London close: Stocks sink on Greek exit speculation - Life Style Extra
- BoE policy makers 'finely balanced' on more QE
- CBO warns of US recession
The FTSE 100 sunk to its lowest levels of the day by the end of trade on Wednesday as investors looked ahead to this evening's EU summit with caution as speculation increases over a Greek exit from the Eurozone.
International pressure has been mounting on Eurozone leaders to take quick action to stave off the recession that threatens the region. The European Council is holding an informal dinner Wednesday evening at 18:00 London time, where the members are expected to discuss both the situation in Greece and measures to increase growth.
Former Greek Prime Minister Lucas Papademos has said that although a Greek exit is unlikely, "it cannot be excluded that preparations are being made to contain the potential consequences" of such a scenario. He later clarified that he has no specific knowledge of any countries of institutions making contingency plans but could not "exclude the possibility".
According to an article by Reuters this afternoon, three officials of the Eurogroup Working Group (EWG) have said that countries should be planning for a Greek exit. "The EWG agreed that each Eurozone country should prepare a contingency plan, individually, for the potential consequences of a Greek exit from the euro," one official said. Germany's Bundesbank has said that a withdrawal from the single currency would be "considerable but manageable".
Gloomy comments from the US Congressional Budget Office (CBO) were also dampening the mood today. The CBO warned of a risk of recession for the world's largest economy in 2013 if the Bush-era tax reductions were allowed to expire at the same time as spending cuts come into effect. It said that the US economy could contract by 1.3% in the first half of next year as the government falls off a "fiscal cliff".
UK economy
In domestic news, the Bank of England's top decision makers indicated that more of them were on the verge of voting to increase stimulus measures at their lasting meeting. While the Monetary Policy Committee voted 8-to-1 to keep the Bank's quantitative easing programme steady at 325bn, the minutes of the meeting showed that "for several members, the decision not to expand the asset purchase programme at this meeting was finely balanced".
UK retail sales registered their biggest monthly fall in April, with fuel sales tailing off dramatically after the panic buying in March, when motorists were encouraged by the government to stock up on petrol.
FTSE 100: Miners bear the brunt of risk aversion
The blue-chip miners were dominating the fallers list on the Footsie as metals prices dropped on concerns that the Chinese economy may be affected greatly by Greece leaving the euro: investment bank China International Capital Corp said today that the world's second-largest economy could see its lowest levels of growth in more than two decades in this scenario. Mining peers Vedanta Resources, Kazakhmys, Polymetal, Xstrata, Glencore, Fresnillo, Rio Tinto, and Antofagasta were all suffering heavy losses.
Financials were also unwanted due to risk aversion. Barclays was out of favour after it announced the pricing details of the open offer part of its recently announced sale of its stake in US wealth management giant Blackrock. Meanwhile, there were rumours that the lender could be thinking about a shake-up in Italy, which could involve the sale of branches or a restructuring. Sector peers RBS, Lloyds and HSBC also finished lower.
Iconic British luxury brand Burberry dropped despite reporting solid profit growth in the year ended March 31st. Adjusted profit before tax increased by 26% from 298m to 376m, broadly in line with estimates. Analysts at Investec said this morning that bears make "take issue" today given the lack of upgrades following the results.
There were only a few stocks that finished with their head above water today: British Sky Broadcasting (BSkyB) rose after the Competition Commission announced that it was no longer concerned that 'Sky Movies' has an unfair advantage over its competitors; while Smith & Nephew was benefiting from renewed bid speculation.
FTSE 250: LSE falls after Italian banks sell up
Italian banks UniCredit and Intesa Sanpaolo have announced that they have sold their combined 11.5% stake of market operator London Stock Exchange (LSE), causing shares to take a tumble today. The banks made the transaction via an "accelerated bookbuild" at 960p per share, a discount to Tuesday's closing price.
Second-tier miners were firmly lower, like their FTSE 100 counterparts - Ferrexpo, Petropavlovsk and Avocet registered significant losses by the close. Aquarius Platinum was also under pressure due to the news of a fire at its Mimosa mine in Zimbabwe. "At this stage, the extent of the damage and impact on production cannot be ascertained," Aquarius said.
Buses and trains operator FirstGroup was a high riser after saying that it is to shake up its UK bus operations to focus on those areas that offer the greatest potential for growth. The group announced full-year results for the year to the end of March that were slightly ahead of expectations.
