FTSE pauses for breath as Morrisons shares are placed
The FTSE 100 has paused for breath are its recent surge which put it within touching distance of an all time record. The record was set in December 1999, when the dot com bubble was in full swing with no signs of bursting, reaching 6930. While the pause for breath is a sign of investors locking in profits from the recent rally, many analysts predicted that the markets will press on.
The FTSE was down by 0.6 percent at 12:38pm local time, resting at 6,800.10 after clawing back almost 19 points from its price of 6781.88 at 10:00am. While the decline undoubtedly caught some investors off guard, consistent talk of correction over the last fortnight and beyond has kept the markets in a somewhat cautious state of mind.
Also playing on their mind will be the IMF’s verdict on the state of the UK economy. While the signs have been fairly positive, the comments that come from the announcement will have a profound effect on todays session.
Despite the cautious tone reverberating around the floor, miners continued to claw back their declines from earlier in the week. Antofagasta PLC put 2.65 percent onto their price, rising by 25.50 to 989.50, while Randgold Resources PLC and Fresnillo PLC added 1.91 percent and 1.71 percent respectively. Anglo American PLC added 1.54 percent, BHP Billiton PLC 1.16 percent and Rexam PLC completed to notable gains with a rise of 1.04 percent.
Banks also performed well, lead by the Royal Bank of Scotland Group PLC, which also lead the FTSE in gains with an advance of 2.75 percent. Lloyds Banking Group PLC and Barclays PLC advanced by 2.16 percent and 1.16 percent respectively.
On the other end of the scale, grocery retailer Morrisons saw a decline of 2.77 percent after it emerged that 100m shares had been placed on the market at 280p per share. While the seller is yet to be confirmed, the volume represents a 2 percent stake in the company and singled that the seller perhaps felt Morrisons was overvalued by 3 percent. Morrisons recently acquired online grocery retailer Ocado, market leaders of a sector that is not expected to break even for another five years. It’s thought that this could have been the trigger for placing.