Markets end the week higher - Latest Market Analysis
The positive momentum from yesterdays concerted central bank liquidity program was evident in Friday trade. The unprecedented appearance of US Treasury Secretary Timothy Geithner at a meeting of European finance ministers in Poland also added to hopes that some form of coordinated and lasting solution to European debt problems may in fact be realised. It was anticipated that Mr Geithner would urge ministers to increase the size of Europe’s stability fund, the EFSF. European markets were buoyed, the FTSE 100 trending between its 5338 point opening level and 5400, the latter providing a resistance barrier that the market seemed unwilling to breach.
As the day progressed reports indicated that Mr. Geithner’s audience was far from receptive, presumably not warming to suggestions that Europe had the capacity but not the coordination to deal with the two year old crisis. Austria’s Finance Minister stated there had been particular disagreement over the idea of putting more money towards fighting the crisis. After testing the 5400 level several more times, the FTSE lost some ground towards the close, worried by sudden drops in French banking stock. The latter was caused by news that only 75% of Greece’s creditors have agreed to swap or roll-over their debt in the voluntary debt exchange plan that was outlined earlier this year. This is below the 90% participation rate that was hoped for. Nevertheless, the FTSE put on 30 points to finish the day 0.6% higher, resulting in a weekly gain of 3%.
On a stock level, Inmarsat led the FTSE 100 leader board amid rumours that it may be subject to a private equity bid. Its 35 point gain saw its shares up more than 6.9% by the close of trade, ahead of the second best performer 3i Group at 5.1%. ARM Holdings was one of the worst performers on the blue chip index, investors concerned by poor results from Research in Motion, the maker of Blackberry, in the US. After a strong performance since its inclusion, ARM was removed from Goldman Sachs conviction buy list. Despite retaining its buy recommendation and 800p price target, the shares lost 2.46% to finish at 595p.