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Boeing's Dreamliner nightmare continues

January 16 2013, 4:30pm
All Nippon Airways and Japan Airlines have taken their entire fleet of Dreamliners out of operation today on safety concerns.

Investors hoping that the late rally enjoyed in the US yesterday would be resumed today have been disappointed.

The World Bank downgrading global growth forecasts has been a wet blanket and provided a ready excuse for US traders to bank some profits.

The Dow Jones industrial average is down 35 (-0.26%) at 13,500 while the broader-based S&P 500 is off 2 (-0.13%) at 1,470. In contrast, the tech heavy NASDAQ Composite is up 4 (+0.13%) at 3,115 as the Apple share price recovers from its recent pulping.

Aircraft maker Boeing, like many of its Dreamliners, is grounded. All Nippon Airways and Japan Airlines have taken their entire fleet of Dreamliners out of operation today on safety concerns.

The Dreamliner was supposed to be the flagship Boeing aircraft but has been beset by difficulties, not least the three-year delay to its launch.

Banking results season is upon us. JPMorgan reported a slight decline in full year revenue to US$97bn from $97.2bn last year. Fourth quarter net income was up 53% year-on-year and ahead of analysts’ estimates.

Bank of New York Mellon saw earnings per share advance to 53 cents from 42 cents the year before, a cent below the consensus forecast.

In the UK, profit-takers have the top-share index in a head-lock, but it is loosening. The Footsie is back above 6,100, having fallen as low as 6,076; at 6,107, it is still down 10 points on the day.

Footsie’s rally has been helped by Thomson holidays group TUI Travel (LON:TT.) confirming that major stake holder TUI AG has approached it to talk about a full merger of the two companies.

Lloyds Banking (LON:LLOY) is a drag on the index, however, slipping 2.6% in the wake of a downgrade from Australian broker Macquarie Capital.

In other broker news, mobile phoned giant Vodafone (LON:VOD) slid 1.9% on the back of a Deutsche Bank downgrade to ‘hold’, but alcoholic drinks heavyweight Diageo (LON:DGE) shrugs off a downgrade from Société Générale and rises 0.2%.

Forbidden Technologies (LON:FBT) enchanted investors on AIM, up 15% on the back of the success of its video editing platform during the Olympics.

Chief executive officer Stephen Streater told Proactive Investors today that having NBC using its technology for the biggest sporting event in the world made a lot of other sports broadcasters sit up and take notice.

Widespread use of the technology during the Games boosted Forbidden’s revenues in 2012, while sales growth exceeded the 50% predicted by analysts by “a respectable margin”.

Surpassing even Forbidden Technologies’’ eye-catching gain are Silence Therapeutics (LON:SLN), up 17%, after Richard Griffiths, the founder of Evolution Securities, increased his stake to 7.31% from 6.71%.

Xenetic Biosciences (LON:XEN), up 30.5%, leaves both Forbidden and Silence in its slipstream.

Sound Oil (LON:SOU) is wanted after it raised just over US$3mln (£1.9mln) via the fifth and sixth tranches of a share placement programme first announced last summer.

The stock was sold at a volume weighted price of 9.45 pence. The final tranche will expire on February 11.

The cash injection leaves the company with US$12.4mln and no debt. It said this morning it expects to begin drilling of the Nervesa appraisal well in northern Italy, with between US$14-$15mln in the bank. The cost of the work is put at around US$1.8mln to deliver a project with a net present value of US$60mln.

Angle (LON:AGL) is pointed downwards, after two days of huge gains that added more than 45p to the share price, taking it to 75p by Tuesday’s close. Shares are down 19% to 59.625p.


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