London open: Stocks slip after Greek bailout approval

21st Feb 2012 08:19

- Eurogroup approves Greek bailout.- Euro strengthens after announcement.- Footsie slips early on with oil stocks weighing on index.Despite Eurozone finance ministers doing what many had expected by approving the next tranche of aid for Greece, the Footsie opened moderately lower on Tuesday morning, as investors shifted their attention to the challenges that lay ahead in getting both the Greek and the wider Eurozone economy back on track.EUROGROUP SIGNS OFF ON €130BN GREEK BAILOUTIn a statement issued this morning, the Eurogroup announced that they have reached a deal with Greece on the €130bn bailout package. "We reiterate our commitment to provide adequate support to Greece during the life of the programme and beyond until it has regained market access, provided that Greece fully complies with the requirements and objectives of the adjustment programme," the statement said.As part of the package, the country's debt-to-gross domestic product ratio is expected to fall from around 160% to 120.5% by 2020. Private sector bond-holders are to take a 53.5% hair-cut on Greek debt. Other elements include a lower margin charged by the official sector on loans to Greece, to 150 basis points from 200 basis points previously.The announcement sparked a rise in the euro against the dollar, which has since come back down. The euro rose to $1.3292, compared with the previous close of $1.3242. After the open in London, the single currency was trading at the $1.3261 level.Some analysts seem to be attaching particular importance now to whether or not the country's debt swap will be successful and if credit default swaps on Greek debt will be triggered. Furthermore, some observers are now asking the difficult question of whether enough has been done or not. Having said that, there seems to be a rather broad consensus that a "disorderly default" has been avoided. OIL STOCKS PROVIDE A DRAGFinancials were on the rise in early morning trade with Admiral, Barclays, Schroders, Lloyds and Ashmore all performing well. However, oil stocks were leading the downside as oil prices retreated after a strong rise yesterday which saw the price of Brent crude reach the $120-a-barrel level. The spike in oil prices was triggered after oil rich Iran threatened to stop oil exports to more European countries after Tehran reduced sales to French and UK companies the previous session. Iran said the threat was in retaliation to EU countries if they continued to carry out what it called "hostile acts".Tullow Oil was the heaviest faller early on despite saying that one of its exploration wells (Jupiter-1) offshore Sierra Leone has successfully encountered hydrocarbons. Sector peers Cairn Energy, BG Group, Petrofac and Shell were also out of favour.Meanwhile, oil-related engineering and project management services outfit AMEC was in the red despite saying that is returning pots of cash to shareholders, emboldened by the strength of its order book and the positive outlook for the markets it serves. The group bumped up the total dividend for 2012 by 15% to 30.5p and announced a £400m share buy-back programme. Revenue for 2011 at £3,261m, while up 11% on 2010, was below the £3,273m expected by the market.However, Kazakhstan-focused oil explorer Max Petroleum is rising again today. The stock rose sharply on Monday on rumours that another operator in Khazakstan, Zhaikmunai, is preparing to launch a bid at around 35p a share. A public relations officer representing Zhaikmunai told Sharecast there is "absolutely no truth" in the rumour.FTSE 250: SEGRO FALLS, CRODA RISESEuropean industrial property firm SEGRO saw earnings per share on a European Public Real Estate Association (EPRA) basis move up in 2011, although net asset value per share fell back. Shares fell nearly 3% early on. EPRA earnings per share rose 7.6% to £18.4m from £17.1m the year before, despite the company posting a loss before tax of £53.6m compared to a profit of £197.2m the year before. Net asset value per share dipped 5.7% to 345p from 366p at the end of 2010. Meanwhile, Croda International, the speciality chemical producer, was a high riser after achieving a profit before tax of £60m in the final quarter of 2011, a rise of 22.7% compared to the same period of 2010. For the full year, the company saw pre-tax profits rise 25.9% against 2010, hitting £242.2m by the end of December.BCFTSE 100 - RisersPolymetal International (POLY) 1,097.00p +1.20%Admiral Group (ADM) 1,020.00p +0.89%Barclays (BARC) 252.75p +0.74%Schroders (Non-Voting) (SDRC) 1,277.00p +0.47%Compass Group (CPG) 640.00p +0.39%Capita (CPI) 659.00p +0.38%Lloyds Banking Group (LLOY) 36.48p +0.37%WPP (WPP) 819.50p +0.37%Ashmore Group (ASHM) 393.60p +0.25%British Sky Broadcasting Group (BSY) 689.50p +0.22%FTSE 100 - FallersTullow Oil (TLW) 1,564.00p -2.31%Morrison (Wm) Supermarkets (MRW) 293.20p -1.38%Man Group (EMG) 134.50p -1.18%IMI (IMI) 973.00p -0.97%Cairn Energy (CNE) 351.00p -0.90%Bunzl (BNZL) 917.00p -0.81%BG Group (BG.) 1,497.00p -0.80%Next (NXT) 2,760.00p -0.72%Petrofac Ltd. (PFC) 1,542.00p -0.71%National Grid (NG.) 640.00p -0.70%FTSE 250 - RisersCroda International (CRDA) 2,120.00p +4.38%Dixons Retail (DXNS) 15.49p +3.96%Balfour Beatty (BBY) 296.40p +1.93%Aquarius Platinum Ltd. (AQP) 148.10p +1.65%Petropavlovsk (POG) 707.00p +1.51%Supergroup (SGP) 560.00p +1.27%Misys (MSY) 334.20p +1.24%Kesa Electricals (KESA) 86.70p +1.17%Ocado Group (OCDO) 104.90p +1.16%Henderson Group (HGG) 127.40p +1.03%FTSE 250 - FallersBellway (BWY) 794.00p -2.93%SEGRO (SGRO) 230.00p -2.83%Howden Joinery Group (HWDN) 113.30p -2.58%Cobham (COB) 187.10p -2.20%Homeserve (HSV) 230.00p -1.88%Spectris (SXS) 1,630.00p -1.87%CSR (CSR) 270.00p -1.82%Cable & Wireless Worldwide (CW.) 27.39p -1.55%Gem Diamonds Ltd. (DI) (GEMD) 236.00p -1.54%Rank Group (RNK) 129.00p -1.53%