Cambridge Index falls 2.5%


Most of the global equity markets erased their 2010 gains, as investors were caught up in a bearish mood set off by Barack Obama’s proposals to regulate large banks, China’s move to curb bank lending and renewed Greek sovereign debt worries. The Cambridge Index fell 2.5% or 158.7 points to 6,083.2.

Eight out of the top ten index heavyweights ended in the red.  Autonomy Corp., down 1.3%, announced a strategic tie-up with Precise, a provider of media intelligence services. Johnson Matthey eased 6.0%, as Credit Suisse Group downgraded the stock to “Underperform” from “Neutral”, citing current valuation parameters.

 260110_Cambridge INdex

ARM Holdings was down 0.4%, despite expectations that the company would benefit from persistent robust demand for smartphones and the new clutch of netbooks and Internet tablets. JP Morgan estimates the European semiconductor shares to remain buoyant in the first half of the year. Kier Group lost 5.6%, ahead of its interim results to be announced on 24 February 2010.

Falkland Islands Holdings plunged 8.6% to 425.0p, becoming the top loser in the Cambridge Index. Other noticeable losers included Cyan Holdings, DS Smith and ITM Power, all down between 5.9% and 6.2%.

Xaar shed 3.5%, despite announcing that trading for the fourth quarter of 2009 and the full year was in line with the Board’s expectations. The company also forecast that its full-year earnings would be in line with market expectations.

Dialight surged 11.6%, emerging as the top gainer in the Cambridge Index. The company announced that it has launched the “StreetSENSE(TM) SL Series LED Street Light”, an energy-efficient and ’green’ alternative to the conventional street lighting solutions.

Brady soared 7.1%, after the company announced that a better-than-expected performance from its recently acquired business of Commodities Software (UK) would lead to a 30% revenue growth in 2009, surpassing market consensus. Other prominent gainers were Sagentia Group, Hartest Holdings and Amino Technologies, all up between 1.9% and 2.7%.

The UK benchmark FTSE index lost 2.8% to 5,303.0 during the week, amid heavy losses in the financial sector, as US President Barack Obama urged limits on risk-taking by banks and after concerns mounted that China would take measures to stem economic growth.

The banking sector also came under pressure, as quarterly results from heavyweight US peers, JP Morgan, Citigroup, Bank of America and Morgan Stanley failed to inspire confidence among investors. Commodity stocks took a hit from falling oil and metal prices. Miners extended losses, amid reports that Australia may impose higher taxes on mining projects. The FTSE techMARK 100 Index eased 1.6% to 1,727.6, while the FTSE AIM 100 Index fell 1.9% to 3,066.5.

Markets in the US finished lower during the week and the Dow Jones Index suffered its biggest weekly drop since March 2009, as banks plunged on a US Government proposal to restrict proprietary trading and China acted to rein in economic growth. Uncertainty over whether Federal Reserve Chairman Ben S. Bernanke would receive Senate approval for a second term, undermined investor confidence.

The Nasdaq index was weighed down by losses in IBM and Google, after the former revealed a drop in its fourth-quarter business-consulting revenue, and the latter reported disappointing quarterly revenue growth. A rise in initial jobless claims cast doubts over the recovery in the job market. The Dow Jones Index fell 4.1% to 10,173.0, while the Nasdaq Index declined 3.6% to 2,205.3.


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