(17:15 market update) Long-suffering investors in Man Group (EMG.L) were dealt a rare piece of good news today as the hedge fund’s shares rose nearly 5% to 77p on the announcement that chief executive Peter Clarke would be replaced by Emmanuel Roman.
Roman, who is currently president and chief operating officer, will take on the top role at the end of February. Investors will be hoping he can stem the outflows from the company’s funds.
Man topped the FTSE 100, which had managed to break out into positive territory after a morning in the red (see report below). Buoyant US markets – both the Dow and S&P 500 were showing small gains at 13,186 and 1,419 respectively – helped the London index to small gains, ending the day 7 points higher at 5921.
FTSE dips as Monti's resignation revives euro worries (11:20 update)
The UK stock market started the week on a downbeat note after Italian prime minister Mario Monti said he would resign, paving the way for a possible return to power of Silvio Berlusconi (pictured above), the former premier convicted of tax fraud in October. Discouraging economic data from China and Japan further unsettled investors.
Financial and mining stocks saw the FTSE 100 drop 0.3%, or 20 points, to 5,893 as the decision by Monti (pictured below) to step down once his government's budget is passed cast doubt on the country’s ability to continue his reforms and extricate itself from the debt crisis.
His move came days after Silvio Berlusconi's People of Freedom party withdrew its support for Monti's technocratic government and the media magnate and former premier said he would run for office again.
The prospect of another general election and political upheaval saw Italy’s stock market plunge 3.4% as the FTSE MIB index dropped 535 points to 15,164. Meanwhile the cost of the country's borrowing surged with yields on Italian 10-year bonds stretching more than 3.5% above Germany’s, although still a long way off from last year's highs..
The Euronext 100 index dipped over three points or 0.5% to 675 as a drop in Germany’s trade surplus added to the gloom over the eurozone.
On currency markets the euro held up, following last week's heavy falls, trading slightly higher at $1.2909 against the dollar and £1.6044 against the pound. The pound firmed to $1.6045 against the dollar.
Also weighing on sentiment was the latest data from China which showed exports growth slowing to 2.9% in November, well below forecasts of a 9% rise, a result of the recession in Europe and the weak recovery in the US.
The weakness of the global economy was underlined by figures showing Japan had entered a technical recession after its gross domestic product (GDP) shrank by 0.9% in July-September. Revised figures show Japan’s economy shrank by just 0.03% in the previous quarter.
In London eurozone fears made Aviva (AV.L) the biggest faller with the insurer's shares down 2.6% or 9.6p to 356.7p. Investment supermarket Hargreaves Lansdown (HRGV.L) followed suit, down 2.3% at just over 718p. ENRC (ENRC.L) fell 5.6p or nearly 2% as chairman Mehmet Dalman expressed confidence of an 'amicable conclusion' to the allegations of corruption facing the Kazakh miner. Rolls Royce (RR.L) fell another 15p or 1.7% to 881p in response to the bribery probe announced by the Serious Fraud Office on Friday.
Associated British Foods (ABF.L) led the FTSE 100 with a 1.1% gain to £15.02 on further consideration of its encouraging trading statement to the annual general meeting on Friday.
Greggs (GRG.L) fell 13p or 2.6% to 474p after chief executive Ken McKeikan quit the baker to become boss at Brakes, the catering supplier owned by private equity firm Bain Capital. McKeikan hit the headlines earlier this year when he led a successful campaign against the chancellor's 'pasty tax'.
De La Rue (DLAR.L) shed 15p or 1.6% to 921p on reports the Bank of England could put a £1 billion bank note printing contract out to tender.
Pearson (PSON.L) dropped 2p to £11.75 after the New York Times reported Michael Bloomberg, New York city mayor and owner of the financial data company that bears his name, could bid for the Financial Times division owned by the education group.
Imagination Technologies (IMG.L) dipped 4.4p or 1% to 436p after the chip designer and Citywire Top Stock upped its bid for MIPS Technologies of the US to $80 million (£50 million) from $60 million to counter a rival bid from Ceva.
Among smaller companies Nature Group (NGRP.L), the AIM-listed maritime waste company, plunged 31% after an operational review begun by its new chairman Nigel Sandy revealed profits for this year would be well below market expectations as a result of contract delays.