Cambridge Index rises 1.5%

11/02/2010

Global equity markets declined during the week, as investors continued to shed risky assets, after cost of insuring debt against a default by the governments of Greece, Portugal and Spain soared to new highs. The Cambridge Index rose 1.5% or 89.8 points to 6,243.1.

Three of the top five index heavyweight stocks recorded healthy returns. Autonomy Corp. added 3.9%, after the company announced that its fourth quarter revenue rose 53.0% to $223.1 million and profit before tax climbed 35.9% to $95.8 million. The company expressed confidence about the outlook for 2010, citing some signs of improvement in the macro environment at the end of 2009.

100210_Cambridge Index and FTSE AIM 100 movement

Johnson Matthey rose 2.3%, as JP Morgan upgraded the stock to “Neutral” from “Underweight”, citing the company’s potential to deliver ample growth later this year. However, Greene King eased 5.5%, despite Bank of America’s positive update on the pub sector.

GeneMedix surged 191.7% to 8.8p, becoming the top riser in the Cambridge Index. ARM Holdings rallied 5.5%, after the company’s quarterly results surpassed market expectations. The company announced that its fourth quarter revenues fell 6% to $140.0 million and profit before tax declined 3% to £32.3 million. The company predicted its 2010 dollar revenues to be in line with current market expectations. Other noticeable gainers included Amino Technologies, Cyan Holdings and Domino Printing Sciences, all up between 2.2% and 18.5%.

Sareum Holdings lost 7.0% to 0.4p, emerging as the top loser in the Cambridge Index. Pursuit Dynamics, down 6.1%, announced that options have been exercised by three employees over 133,333 new ordinary shares of 1p each. Other prominent losers were Netcall, Aveva Group and Vernalis, all down between 5.8% and 6.8%. 

ITM Power slid 2.7%, in spite of reports that its Chief Executive Officer, Dr Graham Cooley, acquired 104,156 ordinary shares at a price of 19.7p per share in the company on 1 February 2010. The UK Takeover Panel set a deadline of 22 February 2010 for Delta Controls to make an offer for Hartest Holdings, down 4.5%.

The UK markets extended their losses during the week and the FTSE 100 index suffered its fourth consecutive weekly decline, a trend not witnessed since July 2008, as fears that Greece, Spain and Portugal would face difficulties in curbing their budget deficits triggered a crisis of confidence.

Commodity stocks sustained heavy losses, as metal and oil prices continued to fall. The decision by the Bank of England to suspend its quantitative easing programme also weighed on the investor sentiment. The benchmark FTSE 100 index eased 2.5% to 5,060.9 and the FTSE AIM 100 Index declined 1.3% to 2,966.7. The FTSE techMARK 100 Index fell 1.2% to 1,713.5.

US markets retreated during the week, as a lower-than-expected activity in the services sector and dismal earnings reports from some companies cast doubts among investors over the pace of the economic recovery. President Obama’s pledge to complete banking and healthcare reform also revived fears of increased regulation. However, losses were limited as the fall in US unemployment rate to 9.7%, a five-month low, managed to outweigh an unexpected decline in January payrolls.

Adding to the positive sentiment, US consumer credit registered a less-than-expected decline of $1.7 billion in December, and expectations grew that the European Union would come up with a solution for budget deficits in Greece and Spain. The Dow Jones Index eased 0.5% to 10,012.2, while the Nasdaq Index lost 0.3% to 2,141.1.


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