Member Article

Lloyds leads FTSE higher despite gloomy outlook

SourceURL:file://localhost/Users/ruthmitchell/Library/Mail Downloads/8 November 2011.docx

Wall Street was lifted last night, having spent most of the day in the red, following comment from the ECB’s Juergen Stark whose upbeat outlook suggested the eurozone’s debt crisis may be overcome in “one or two years at the latest”. Whilst there was little evidence to back up this statement, the sentiment appeared to percolate into today’s equity markets. European indices opened higher by over a percent, although gains in treasuries and losses in equivalent Italian debt highlighted the mixed feeling ahead of an important Italian parliamentary budget vote later today.

Partly state owned Lloyds Banking Group was buoyed by its third quarter trading update, in which it stated a reduction in bad loans and non-core assets, and a lower exposure to peripheral eurozone debt. Investors reacted positively despite a £519m net loss for the period and a gloomy outlook relating to weakness in the UK economy. It follows disappointing results from the France’s second largest bank, Society General, which suffered a 31% drop in its third quarter profits largely as a result of a write down in Greek sovereign debt and decreased trading revenue. The shares ended the day top of the FTSE leader board with a 4.4% gain to 28.9p.

AstraZeneca was bottom of the index, investors disappointed by negative results from a partnered Phase 3 trial of its antidepressant prospect, TC-5214. The missing of primary endpoints in the trial puts into question the future commercialisation of the asset, shares reacting badly by losing 3.15%.

Copper and crude oil prices helped miners and integrated oils, which helped the FTSE put on 56.5 points today to finish at 5567. The 1.0% gain was also helped by news out of Rome that Silvio Berlusconi won the budget vote, albeit with the abstention of many politicians and so not with a majority. It is now likely he will face a confidence vote tomorrow.

This was posted in Bdaily's Members' News section by John Dance .