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The Guardian - UK
The Guardian - UK
Business
Simon Neville

FTSE opens flat despite rumours of QE3 but engineering group GKN is up 12%

Traders across the world will be waiting with baited breath as its crunch time at the Bank of England and European Central Bank.

It's rate setting day. Or, as it seems to have become, a chance for the central banks to reaffirm their commitment to the "wait and see" strategy, with rates unlikely to change, at least in the UK if not EU.

However, some seem to think the BoE could pump extra cash into the system through QE3, thought to be between £50bn and £75bn.

Across Europe it was a mixed set of markets, with the FTSE slightly up 9 points, 0.2%, at 5694, along with Germany's DAX also up.

But France's CAC, Spain's IBEX and Italy's FTSE MIB were all down.

Greece finally has a finance minister after Yannis Stournaras was sworn in – you may remember his predecessor quit before he was officially appointed due to ill health.

In company news the biggest riser is GKN, up 22.8p, 12.2%, at 209.3p, after the engineering group bought car giant Volvo's aerospace division for £663m in cash.

Shareholders will be happy after rumours of a possible rights issue turned out not to be needed.

It means GKN's exposure to civil aerospace from 60% to 70% and chief executive Nigel Stein told investors he has no plans to sell parts of the new acquisition, but did say there will be a "period of pause" on further purchases.

Elsewhere Aviva has its investor day today with a new radical structure unveiled by its chairman John McFarlane, who is still hunting for a new chief executive after former boss Andrew Moss jumped ship during the shareholder spring.

McFarlane will cut staff, sell 16 businesses and warned 27 more need "significant improvement". And while the soon-to-be ex-employees might not be happy at the news, the shares are up 2.7p, 7.7%, at 289p.

Some of the biggest fallers were recruitment firm Michael Page, down 19.2p, 5%, at 360.7p, after Merrill Lynch downgraded the company. It hit rival Hays, down 2.4p, 3.1%, at 74p.

Xstrata (up 22.7p to 843.5p) and Glencore (up 5.3p to 317p) were both looking good after the former announced it would delay the EGM to vote on the merger. Investors may be hoping that a resolution could be reached over the huge payouts to managements which has left shareholders furious.

And finally, Barclays was down just 0.8p at 165.3p, despite Moody's rating agency threatening to downgrade the bank.

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