LONDON (ShareCast) - 1630:Close The Footsie closed modestly higher on Friday, led by TUI (Xetra: TUAG00 - news) which saw its shares recover after the stock plummeted earlier in the week following the news that it no longer intended to merge with parent TUI AG. Positive comments from analysts at Barclays (LSE: BARC.L - news) and Citi also helped. Meanwhile, miners tracked metal prices lower, with ENRC, Randgold, Evraz, Kazakhmys (LSE: KAZ.L - news) , Rio Tinto (Xetra: 855018 - news) and BHP Billiton (NYSE: BBL - news) all making it into the top 10 biggest fallers. Risk appetite was dampened by the news that the UK economy contracted by 0.3 per cent during the fourth quarter of 2012, worse than the 0.1 per cent GDP decline forecast. The FTSE 100 closed up 20 points at 6,284.
1627: Enormous price swings in Afren (LSE: AFR.L - news) 's share price today on unusually high trading volumes. "Personally, I cannot remember the last time I saw such heightened volatility in the share price of a 1bn pound plus company without being able to account for it with a reasonable probability of being correct. On Wednesday shares of Afren shot up on ten times their average recent daily trading volume. No less impressively, on Friday they surrendered most of that move on even larger trading volumes. There are quite a few stocks seeing such patterns recently (reflecting a degree of indecisiveness in the broader market perhaps?), but the magnitude of Afren's price moves are quite unusual. There is 'market chatter' to the effect that a large oil major - Exxon Mobil or Sinopec - could be sizing up the company, but no one quite seems to know what is going on. Another line of thought holds that traders may have been speculating with an oil find in Kenya," comment analysts at Digital Look.
1500: Existing home sales in the US fell in December to an annualised rate of 369,000, after a reading of 385,000 in the previous month (revised up from a preliminary reading of 377,000). FTSE 100 (FTSE: ^FTSE - news) up 17 to 6,281.
1441: In London, Polymetal is one of the biggest risers on speculation that it could merge with Polyus Gold. UBS (Berlin: UBRA.BE - news) upgraded the former to 'buy' this morning, saying 'now is the right moment to use weakness in the stock price as potential merger with Polyus Gold may be a strong driver'. Meanwhile, Credit Suisse (NYSE: CRP - news) said that a tie-up could lead to a re-rating: the broker said: 'A combined company would have better liquidity, a larger share in the index, a wider investor base and would sit among the global gold majors'.
1418: The FTSE 100 is up 13 points at 6,278 ahead of the US open, with futures pointing to small gains on Wall Street in just over 10 minutes' time. Housing data is on the agenda this afternoon in the States with expectations for a 2.1 increase month-on-month in new home sales in December, compared with the 4.4 rise the month before. Sales are forecast to have increased to a seasonally adjusted annual rate of 385k, up from 377k previously.
1100: Banks will repay 137.2bn euros of their 3 year long-term loans on January 30th, the European Central bank has just announced. Roughly 84bn euros was the amount expected. 278 banks will participate.
1055: This is Barclays's take on today's GDP report "Smoothing through the choppiness using year-on-year comparisons, a clearer picture of the state of the economy emerges, and it is not a pretty sight, economists at Barclays are saying. The construction sector has experienced a dramatic double dip (down some 11% year-on-year in the fourth quarter), almost of comparable size to that when the global financial crisis first hit." Interestingly, they point out how the fall in manufacturing is not a development that can be solely attributed to the euro area malaise, as UK exporters have also lost market share in non-EU markets. The service sector remains the sole source of growth, but even this is meek, at less than 1.5% compared with a pre-crisis average of around 4%, they add.
1019: Analyst Simon Hayes from Barclays Research said that the UK growth data (-0.3 per cent quarter-on-quarter) this morning disappointed already-low expectations of a 0.1 per cent contraction. He said: 'We estimate that an unwinding of the boost to Q3 GDP from the Olympics subtracted about 0.2 percentage points from the Q4 growth rate, but today's estimate implies that underlying growth was still marginally negative.'
0944: The FTSE 100 has pushed into positive territory and is now trading five points higher at 6,230 despite the worse-than-expected UK GDP figures. Market chatter is now speculating that a 'triple-dip' recession would be on the cards, after the economy pulled out of a small 'double-dip' in the third quarter of 2012. Sterling, which was at around 1.58 against the dollar earlier in the day, dropped to 1.5747, while yield on a 10-year UK gilt is up 1.5 basis points at 2.024 per cent.
0930: Gross domestic product (GDP) contracted at an 0.3 per cent quarter-on-quarter rate in the last three months of last year, according to ONS. UK fourth quarter mining output dropped by 10.2 per cent, the biggest fall on record.
0900: The IFO Institute's business climate index for the month of January has risen to 104,2, from 102,4 in the previous month. The consensus estimate was for an increase to 103,0. European Central bank President Mario Draghi is slated to speak this morning, at 09:30.
0848: Ahead of this morning's GDP data economists at Barclays Research are highlighting the fact that "the range of economists' forecasts in the Bloomberg survey is fairly wide, ranging from +0.1% to -0.5%, and preliminary GDP has been a recurrent source of surprise to financial markets in recent years." They also note that by their estimates an unwinding of the effect of the Olympics in the third quarter will subtract about 0.2 percentage points from fourth quarter growth. Thus, their expectation is in fact consistent with a modest underlying expansion. FTSE 100 down 8 to 6,257.
0847: UK stocks have begun the day with a small probe lower, following yesterday's sharp gains. IAG is in the lead, continuing to benefit from relatively stable fuel prices and an improving outlook for traffic on its transatlantic routes. Anglo American (LSE: AAL.L - news) 's fourth quarter production update showed that strikes held back production of platinum and iron ore at Anglo American in the fourth quarter of 2012, though most other commodity classes delivered 'solid' increases in output. On tap for this morning is the German IFO Institute's business climate index for January, at 09:00, followed by fourth quarter GDP data from ONS at 09:30. US equity futures are steady in overnight trading.