Greek bail-out fails to excite the City

By DOMINIC JEFF
Published on Wednesday 22 February 2012 02:31

FTSE 100 CLOSE 5928.20 -17.05

Miners were among the few risers yesterday as markets were underwhelmed by the details of the latest Greek bail-out deal.

Deutsche Bank raised earnings forecasts within the sector to include upgraded base metal price expectations for 2012.

It said: “Improved economic data in the US, a growing sense that a resolution in Europe is not too far off and expectations that China will avoid a hard landing have all lent to a low-volume drift upwards in metals prices.”

Multi-metals group Vedanta Resources topped the FTSE 100 risers’ board, with rumours that the miner might restructure its international business to save costs. Its shares added 7 per cent, or 95p, to 1,453p, while peer Anglo American advanced 25.5p at 2,715.5p.

Britain’s top index was 17.05 points lower at 5,928.2, a fall of 0.3 per cent, after the Greek bailout deal came alongside a cautious report on the struggling country’s economic prospects.

The banking sector was hit by the uncertainty, with Royal Bank of Scotland down 0.3p at 28.2p and Lloyds Banking Group 0.6p lower at 35.8p.

Tullow Oil sank to near the bottom of the FTSE 100 despite announcing that an exploration well in Sierra Leone had discovered hydrocarbons – a sign that crude oil could be present. Analysts said the company suggested more work would be needed to understand the commercial value of the find. Shares were 58p lower at 1,543p.

Aberdeenshire-based Xcite Energy fell 10 per cent to 139p as investors took their profits from its recent stellar run of form. The North Sea explorer, which had added more than 70 per cent to its market value over the previous two weeks on expectations of an announcement, finally obliged on Monday with a large hike to its audited reserves.

New York: Wall Street ended little changed last night, paring gains after the Dow rose above 13,000 for the first time since May 2008, and as higher oil prices threatened prospects for the economy.

The Dow Jones industrial average ended up 16.12 points, or 0.12 per cent, at 12,965.99 while the broader Standard & Poor’s 500 Index closed up 1.00 point, or 0.07 per cent, at 1,362.23. The Nasdaq Composite Index ended the day down 3.21 points, or 0.11 per cent, at 2,948.57.

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