London open: Tullow, BHP lead resource stocks lower
Yesterday's optimism - on the back of positive macro data from China, Germany and the US - seems to have been short-lived, with the FTSE 100 falling in to the red in early trading on Wednesday. Eurozone concerns are now again in focus with meetings between the Greek government an private creditors scheduled for later today.
Worrying many in morning trade were reports that Fitch could downgrade Italy's credit rating by two notches. According to Reuters, the senior director for business and relationship management at Fitch in Italy, Alessandro Settepani, said "A downgrade by two notches is one of the possible options…The committee will assess the rating of Italy on the basis of refinancing levels and measures for growth."
Switching to the economy, UK unemployment data is out later this morning. The consensus expectation is that the International Labour Organisation (ILO) unemployment rate for November will have stabilised at 8.3%, while December’s claimant count unemployment is tipped to rise by 7,100.
RESOURCE STOCKS FALL AFTER UPDATES
Soaring oil prices contributed to a bumper 2011 for Tullow Oil, the Irish integrated oil company, but 2012 was more on the mind of investors, who marked down the shares on news of a delayed ramp-up to production at the firm's Jubilee field.
BHP Billiton was out of favour despite saying that it now expects full-year iron output to exceed its prior guidance after a strong first half of iron ore production in the Pilbara region of Western Australia. On the negative side, the miner reported a year-on-year fall in all its base metals production volumes in the first half.
Silver and gold miner Fresnillo was also lower after saying that silver output had remained flat in the final three months of the year and would continue to do so into 2012. On the other hand, the Mexico-focused miner said that it had beaten its full-year gold production target.
Sector peers ENRC and Rio Tinto also took a hit early on, tracking metals prices lower.
Meanwhile, Imperial Tobacco was among the fallers after going ex-dividend.
Heading the FTSE 100 risers was hedge fund manager Man Group despite seeing funds under management fall $6bn to $58.4bn at the end of December, an even bigger fall than the $4.6bn dive suffered in the second quarter of 2011.
ON THE FTSE 250…
African Barrick Gold, the Tanzania-focused gold producer, fell after seeing production drop 11% in the final three months of last year compared to the same period of 2010.
Following suit was South-American miner Hochschild after announcing that it expects silver production to be lower in 2012 than last year and to see a rise in production costs.
Specialist pharma company BTG nudged higher after saying it has won approval in the US for its Voraxaze drug.
FTSE 100 - Risers
Man Group (EMG) 113.30p +5.79%
Resolution Ltd. (RSL) 268.80p +1.20%
Experian (EXPN) 880.00p +0.51%
Tesco (TSCO) 318.95p +0.46%
Kingfisher (KGF) 252.20p +0.36%
Evraz (EVR) 408.60p +0.27%
Reckitt Benckiser Group (RB.) 3,339.00p +0.27%
Capital Shopping Centres Group (CSCG) 314.40p +0.26%
United Utilities Group (UU.) 612.00p +0.25%
BAE Systems (BA.) 306.10p +0.23%
FTSE 100 - Fallers
Tullow Oil (TLW) 1,367.00p -6.05%
Imperial Tobacco Group (IMT) 2,290.00p -2.97%
Royal Bank of Scotland Group (RBS) 24.42p -1.73%
Rolls-Royce Group (RR.) 751.00p -1.57%
Lloyds Banking Group (LLOY) 29.16p -1.27%
BHP Billiton (BLT) 2,096.50p -1.13%
Eurasian Natural Resources Corp. (ENRC) 738.50p -1.07%
BT Group (BT.A) 203.70p -1.02%
Rio Tinto (RIO) 3,658.50p -0.96%
Fresnillo (FRES) 1,738.00p -0.86%
FTSE 250 - Risers
Intermediate Capital Group (ICP) 269.30p +7.42%
Perform Group (PER) 247.00p +5.11%
JD Sports Fashion (JD.) 718.50p +3.38%
Senior (SNR) 186.90p +2.92%
Daejan Holdings (DJAN) 2,820.00p +2.58%
Talvivaara Mining Company (TALV) 333.10p +2.49%
BH Global Ltd. USD Shares (BHGU) 12.08 +2.37%
Rank Group (RNK) 132.00p +1.93%
Allied Gold Mining (ALD) 159.70p +1.85%
PayPoint (PAY) 560.00p +1.82%
FTSE 250 - Fallers
QinetiQ Group (QQ.) 131.30p -2.74%
African Barrick Gold (ABG) 455.00p -2.69%
Hochschild Mining (HOC) 450.00p -2.17%
JD Wetherspoon (JDW) 408.50p -1.97%
AZ Electronic Materials SA (DI) (AZEM) 276.20p -1.92%
CSR (CSR) 212.20p -1.71%
New World Resources A Shares (NWR) 457.50p -1.68%
Euromoney Institutional Investor (ERM) 659.50p -1.57%
Imagination Technologies Group (IMG) 549.50p -1.52%
Cable & Wireless Worldwide (CW.) 17.00p -1.45%