It's almost a truism that markets seem to like job cuts, so it is no surprise 3i shares have moved higher after the private equity firm announced it was axing a third of its staff.
It confirmed details of the new strategy being put in place byi chief executive Simon Borrows, who took the top job last month. 3i will cut 160 jobs and shut down a number of offices, from Birmingham to Barcelona. The move is part of a plan to reduce costs by £40m a year and to placate dissident shareholders including Laxey Partners. Laxey may well respond at 3i's annual meeting later.
The news has sent the firm's shares 4.5p higher to 195.8p. Meanwhile talk that interdealer broker Icap may cut 70 jobs in London has helped push it up 5.2p to 336.1p.
Overall the early hours agreement at the EU summit to help struggling Spain and Italy has given investors some confidence again. Although the meeting is not over, the initial reaction is positive. Analysts said expectations were so low, any sign of a deal was bound to be well received. The FTSE 100 is up 66.30 points at 5559.36, although it is off its best level of 5594.
Barclays continues to slip in the wake of the discovery it manipulated libor rates, down 0.15p to 165.45. This is more noticeable since other banks have been lifted by the EU summit news. Lloyds Banking Group is up 0.66p at 30.6p and Royal Bank of Scotland has risen 3.5p to 209.9p. The rises come even as the banks admitting another misselling scandal involving intereest rate swaps to small and medium sized companies.
Pennon is celebrating its first day in the FTSE 100 - it has replaced International Power after the energy group's takeover by GDF Suez - with a 6.5p fall to 770.5p. Water companies were wanted on Thursday for their defensive qualities, as well as takeover hopes after France's Veolia sold its UK water business for £1.1bn. But now they have succumbed to a touch of profit taking, with Severn Trent down 7p at £16.38.
