Cambridge Index rises 0.1%

3/03/2010

Notwithstanding the US Federal Reserve’s decision to keep interest rates at a record low level for an extended period, global equity markets came under selling pressure, amid weak consumer sentiment in the developed economies. The Cambridge Index rose 0.1% or 7.5 points to 6,302.2.

Gains in index heavyweights, Autonomy, ARM Holdings and Aveva Group, all up between 0.5% and 2.3%, just managed to overcome losses in Johnson Matthey, Greene King and CSR. ARM Holdings added 0.5%, on reports that Intel had terminated a partnership with TSMC, the world’s biggest foundry, increasing prospects of less competition in the embedded chips market for the company.

0203_CambridgeIndex and FTSE AIM 100 movement

CSR lost 5.2%, amid concerns that the recent profit warning by smart phone manufacturer, Palm, would weigh on the company’s future chip sales.

Kier Group jumped 5.5%, emerging as the top gainer in the Cambridge Index, as its first half underlying pre-tax profit climbed 20.8% to £31.9 million.

Pursuit Dynamics, up 3.4%, announced that it has decided to re-enter the brewing industry with a suite of new products and services, headed by its foundation product, the PDX Wort Heater. DS Smith gained 2.3%, after UBS upgraded the stock to “Buy” from “Neutral”, citing current valuation parameters.

NXT rose 1.8%, after stating that it is in a good position for the rest of 2010 due to the popularity of the touch screen market and its recent £1 million fundraising. The company announced a share placing of 7,481,561 new ordinary shares, priced at 13.0p per new ordinary share to raise approximately £1 million. First half revenues declined 52.4% to £1.0 million and loss before tax stood at £0.9 million, compared to a profit of £0.3 million recorded in the same period a year earlier.

Hartest Holdings plunged 22.6%, becoming the top loser in the Cambridge Index, after the company announced that it is no longer in offer talks with manufacturer Delta Controls. Other prominent losers were Tristel, Sareum Holdings, Cyan Holdings and Artisan (UK), all down between 6.2% and 11.4%.
 
UK markets showed a mixed performance during the week, as gains in banks and insurers were offset by losses in energy and mining stocks. The UK benchmark FTSE 100 Index eased 0.1% to 5,354.5, as weak UK retail sales and jobs data spurred concerns about the pace of the economic recovery.

Banks edged up, after US Federal Reserve Chairman, Ben Bernanke promised low interest rates for an extended period. Insurers also advanced, amid reports of a takeover for Aegon by Germany’s Munich Re.

Adding to the positive sentiment, the UK fourth quarter GDP data revealed a better-than-expected expansion of 0.3%. On the contrary, miners and energy stocks declined, as base metal and oil prices fell on the back of stronger dollar. The FTSE techMARK 100 Index rose 0.9% to 1,774.3, while the FTSE AIM 100 Index declined 1.2% to 3,030.8.

Markets in the US fell during the week, as weak economic data in the housing and consumer sector caused investors to ignore a spate of healthy corporate earnings and a flurry of merger & acquisition activity.

The consumer confidence index dipped sharply to 46 in February, the lowest level since April 2009 and orders for durable goods excluding transportation fell 0.6%, the most since August 2009, while sales of new homes declined 11% to an annual pace of 309,000, the lowest level on record. However, losses were limited, amid prospects of more liquidity at cheap rates, and after US fourth quarter economy expansion at an annual rate of 5.9%.

The Dow Jones Index lost 0.7% to 10,325.3, while the Nasdaq Index fell 0.3% to 2,238.3.


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