Cambridge Index rises 1.7%

30/03/2010

After weeks of political squabbling, Eurozone leaders agreed on a rescue package for Greece, which includes assistance from the IMF as well as bilateral loans from fellow euro-member states, sending the global equity markets higher for the fourth consecutive week. The Cambridge Index climbed 1.7% or 120.17 points to 7,141.1.

The Index outperformed the broader US and UK markets, as all but one of the top ten index heavyweights managed to end in the black. Autonomy and Johnson Matthey added 0.5% and 0.4% respectively, despite broker downgrades. CSR, down 0.1%, announced that Panasonic has selected its SiRFstarIII architecture features.

290310_Cambridge Index and FTSE AIM 100 movement

Aveva Group, up 0.9%, announced that one of the largest EPC contractors in Iraq has opted for AVEVA Plant solutions for its ongoing and future projects in Iraq. The Office of Fair Trading announced that the completed acquisition by Cartonplastgroup Holding of certain assets of the Demes Business Unit of DS Smith should not be referred to the Competition Commission.

Sagentia Group jumped 30.6% and emerged as the top gainer in the Cambridge Index, after Martyn Ratcliffe made a mandatory offer for the company’s entire issued and to be issued share capital. Greene King surged 6.4%, despite a warning by the UK beer and pub sector that tax hikes on alcohol would result in an additional cost of £161 million in 2010.

ARM Holdings gained 5.4%, after its peer, Taiwan Semiconductor, forecasted that the global semiconductor market output would grow 22% in 2010. Other prominent gainers were Abcam and Xaar, up 3.3% and 5.8% respectively. Domino Printing Sciences rose 1.2%, after JPMorgan Cazenove upgraded the stock to “Overweight” from “Neutral”. ANT, up 1.8%, announced that it would showcase a live HbbTV (Hybrid Broadcast Broadband TV) implementation at the IPTV World Forum.

Vernalis plunged 17.7%, emerging as the top loser in the Cambridge Index, after the company announced that it would stop the development of its indantadol drug, ‘V3381’, as the drug failed in its clinical trial. Other noticeable losers were Genemedix, Dialight and Netcall, all down between 3.1% and 7.7%.
 
In the UK, the FTSE 100 Index advanced 0.9% over the week to 5,703.0, as fears over a possible Greek debt default faded, after the European leaders agreed on a Greek rescue proposal. Dubai’s decision to support the restructuring of debt-stricken state-owned firms, Dubai World and Nakheel, also provided some relief to the investors.

Adding to the positive sentiment, UK retail sales registered a higher-than-expected growth of 2.1% in February. The FTSE techMARK 100 Index rose 0.8% to 1,891.6, while the FTSE AIM 100 Index edged up 2.0% to 3,286.0.

The US markets rose during the week, amid a flurry of broker upgrades, approval of health-care legislation and improving job market conditions. Investors increased their exposure to risky assets, as weekly initial jobless claims fell to 442,000, the lowest level in six weeks.

Several prominent stocks such as Citigroup, Boeing, Caterpillar and Apple benefited from positive broker reviews. The banking sector received a boost after Federal Reserve Chairman, Ben Bernanke reiterated his pledge to keep interest rates at a record low level for an extended period. However, gains were limited as weak US Treasury note auctions and Fitch’s downgrade of Portugal’s credit rating affected sentiment. Also, a 2.2% decline in new home sales in February and a downward revision to US fourth-quarter growth figures cast doubts over the economic recovery. The Dow Jones Index gained 1.0% to 10,850.4, while the Nasdaq Index rose 0.9% to 2,395.1.


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