Verizon denial takes steam out of telecoms as equities pull back
European indices have pulled back from yesterday’s highs this morning following a denial from US firm Verizon that they were interested in a full takeover of UK telecommunications giant Vodafone. Having led the FTSE higher as traders bought the rumour yesterday, the stock has pulled back 2% early on this morning as investor resoundingly sell the fact.
At the other end of the index, Schroders continue their strong move after an upgrade from Numis that sees the stock up over 3%. The broker cites a 2331p price target.
The mining sector is under heavy pressure this morning after UBS cut their outlook, with global demand for natural resources already in question in light of faltering data from China. Predictably given the recent price action, ENRC find themselves bottom of the pile as the stock readies itself for a test of the 2008 lows – though down 9% on the day the move does start to look a little steep…
Electricity supplier SSE are under the spotlight this morning after a £10.5m fine from OFGEN for poor selling practices. In spite of the negative attention the stock continues to flirt with 5-year highs. Given their £14.5bn market cap it’s hardly surprising to see traders shrugging off the fine regardless of the negative press.
Flash European CPI data due at 10:00 will add colour to a mixed inflationary picture on the continent, and ADP employment numbers due from the states at 13.15 will draw attention given the rekindling of the QE debate yesterday. Given the propensity of the equity market to react either way to a big number, traders would be well advised to tread carefully around the release…
Bulls will take comfort from the resolute stance of Fed Chairman Bernanke who remains convinced that continuing asset purchases are required to underpin the US recovery.
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