London open: HSBC and miners provide a drag early on

5th Nov 2012 08:39

UK stocks declined sharply on Monday morning on the back of a mixed reaction to economic data from China and caution ahead of the presidential elections in the US and a parliamentary vote in Greece.The HSBC China services sector purchasing managers' index (PMI) fell from a four-month high of 54.3 to 53.5 in October, contrasting with the official services PMI from the National Bureau of Statistics this weekend, which rose from 53.7 to 55.5.Despite the slight fall in the HSBC index, the HSBC composite PMI (which measures both manufacturing and services) rose from 50.3 to 50.5, leading some pundits to say that the urgency for further economic stimulus is diminishing."European headline shares opened tentatively this morning as volumes remained thin ahead of America's presidential elections," said financial trader Shavaz Dhalla from Spreadex."Although it is difficult to anticipate how risk-on assets will respond to potential news that either the Republican or Democratic parties are winning the most support, it could be argued that US equities may show a bias for a Republican victory given Mitt Romney's proposition of tax cuts."Markets will also be keeping an eye on Greece today ahead of critical parliamentary votes on austerity. Greek Prime Minister Antonis Samaras said: "We have to save the country from catastrophe...Leaving the euro would be a nightmare and we intend to avert it."The smallest party in the coalition government Democratic Left has already pledged to vote against the €13.5bn in cuts due to opposition to labour reforms. Even some members of the leading New Democracy party have announced plans to vote against the package. Markus Huber, head of German HNW Trading at ETX Capital, said: "with not all of the coalition partners potentially in full agreement with these budget cuts, it needs to be seen if these important austerity measures will indeed pass a parliament vote."FTSE 100: Miners weigh in LondonMining stocks were providing a drag on the Footsie early on as investors digested the economic figures from China. Vedanta, Rio Tinto, Kazakhmys, ENRC, Fresnillo and Antofagasta were all registering losses in the opening hour.Banking giant HSBC was under the weather after reported pre-tax profit fell from $3.7bn to $3.5bn in the third quarter. As well as further provisions for PPI redress, third-quarter results included an additional provision of $800m in relation to the ongoing anti-money laundering investigation in the US.Leading the upside was engineering group Weir after saying that it is set to deliver double-digit profit growth this year despite weak order inputs and a slowdown in growth in the third quarter. Insurance goliath Prudential fell after entering into a long-term exclusive bancassurance partnership in Thailand with Thai firm Thanachart Bank.FTSE 250: Centamin surges after court judgmentGold miner Centamin rocketed this morning after the Egyptian administrative court decided that its flagship Sukari mining licence is valid, reassured investors who took profits last week on rumours that the company could lose its primary source of revenue.Data centre operator Telecity dropped despite saying that full-year earnings will be in line with market forecasts. Consensus estimates for the full year ending December 31st are for pre-tax profits of £81.66m on revenues of £284.35m.Specialist insurance group Hiscox fell after saying it is too early to produce any meaningful estimate of claims from Sandy as it posted 6.4% increase in gross written premiums for the nine months to September 30th. FTSE 100 - RisersWeir Group (WEIR) 1,815.00p +3.66%Bunzl (BNZL) 1,028.00p +1.28%GlaxoSmithKline (GSK) 1,376.00p +1.06%Associated British Foods (ABF) 1,377.00p +0.51%Tesco (TSCO) 325.50p +0.23%Smith & Nephew (SN.) 639.00p +0.16%Severn Trent (SVT) 1,558.00p +0.06%Morrison (Wm) Supermarkets (MRW) 263.90p +0.04%FTSE 100 - FallersITV (ITV) 86.95p -2.85%Vedanta Resources (VED) 1,133.00p -2.33%Kazakhmys (KAZ) 718.00p -2.31%Eurasian Natural Resources Corp. (ENRC) 326.60p -2.07%Antofagasta (ANTO) 1,288.00p -2.05%Rio Tinto (RIO) 3,150.50p -1.98%Fresnillo (FRES) 1,882.00p -1.98%Aggreko (AGK) 2,161.00p -1.64%HSBC Holdings (HSBA) 616.90p -1.47%Aviva (AV.) 333.70p -1.45%FTSE 250 - RisersCentamin (DI) (CEY) 69.60p +15.04%JD Sports Fashion (JD.) 761.00p +2.15%Dialight (DIA) 1,156.00p +2.03%TR Property Inv Trust Sigma Shares (TRYS) 82.45p +1.79%Paragon Group Of Companies (PAG) 251.10p +1.70%easyJet (EZJ) 641.50p +1.18%Ocado Group (OCDO) 62.95p +0.56%BH Global Ltd. USD Shares (BHGU) 11.25 +0.54%Redrow (RDW) 159.40p +0.50%Heritage Oil (HOIL) 203.40p +0.49%FTSE 250 - FallersTelecity Group (TCY) 851.50p -6.74%Dixons Retail (DXNS) 24.41p -5.53%Talvivaara Mining Company (TALV) 128.50p -5.10%New World Resources A Shares (NWR) 256.90p -3.93%Lonmin (LMI) 487.40p -3.29%Ferrexpo (FXPO) 219.60p -3.22%Bumi (BUMI) 274.00p -3.18%ITE Group (ITE) 187.70p -2.95%William Hill (WMH) 334.40p -2.56%Chemring Group (CHG) 270.50p -2.45%BC