Blue-Chips Close Flat as Investors Await Further Impetus

WEDNESDAY MARKET UPDATE: A lacklustre session for large-caps as Mervyn King's economic assessment offsets hope China's slowdown is bottoming out

Holly Cook 24 October, 2012 | 6:26PM
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After Tuesday's dramatic falls, investors on Wednesday chose to pause for breath and await further impetus before turning investing sentiment into trading action. As such, UK blue-chips saw little overall movement while mid-caps suffered a minor decline.

The FTSE 100 index closed 7 points firmer at 5,805, but the FTSE 250 index slipped 29 points to settle 0.2% lower at 11,863.

A negative start in the previous session was exacerbated by substantial falls on US markets in afternoon deals, but in today's session Asian indices recovered on the back of encouraging economic data. China's manufacturing PMI revealed an upturn compared to the prior month, offering hope that it will soon reverse a year of contraction and that the Chinese economy's slowdown may be close to bottoming out. 

Rumours that eurozone leaders have given Greece until 2016 to meet its debt-to-GDP ratio back in line also offered support. 

Counteracting these positive inputs was last night's speech from Bank of England governor Mervyn King, in which he implied that quantitative easing may soon fail to supply the economic stimulus it is intended to produce. 

In London, ARM Holdings (ARM) continued to top the charts, rising a further 5.6% on top of Tuesday's 7.7% jump as brokers upgraded the stock following solid earnings results.

Meanwhile, after Tuesday's widespread losses, mining stocks were back in demand, with Kazakhmys (KAZ), Evraz (EVR) and Eurasian Natural Resources (ENRC) each climbing 2.7%-4.0%.

On the downside, AMEC (AMEC) slipped 2.9% as the company bought back 200,000 own shares to hold in treasury.

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Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites

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