Notwithstanding China’s attempt to rein in bank lending, global equity markets turned positive after several weeks, encouraged by help for debt laden Greece, and a batch of positive global economic data that included upbeat Australian jobs report, strong bank-lending figures in China and improving job market conditions in the US.
Cambridge Index falls 1.2%
Going against the trend, the Cambridge Index fell 1.2% or 76.7 points to 6,166.3. Five of the top nine index heavyweights recorded negative returns during the week. Autonomy slid 7.3%, after announcing an offering of unsecured convertible bonds worth £500 million.
ARM Holdings lost 3.7%, after Exane BNP Paribas downgraded the stock to “Neutral” from “Outperform”. However, Johnson Matthey edged up 3.6%, as platinum prices registered a weekly gain.
GeneMedix plunged 11.4% and emerged as the top loser in the Cambridge Index, as investors preferred to book gains following the stock’s recent rally. Vernalis dropped 8.0%, after announcing plans to raise approximately £30 million to make payment to Paul Capital Healthcare and regain full control of the royalty rights to migraine treatment frovatriptan. Other noticeable losers were Bango, Sareum Holdings and Cyan Holdings, all down between 4.1% and 8.0%.
Pursuit Dynamics PLC, a provider of steam propulsion and pumping technology, jumped 9.1% to 150.0p, becoming the highest gainer in the Cambridge Index. CSR gained 8.0%, after the company announced that its fourth quarter revenues rose 41.4% to $198.1 million and profit before tax stood at $21.9 million.
ITM Power climbed 5.5%, after the company announced that it has bagged a grant funding of £337,000 over 13 months for the development of a Transportable High Pressure Hydrogen Refuelling Station. Other prominent gainers included Sagentia Group, Domino Printing Sciences and DS Smith, all up between 4.7% and 8.1%.
Falkland Islands Holdings added 1.2%, after the company announced that trading across its businesses for the 10 months ended 31 January 2010 has been in line with the board’s expectations, and that this performance is expected to continue for the rest of the financial year ending 31 March 2010.
Amino Technologies gained 0.8%, after the company’s full year pre-tax loss was overshadowed by its significant contract win and a good first half revenue visibility.
The benchmark FTSE 100 index rose 1.6% to 5,142.5, as European officials pledged to help Greece overcome its budget deficit problems. Miners found favour with investors, as metal prices recovered ground. Upbeat results from Xstrata and Randgold Resources also buoyed positive sentiment towards mining.
Markets got a boost from the latest Bank of England inflation report, which raised expectations that UK interest rates are set to stay low for a longer period than currently expected by the market. Adding to the positive sentiment, UK house price balance index rose to 32 in January, and manufacturing production rose 0.9% in December. The FTSE AIM 100 Index was up 1.0% to 2,996.4, while the FTSE techMARK 100 Index fell 0.5% to 1,704.7.
US markets advanced during the week, as upbeat US economic data and positive corporate results buoyed risk appetite among investors. Coca-Cola and McDonald’s reported positive results, while a broker upgrade renewed optimism in the industrial sector.
On the economic front, US initial jobless claims declined by 43,000 to 440,000, the lowest level in five weeks, while retail sales rose 0.5% in January, exceeding market expectations. The Dow Jones Index gained 0.9% to 10,099.1, while the Nasdaq Index rallied 2.0% to 2,183.5.
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