Market overview: Traders and media fixated on US fiscal cliff kabuki



LONDON (ShareCast) - 1630:Close The Footsie closed near its best levels of the session as the mood on Wall Street improved following concessions by the White House over the issue of lowering entitlement spending. Miners did well - generally speaking - as the atmosphere at trading desks turned 'risk-on'. Some market commentary also highlighted the recent draw-down in excess iron ore inventories as Chinese demand have come back. The consumer price index for November (Xetra: A0Z24E - news) rose at a 2.7 per cent year-on-year rate of change, as expected. Trading volumes are already being described as on the wane as Christmas approaches. FTSE 100 (FTSE: ^FTSE - news) up 24 to 5,936.

1541: Central Europe-focused hard coal and coke producer New World Resources has surged on the FTSE 250 (FTSE: ^FTMC - news) after the International Energy Agency (IEA) said that coal will come close to surpassing oil as the world's top energy source by 2017. According to the IEA's Medium-Term Coal Market Report, the world will burn around 1.2bn more tonnes of coal per year by 2017 compared to today, equivalent to the current coal consumption of Russia and the United States combined. Shares are up nearly 10 per cent.

1444: The FTSE 100 has held on to gains and is trading up 21 points at 5,933 following a positive start on Wall Street. However, gains for stocks in the US have been only slight after Republican senator Bob Corker told CNBC today that 'we're not close to a deal'. In London, temporary power and temperature control solutions group Aggreko (LSE: AGK.L - news) is now leading the risers on the FTSE 100, shrugging off a downgrade by Espirito Santo (to 'neutral') and several target price cuts from other brokers (including JP Morgan Cazenove, Morgan Stanley (Xetra: 885836 - news) and UBS (Berlin: UBRA.BE - news) ), as it attempts to rebound after yesterday's steep falls. The stock finished yesterday's session down 21.69 per cent after warning that revenues in 2013 would likely be lower than this year. The shares have risen just 3.4 per cent today.

1337: Ratings agency Fitch has reaffirmed Centrica´s long-term debt rating at A with a stable outlook.

1330: The US third quarter current account deficit decreased to 107.5bn dollars, after a reading of 118.1bn dollars for the previous quarter (Consensus: 103bn dollars).

1040: Also providing a lift to G4S (LSE: GFS.L - news) is the FT's article today titled 'G4S set for welfare reform role' which suggested that the company is one of six selected to bid for welfare-benefit call-centre contracts worth 150m pounds over four years. Seymour Pierce said that this 'puts to bed any idea that the government is having cold feet on outsourcing following G4S's Olympic (BSE: OLPCL.BO - news) problems'. Other potential bidders include Serco and Capita (LSE: CPI.L - news) . FTSE 100 up 20 to 5,932.

1009: Security group G4S is now leading the risers on the FTSE 100 index, up over three per cent. Panmure Gordon this morning upgraded its rating for the stock rom 'hold' to 'buy', saying that the stock could rebound following recent underperformance. 'We think there is scope for the shares to recover back to its pre-Olympic peak, and do not subscribe to the view that the UK Government outsourcing market is firmly shut for the company [...] As the outsourcing sector has continued to re-rate, G4S has stood still presenting an attractive entry point heading into 2013E in our view.' JPMorgan Cazenove also reiterated its 'overweight' rating for the shares this morning. Miners continue to provide a lift in London as they track metal prices higher on the back of the weaker dollar (due to lower risk aversion), as hopes increase that US law-makers can work together so as to avert the 'fiscal cliff'. The FTSE 100 is up 24 points at 5,936.

0950: Tesco (Other OTC: TSCDY - news) is moving closer to appointing a UK chief executive, which could come in the early months of next year, the Financial Times reported on Tuesday.

0949: This is part of what Barclays Research is commenting following today´s CPI (Other OTC: CPIC - news) release: "While pressures from petrol prices have receded during the fourth quarter, we expect the bulk of announced gas and electricity price increases to take effect between December and February, maintaining the upwards pressure on inflation. Tuition fee increases are also likely to provide a sustained source of upwards momentum over the next three years, while we expect low productivity and the resultant strong unit labour costs to cut into firms' margins, leaving them with little room to trim prices in response to weak demand. As a result, we expect CPI inflation to remain above the 2 per cent target over the near to medium term."

0948: The Spanish Treasury´s auction of 3.5bn euros in bills has gone off without a hitch, with yields coming down and bid-to-cover ratios moving higher. That despite data out earlier in the morning which showed Spanish banks´ bad loan ratio rose to 11.23 per cent in October, after a reading of 10.71 per cent for the previous month.

0931: UK factory gate inflation fell to a 2.2 per cent year-on-year rate of increase, after a 2.6 per cent advance in the previous month (Consensus: 2.5 per cent).

0930: The consumer price index for the month of November has come in at a 2.7 per cent year-on-year rate of change (Consensus: 2.7 per cent).

0835: UK stocks have begun the day trading moderately higher, following concessions by US President Barack Obama aimed at getting the fiscal cliff talks going on Capitol Hill. As a result, all of a sudden the market seems awash in positive commentary regarding the outlook for the same. Carnival Cruise Lines is now leading gainers on the Footsie ahead of its full year results this next Thursday. Whitbread (LSE: WTB.L - news) is also doing well and adding to its already formidable gains for the year. Miners are also near the top of the leader board. Oilfield services giant Petrofac has reiterated its target of achieving net profit growth of at least 15 per cent this year, saying that operations continue to perform in line with expectations. November consumer price inflation data are released at 09:30. Consensus expects the CPI to have remained unchanged at a 2.7% year-on-year rate of change. UK households have reined in spending owing to a fear that they will be unable to repay debts or get access to additional credit, according to survey data from the Bank of England. FTSE 100 up 19 to 5,932.