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Gold surges, shares drop as January slumber lifts
by Chris Marshall on Jan 23, 2014 at 17:24
EasyJet’s figures were more impressive, with the budget airline delivering a 7.7% rise in quarterly revenues. But a slightly less rosy outlook from the airline’s management for the first half of 2014 led some brokers to call time on the airline’s strong share price run.
‘Whilst we continue to remain hugely optimistic about the long term prospects of this business, in the near term we expect the shares to pause for breath,’ said Gert Zonneveld, who was among analysts switching from a ‘buy’ to ‘hold’ recommendation for Easyjet.
At the other end of the index, Marks & Spencer gained 3.2% to 496p after analysts at BNP Paribas upgraded the stock to ‘outperform’
SSE managed a small gain, up 0.6% to £13.24, after the energy provider said it expects its profits to increase by 8.8% to £1.54 billion this year.
Thankfully, there was some decent European economic data to offset these poorly-received corporate updates.
The euro shot up by 0.6% to $1.3634 after the euro-zone composite PMI rose again in January, up by 1.2 points to 53.9, suggesting that the region’s weak recovery is slowly gathering pace.
Less positive was a report showing Spain's already high unemployment rate inched up in the fourth quarter.
Christoph Weil, economist at Commerzbank, said the currency was bloc was still recovering ‘painfully slowly’, although today’s PMI reading ‘should put a slight damper on the expectations of further monetary policy easing by the ECB.’
There was more poor economic news from China, with HSBC’s Flash PMI Index for the manufacturing sector in China falling sharply in January to 49.6. That takes it below the 50 figure which indicates expansion, and adds to other recent disappointing data on the Chinese economy suggest a faltering of momentum ahead of the Chinese New Year.
The FTSE 100 has barely budged over recent days, maintaining that trend on Thursday, flat at 6,822. So far in 2014, the index has gained 1.2% despite concerns about whether company earnings will justify high stock valuations, China’s growth and the path the US Federal Reserve will take towards ending its stimulus scheme.
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