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Markets: Cautious FTSE 100 edges lower on Tuesday

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Share this Interactive Investor's Market Report brings you bite-sized news covering all the day's FTSE and AIM announcements, the latest on commodities, global and domestic economics, gold, oil and currencies as well as US markets. Updated throughout the day, it's the digest you can't afford to miss.

Last updated: 17:15

UK markets: Tuesday's close

The FTSE 100 (UKX) clocked up solid double-digit losses on Tuesday after unenthusiastic investors were hit with weak economic data from the US, which pushed the index to its lowest levels for a month.  

The blue-chip bourse closed 86.40 points down at 5672.01 with Morrisons (MRW) ending the day at the top of a very slim group of winning stocks, up just 0.2%, while ARM Holdings (ARM) and Evraz (EVR) remained in the red.

Impellam Group (IPEL) led AIM stocks lower, closing almost broke, while Avia Health Informatics () was 28% higher.

Chariot Oil and Gas (CHAR) remained the story of the day for Interactive Investor customers who bought twice as much of the stock as they sold, clocking up high volumes. Hibu (HIBU) also remained high in the list of favourite buys while Gulf Keystone Petroleum (GKP) was widely sold.

"Manufacturing figures in the US showed contraction for the third month on the trot as the factory index hit a three-year low. After spending the majority of recent weeks focusing on promises from politicians and expecting action from the central banks, this sort of data forces traders to focus back on the real economy - and the signs are still not encouraging," cautioned David Jones, chief market strategist at IG Index.

He believes that with many feeling that the rally over the last three months, which has seen the FTSE 100 rise by around 10%, has been built on sand, the moves on Tuesday could well be the sign of the market returning to its more volatile and slightly nervous pre-summer state.

"Also injecting some volatility into the last hour was the release of UK services data. This was surprising for a couple of reasons - firstly because it was better-than-expected, and secondly because it wasn't actually meant to be officially released until Wednesday morning. Market chatter was suggesting a 'fat finger' incident at one of the newswires and although it did provide a brief relief from the decline, the positive effect has not lasted long," said Jones.

At a glance...

Currencies Commodities
GBP/USD: 1.5890 Gold: $1,692.60
GBP/EUR: 1.2644 WTI crude oil: $95.31
EUR/USD: 1.2562 All changes from 09:00 BST.







US markets: 16:40 update

US stocks headed south on Tuesday as manufacturing data disappointed.

Manufacturing had its steepest fall in three years, once again raising concerns about the state of the economy.
The Dow Jones fell 87 points to 13003, while the Nasdaq dropped 20 points to 3046. The S&P 500 fared little better as it lost seven points to 1399.

Revenues grow at Ubisense

Revenues at Ubisense (UBI) rose by 6.2% to £12 million in the first half of 2012.

As a result of continued investments, adjusted EBITDA for the period was a loss of £200,000 compared to a profit of £400,000 for the same period last year.

The company said it has continued to invest significantly in its long-term strategy through product innovation, marketing, recruitment and strategic partner programmes.

China Food notes sale delay

China Food Company () said the sale of its animal-feed business to Wisehand Planning is still awaiting regulatory approval.

It said Wisehand had completed due diligence and the first-stage payment of $4.5 million (£2.8 million) for the Fuss Feed deal should be made when regulatory approval is received.

China Food said that as previously announced, the approval was taking longer than anticipated and the board will provide a further update when the timetable becomes clearer.

Lo-Q partners with Sanderson

Theme park queuing specialist Lo-Q () has signed a partnership agreement with Sanderson Group (SND) to help spearhead Lo-Q's expansion into the exciting and fast-growing Asian marketplace.

Sanderson Group is an Australian multinational corporation with over 23 years experience in delivering high-quality, themed tourist attractions.
It is led by an experienced team with an office network that spans nine countries across Asia, the Middle East, and Australia Pacific.

UK markets: 15:05 update

The FTSE 100 (UKX) slipped further on Tuesday, losing 63 points to 5694.

The woes of Vodafone (VOD) had a knock-on effect on the market after the company was downgraded by brokers. Poor construction figures further dampened spirits as data showed new orders fell last month.
Petrofac (PFC) remained top of the stack, climbing 1.2%, while Xstrata (XTA) lost 2.9%.
On AIM, Avia Health Informatics () was on fine form, as it lifted 29%. Impellam (IPEL) shares crashed as the stock lost nearly all of its capitalisation.
Chariot Oil and Gas (CHAR) was the most popular stock among Interactive Investor users, with twice as many buying as selling.
At a glance...

