Markets: Investors run for the safe havens

By DOMINIC JEFF
Published on 23/06/2012 03:30

Cruise liner firm Carnival sank lower yesterday after the firm admitted that it had to discount heavily to tempt passengers back on board after the Costa Concordia tragedy.

Its shares lost 4 per cent at 2,174p as the wider market suffered a second consecutive day in the red.

Michael Hewson, senior analyst at CMC Markets, said: “European markets struggled to reverse the late sell-off in New York trading on Thursday night but managed to recover off their lowest levels of the day.” The FTSE 100 index was down 52.7 points at 5,513.7 as weaker-than-expected business climate data from Germany fuelled fears over the global economy.

Heavily weighted commodities companies were the worst impacted, with Fresnillo the biggest faller, down 74p to 1,418p.

Defensive sectors were the beneficiaries, with healthcare stocks popular and pharmaceutical giants Shire and GlaxoSmithKline amongst those making gains. Shire was up 1 per cent at 1,966p, and GSK added 4p to 1,476.5p.

But the banks shrugged off overnight ratings downgrades to place themselves among the top performers. Banking shares had been sold off on the rumour but rose after Moody’s one-notch ratings cuts, with Lloyds the best performer after the agency praised its improving momentum and gave it a different, less immediate downgrade.

Outside the top flight, the decline in sentiment hit Scotland’s oil companies, with Cairn down 5.2p at 254.5p, and Bowleven shedding 1.7p at 59.8p. Energy services firm Wood Group was the worst hit, down nearly 6 per cent or 40.5p at 667p.

A downgrade for FTSE 250 recruitment firm Michael Page International sent the group’s stock into the red, down 4 per cent, or 16.3p, to close at 365.8p.

NEW YORK: Oil prices recovered from 18-month lows as investors shifted their focus to efforts to resolve Europe’s debt crisis, while US stocks rebounded from their second-worst decline of the year to move into the black.

Led by gains in banking shares, the broad market rallied.

The blue-chip Dow Jones Industrial Average closed 67.21 points higher at 12,640.78 after Thursday’s hit of 250 points.