The FTSE 100 is keeping up the volatility this morning, falling back into the red and wiping out some of Tuesday's gains as miners, banks and energy companies weigh on the index.
The FTSE 100 is down 37.8 points, or 0.8%, to 4648 at 10.25am. News that the Bank of England was divided over how much to raise its quantitative easing programme barely moved the stock markets, the FTSE was down 44 points before the announcement.
The index had recorded its biggest one-day fall in six weeks on Monday as fears about the fragility of the economic recovery gripped markets around the world. It regained some ground on Tuesday as traders continued to take falls as a chance to buy into the market, with some betting this rebound rally has a little further to go yet.
As economic jitters return most of the miners are headed lower but Eurasian Natural Resource Corporation (ENRC) is the top riser on the FTSE 100 after its results beat expectations. First-half earnings per share fell 59% from a year earlier to 43 cents but that was above a consensus forecast of 34.43 cents compiled by the company.
Chief executive Johannes Sittard said:
"Our first-half financial and operational performance, in the face of considerable market pressures, reflected a satisfactory outcome. The group was positioned effectively to capture the upturn, and particularly the opportunity offered by China, and this has allowed a rapid recovery in production levels.
"Into the second-half we believe that the recovery will be sustained."
Shares in ENRC are up 56p, or 7.2%, to 833p.
Further down the market, newspaper ditributor John Menzies cheered investors by predicting that full-year profits will beat the current view. Underlying pretax profits in the first half were up 15.8% to £13.2m.
Chairman William Thomson said today:
"The global economic situation remains challenging: however, both operating divisions are performing well and I look forward to the full year outturn being ahead of current market expectations."
That optimism has lifted the shares 20.7p, or 8.9%, to 255p.
Elsewhere, Sony's widely expected price cut to its PS3 console announced last night has boosted shares in games and console retailers HMV and Game Group, up 0.25% and 1.2%, respectively.
Peter Smedley, analyst at Charles Stanley comments:
"This price cut, coupled with a strong exciting new video games release schedule for Autumn/Christmas 2009, should see GAME benefitting from strong sales of Sony consoles, and more importantly, high margin software of Sony-related games."
"We believe that this news is the most significant news so far in 2009 and is clearly a positive for GAME as it underpins management-guided consensus forecasts which do not include the assumption of a PS3 price cut in 2009. We would also argue this news is a positive for HMV where 18% of FY 2009 (and likely 20%+ in FY 2010) sales came from video games."
There was also reassuring news for investors in heart monitoring company LiDCO. The Aim-listed group said it was on on track to deliver a maiden profit in the coming full year lifting its shares 1.25p, or 7.6%, to 17.75p.
Health and social care provider Care UK was headed the other way. Its shares fell 8.25p, or 2.7%, to 296.75p after the company said it had not seen the normal second half increase in the hours of care delivered at its Community Care division, where volumes had remained at a similar level over the past four months. "This will materially impact the profitability of this division in the current financial year," it added.
Finally, shares in Lookers are down 3.25p, or 4.7%, at 65.75p after the used car dealer said it had seen underlying first-half profits climb 13.5% but it scrapped its dividend to pay down debt in light of a "very difficult" car market.
Ken Surgenor, the chief executive, said:
"Demand for new cars has continued to fall and whilst the introduction of the UK government's £300m vehicle scrappage scheme has gone some way to stimulating the market, uncertainties in the financial markets and rising unemployment continue to suppress consumer demand."