Currencies Commodities
GBP/USD: 1.5876 Gold: $1,691.70
GBP/EUR: 1.2629 WTI crude oil: $96.62
EUR/USD: 1.2574 All changes from 09:00 BST.







US markets: Tuesday's open

US stocks opened slightly lower Tuesday ahead of data on American manufacturing and as European leaders prepared for discussions on the region's debt crisis.

The Dow Jones plunged 25 points to 13064 as the S&P 500 edged just over half a point lower to 1405 and the Nasdaq shed two points to 3064.

Stadium shrinks

Profit and revenue fell at Stadium Group (SDM) in the half year to 30 June as a result of timing issues surrounding two major projects.
Revenue slid to £20.9 million, from £23.2 million a year ago, while there was a 63% decline in pre-tax profit.
The interim dividend remained unchanged at 1.05p, payable on 12 October 2012.
The company also used up some of its cash reserves, which fell to 1.5 million from £3.7 a year ago.

The company also announced the acquisition of the entire issued share capital of IGT Industries, a profitable designer and manufacturer of intelligent displays for the professional electronics market, for a maximum cash consideration of £4.2 million.

Eastern European Property Fund stumbles

Net asset value at Eastern European Property Fund (EEP) fell by 4.9% to £21.2 million in the six months to 30 June.
The value of the profit held by the firm also dropped, falling to £30 million from £32.2 million a year ago. The firm slumped to a loss of £1 million, following a profit of £1.3 million during the same period in 2011.
Since the period end, the company has sold property worth $8.5 million (£5.4 million), securing a gain, based on historic cost, of approximately $5 million.

Record year boosts divi at Genus

Animal genetics specialist Genus (GNS) has posted record full-year results with strong growth in revenues and adjusted pre-tax profits.

Revenues rose 10% to £341.8 million while adjusted pre-tax profits rose to £46.5 million for the year to the end of June - 19% up in actual currencies.

The dividend increased 10% to 14.6p.

Banks must avoid repeat of systems failure

Compensation for customers affected by the computer failure at Royal Bank of Scotland (RBS) must be "clear and straightforward" according to Andrew Tyrie MP, the chairman of the Commons Treasury Committee.

He added that other banks should be checking their IT systems.

His comments follow the software upgrade failure for which RBS has already set aside £125 million in compensation.

"Every bank should be checking its IT systems. We need to have confidence that such a failure cannot happen again," Tyrie said.

African Barrick Gold readies itself for takeover

African Barrick Gold () has formed a transaction committee to prepare for a possible takeover.

Get the full story, along with news from five other miners, in: Tuesday's mining news.

West coast delay for FirstGroup

FirstGroup (FGP) will see its takeover of the West Coast main line rail franchise delayed after legal action by current operator Virgin.

Virgin has run the West Coast Main Line since 1997, but lost out to FirstGroup, prompting it to demand a review.

The Labour party had also urged the government to defer signing the contract so that MPs could examine it and more than 165,000 members of the public have signed a petition calling for the decision to be reviewed.

Shell assesses oil E&P in Black Sea

A good day for oil and gas companies saw Royal Dutch Shell (RDSB) stating that it was assessing opportunities in the Black Sea, while test results from Ithaca Energy (IAE) were successful.

Read: Tuesday's oil and gas news, to see what they, and four other companies, had to tell investors.

Chariot notes share slump

Chariot Oil and Gas (CHAR) on Tuesday released a statement noting the fall in its share price.

Shares in the company plunged almost 20% in morning trading, amid rumours that there was profit taking and news of a duster on Nimrod was imminent.

For more, read: Wheels come off Chariot amid market rumours.

Empty shops on the rise

The number of empty shops increased in every part of the UK apart from London between January and June, according to figures compiled by the Local Data Company (LDC).

An average of 14.6% of shops were empty - the LDC said this was partly due to a dramatic drop in consumer spending, which it calculated was back at 2002 levels. Higher online sales and retail space expansion were also factors.

Ashtead off to a flyer

Plant-hire firm Ashtead (AHT) delighted investors by raising its profit guidance for the second time in as many months, as its new financial year got off to a flying start.

