View the article online at http://citywire.co.uk/money/article/a628021
Markets reverse on lacklustre US earnings
FTSE 100 closes flat as disappointing figures from US earnings season hold back markets and Spain faces hurdles to bank bailout.
Britain’s markets failed to provide a fifth consecutive day of gains, as poor earnings in US technology stocks disappointed, casting doubt on the strength of earnings forecasts amid a brighter economic outlook.
The FTSE 100 shed 0.36%, or 21 points, to 5,896 and the Mid-250 index added 0.06%, or seven points, to 12,078.
Aggreko (AGK.L) fell to the bottom of the FTSE 100, down 165p, or 7.17%, to £21.37 as the temporary power provider issued a profits warning. The group blamed bad debt and unstable currency markets for a 2.5% cut in its earnings forecasts, down from £377 million to £365 million.
Property group Hammerson (HMSO.L) took on 7.3p, or 1.53%, to 483p as it acquired four retail parks for £254.5 million through the Junction Unit Trust. The purchase is expected to boost Hammerson’s earnings per share by 5% from 2013.
A meeting of European leaders threw up more hurdles to using the eurozone’s bailout fund for recapitalising banks. The development means that Spain may not be able to further bolster its indebted banking sector, after receiving a pledge of €100 billion (£81 million) to bail out its banks.
Spanish markets fell further as the Balearics requested a bailout, making it the sixth region in the indebted Iberian country to request help from its central government. The IBEX 35 index shed 2.15% to hit 7,926 points.
Other stock markets in Europe also had a day of weak trade: Germany’s DAX index lost 0.92% to 7,368, France's CAC 40 index gave up 1.09% to 3,496, and the FTSEurofirst 300 index of top European shares shed 0.83% to 1,111.
On Wall Street markets tipped down following yesterday’s shock earnings miss from Google, which added to the poorly received numbers published by other big technology companies Microsoft, Intel and IBM.
The Dow Jones Industrial Average lost 1% to 13,415, the Standard & Poor's 500 index gave up 1% to 1,442, and the Nasdaq Composite index dropped 1.4% to 2,694.
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by Himanshu Singh on Jul 25, 2014 at 04:17