"The markets in which we operate have performed as anticipated, with gently improving conditions in the US and a more challenging outlook in the UK. We do not anticipate any significant changes to this environment in the short term," commented chief executive Geoff Drabble.

For more, read: Ashtead hikes profit guidance.

UK markets: Midday update

The FTSE 100 (UKX) lingered in the doldrums on Tuesday, as jitters set in ahead of key events later in the week.

London's leading share index slipped 49 points to 5708.

Evraz (EVR) declined over 2%, while Petrofac (PFC) added more than 1.5%.

On AIM, Impellam Group (IPEL) lost almost all of its value. Shares in ClearDebt (CLEA) soared 32%.

Chariot Oil and Gas (CHAR) was the most actively-traded stock by the users of Interactive Investor.

"With the keenly-awaited European Central Bank meeting getting closer by the day, this week was always going to be susceptible to a tug-of-war between the bulls and bears," stated Chris Beauchamp, market analyst at IG Index. He pointed out that low trading volume was not doing anything to help the situation, with any trading exacerbating the moves in either direction.

He added: "Moodys' decision to cut the outlook for the EU's credit rating to negative underscores how pernicious the crisis has become, but the general opinion still seems to be that something fairly substantial will be unveiled on Thursday."

Looking ahead, the US will publish its ISM manufacturing index for August. Beauchamp expected markets across the Atlantic to start the day positively, with the S&P 500 up two points at 1407.

At a glance...

Currencies Commodities
GBP/USD: 1.5875 Gold: $1,690.40
GBP/EUR: 1.2611 WTI crude oil: $97.26
EUR/USD: 1.2586 All changes from 09:00 BST.







Monitise doubles up again

Mobile payments company Monitise (MONI) has increased its revenue twofold for the third year running.
The AIM-listed firm grew sales by 136% to £36.1 million in the year to 30 June and said it intends to match that phenomenal growth this year.
Registered customers passed 17 million, compared with 4.5 million a year ago.
Gross margins increased to 66% from 62% in 2010/2011, with margin improvement in both development revenues and user-generated revenues.
However, there was a group operating loss of £13.7 million, up from £12.8 million a year ago, reflecting higher depreciation and amortisation resulting from peak investment made in scaling the capability of both the Monitise Enterprise Platform and in service delivery over the past two years.

Return details announced by Micro Focus

Micro Focus (MCRO) has released details of its £82 million cash return to shareholders.

The firm said the 50p-per-share return would be made through an issue of B Shares and/or C shares, which would enable shareholders to elect to receive the proceeds as either income or capital, or any combination of the two.

The first option for shareholders is for every existing ordinary share held at 18:00 on 25 October 2012, 50p will be returned through the issue of one B share, which will then be redeemed by the company.

The second choice for shareholders is to take one C share for every share they hold, on which a dividend of 50p will be paid or which will be purchased by Numis at 50p per share under an offer to be made by them.

DS Smith on target

Packaging supplier DS Smith (SMDS) said trading has continued in line with expectations, with good corrugated box volumes in the legacy business slightly ahead of its GDP +1% target.

Smith said integration work was proceeding slightly ahead of plan at its SCA Packaging, which it bought at the end of June. It added that the €1.58 billion (£1.25 billion) deal had transformed its position in the European market for recycled packaging.

Dechra Pharmaceuticals reaffirms growth as its target

Dechra Pharmaceuticals (DPH) has reported preliminary results for the year ending June 2012, with revenues and pre-tax profits coming in at £426 million and £34.1 million respectively.

On outlook, the company re-affirmed growth as its target this year with current trading denoted "in line with expectations".

Savvas Neophytou, analyst at Panmure Gordon believes that Dechra should be a "core" holding for investors looking to introduce healthcare stocks into their portfolio. Still he has a 'hold' recommendation stating: "With the company being in an investment cycle for growth in the US, we believe the share price upside is capped for the time being until investors get better visibility of the how fast the company is achieving growth in the US".

Another Spanish region bites the dust

Andalusia has become the latest Spanish region to request a financial lifeline of €1 billion (£0.73 billion) from the central government.

It follows Valencia, Catalonia and Murcia, who have requested €4.5 billion, €5 billion and €300 million respectively in bail-out funds. The conditions which the Spanish government will impose on loans from the fund have not yet been announced.

Simultaneously, Spain said it would immediately inject €4.5 billion euros into part-nationalised Bankia, created in 2010 from a merger of seven troubled regional savings banks.

There is widespread speculation that the country will have to request a full financial rescue. Spain has already requested €100 billion of loans from the eurozone's bail-out fund to help support its banks. German Chancellor Angela Merkel is due to visit Madrid on Thursday for talks with Prime Minister Mariano Rajoy about Spain's progress in its reform plans.

Moody's lowers EU's AAA rating

The European Union's AAA credit rating has been lowered to "negative" by credit ratings agency Moody's, reflected the negative outlook for the ratings of the EU's key budget contributors, including Germany, France, Netherlands and the UK.

Moody's also warned that the bloc's rating could be downgraded, voicing concerns that in the case of "extreme stress", the AAA-rated member states were more likely to service their own debt obligations rather than "prioritise their commitment to backstop the EU debt obligations".

"It is reasonable to assume that the EU's creditworthiness should move in line with the creditworthiness of its strongest key member states," the agency said. Germany, France, Netherlands and the UK together account for about 45% of the EU's budget revenue.

Greene King's results cheers

Pub operator Greene King (GNK) has reported a solid first 18 weeks to the year with like-for-like sales up 5.1% in managed pubs, implying +3.5% in the last 10 weeks.

By product line for the 18 weeks, drink-for-like sales were up 5%, food 5.2% and accommodation 4.9%. The group believes that underlying trading trends across the business have been maintained throughout the summer and that the group's retail growth strategy will continue to deliver earnings and dividend growth.

The stock trades on a 2013 enterprise value to EBITDAR ratio of between eight and nine times and yields 4.8%. "This premium sector valuation reflects the group’s above-average returns and attractive business mix," commented Simon French, analyst at Panmure Gordon. He has a 'hold' recommendation on the stock.

No gold for retailers

Contrary to expectations in the run up to the Games, the Olympics hindered rather than helped British retailers, a survey has shown.

Retail sales contracted by 0.4% for shops that have been open for more than a year in August compared with a year ago, the British Retail consortium has said.

"The feel good factor from the Olympics failed to inspire spending," the BRC said.

And it wasn't just that shoppers stayed at home, online sales were also hit. They grew by just 4.8%, the slowest growth since records began in 2008.

New CFO for Whitbread

Whitbread (WTB) has announced that Nicholas Cadbury has been appointed as its new group finance director. He will succeed Christopher Rogers who has become managing director of Costa Coffee. Cadbury will become a member of the Whitbread board and will join the company on a date to be announced soon.

He is currently chief financial officer of Premier Farnell (PFL), which he joined in 2011. Previously, he was at Dixons Retail () in a variety of management roles, including chief financial officer from 2008 - 2011.

Commenting on the appointment, chief executive Andy Harrison said: "He brings a wealth of experience, which will be highly relevant to Whitbread as we continue to realise our ambitious plans for the business."

UK markets: 09:00 update

The FTSE 100 (UKX) dragged its feet early on Tuesday as the index knocked back the gains made on Monday. With Thursday's European Central Bank meeting looming large on the horizon investors appear to have adopted a cautious stance.

The UK's leading index fell back 28 points to 5730.

Vodafone (VOD) led the fallers, losing 1.4% , following the signing of a Middle Eastern deal. Petrofac (PFC) were the most impressive climbers, even if it did only add less than 1% to its market value.

Interactive Investor traders continued to buy up Hibu (HIBU) in quantity as the share price began to recover from yesterday's collapse.

Mike McCudden, head of derivatives at Interactive Investor, commented: "Investors have seen enough and are choosing to tread with extreme caution ahead of Thursdays ECB meeting. Expectations may be high that the ECB will deliver followed by the German Constitutional Court paving the way for the ESM, but recent history dictates that nothing quite goes to plan when Euro Zone ministers are involved, and investors are choosing to sit on the fence.

"Furthermore, it appears that China and the US are holding back in their own stimulus plans until they see some concerted action in the Euro Zone. After a bleak set of global manufacturing numbers came out yesterday, US data out today will be closely followed."

At a glance...

Asian marketsCurrenciesCommodities
Nikkei 225: 8776 ( eight)GBP/USD: 1.5903Gold: $1,693.30
Hang Seng: 19456 ( 103)GBP/EUR: 1.2606WTI crude oil: $97.13
Shanghai Composite: 2044 ( 11)EUR/USD: 1.2616 






08:00 - The FTSE 100 (UKX) opens at 5758.41