FTSE 100 - Risers
Smith & Nephew (SN.) 594.50p +0.42%
British Sky Broadcasting Group (BSY) 693.00p +0.36%
Aberdeen Asset Management (ADN) 241.30p +0.04%
FTSE 100 - Fallers
Vedanta Resources (VED) 951.50p -9.12%
Kazakhmys (KAZ) 679.50p -7.86%
Man Group (EMG) 73.10p -5.86%
Polymetal International (POLY) 794.00p -5.42%
Fresnillo (FRES) 1,312.00p -5.41%
Aviva (AV.) 263.90p -5.14%
Tullow Oil (TLW) 1,337.00p -5.04%
Rio Tinto (RIO) 2,790.50p -4.97%
Glencore International (GLEN) 343.65p -4.96%
Xstrata (XTA) 926.20p -4.80%
FTSE 250 - Risers
FirstGroup (FGP) 220.10p +7.42%
Ocado Group (OCDO) 107.80p +5.89%
COLT Group SA (COLT) 118.70p +5.14%
Great Portland Estates (GPOR) 392.90p +2.80%
Petra Diamonds Ltd.(DI) (PDL) 128.80p +2.79%
Paragon Group Of Companies (PAG) 160.80p +2.42%
Spirent Communications (SPT) 157.30p +2.28%
KCOM Group (KCOM) 69.00p +2.22%
Daejan Holdings (DJAN) 2,725.00p +2.14%
Lamprell (LAM) 103.00p +1.98%
FTSE 250 - Fallers
Ferrexpo (FXPO) 204.40p -10.82%
Aquarius Platinum Ltd. (AQP) 74.80p -10.10%
Petropavlovsk (POG) 380.50p -9.10%
London Stock Exchange Group (LSE) 947.00p -7.25%
Essar Energy (ESSR) 112.80p -6.70%
Kenmare Resources (KMR) 41.39p -6.48%
Avocet Mining (AVM) 143.50p -6.45%
New World Resources A Shares (NWR) 316.30p -6.42%
Talvivaara Mining Company (TALV) 146.90p -6.25%
Lonmin (LMI) 736.00p -6.18%
BC
London Welsh not eligible for Premiership promotion - BBC News
The Rugby Football Union has deemed that London Welsh will not be eligible for promotion to the Premiership.
A report said the Exiles had not achieved the minimum standards criteria for entry into the top flight.
An RFU statement said: "The independent auditors identified various failures, including not having Primacy of Tenure at their nominated ground."
Welsh have the right to appeal but the decision effectively safeguards Newcastle's Premiership status.
The Richmond-based outfit expressed "grave disappointment" in a statement and confirmed they will be "exploring all possible avenues off the pitch" to gain promotion if they win their two-legged Championship final.
For now it appears that Newcastle's new director of rugby Dean Richards will take over a Premiership club, three years after the so-called 'bloodgate' scandal, because, although Falcons finished bottom of the table this season, the other Championship finalists Cornish Pirates did not apply to join the top flight.
A Falcons statement read: "The club would like to take this opportunity to thank fans across the region for their continued support as the Falcons embark on an exciting new era under the stewardship of incoming director of rugby Dean Richards."
And commercial director Duncan Edward went on to say: "To be given the lifeline of playing in the Aviva Premiership next season and keeping top-class rugby in the region is unbelievable."
The Exiles were forced to look for alternate venues with a capacity over 10,000 because their home ground, Old Deer Park, is too small under the Premiership's regulations.
The club will play the second leg of their play-off final against Cornish Pirates at Oxford United's Kassam Stadium next week and, following the announcement that they were not eligible, confirmed "a firm binding agreement, subject only to promotion, has already been concluded with Kassam Stadium" for next season.
But the audit findings highlighted the primacy of tenure issue as a key stumbling block.
An RFU statement added: "This states that a club must demonstrate that they can host home fixtures at the time stipulated by Premiership Rugby and/or the host broadcaster."
This season four Premiership sides have played home fixtures at football grounds which they share: London Irish, Sale, Saracens and Wasps - a fact emphasised in London Welsh's response.
"The club [London Welsh] has already sought clarification on this point, the detailed reasoning behind why primacy of tenure was not satisfied (among other things) having not yet been given by the RFU," a statement read.
"The club also notes that if promoted it would share its ground with a club from the FA, in common with other Premiership clubs.
"It is not clear why an exception made in the case of at least four top-flight clubs might not now be extended to a fifth."
Newcastle Falcons avoid relegation from Premiership as London Welsh fail promotion criteria - Daily Telegraph
"The club firmly believes that it has met the Minimum Standards Criteria (MSC) for promotion to the Aviva Premiership, particularly as regards the issue of Primacy of Tenure and reaffirmed its belief in this respect in a detailed communication to the RFU as recently as Monday 21st May highlighting its case for having satisfied the MSC.
"The club has already sought clarification on this point, the detailed reasoning behind why Primacy of Tenure was not satisfied (among other things) having not yet been given by the RFU.
"The club is especially disappointed in this regard as a firm binding agreement, subject only to promotion to the Premiership, has already been concluded with Kassam Stadium - a ground with facilities the club believes to be at least the equal of many other grounds already hosting Premiership rugby and which itself hosted a Rugby Union Challenge Cup final only a few years ago.
"The club also notes that if promoted it would share its ground with a club from the FA, in common with other Premiership Clubs (such as London Irish, Sale, Wasps and Saracens). It is not clear why an exception made in the case of at least four top flight clubs (a third of the total) might not now be extended to a fifth."
The decision was made this lunchtime by the RFU board. In a statement, the RFU said: "The Rugby Football Union’s Board of Directors has considered the findings of the independent audit report requested by London Welsh, which determines a club’s eligibility for promotion to the Aviva Premiership in line with the Minimum Standards Criteria (MSC).
"The report, carried out by independent auditors, found that London Welsh has not met the MSC for the Aviva Premiership. The independent auditors identified various failures, including not having Primacy of Tenure at their nominated ground.
"This states that a club must demonstrate that they can host home fixtures at the time stipulated by Premiership Rugby and/or the host broadcaster.
"The RFU Board ratified the findings and agreed, should London Welsh win the RFU Championship final following the second leg on May 30, they would not be eligible for promotion and Newcastle Falcons would remain in the Aviva Premiership.
"Cornish Pirates did not choose to have an independent audit of the Mennaye Field and so do not fulfil the criteria for promotion should they win the final. As a result, there will be no promotion from the RFU Championship this season."
The Exiles knew the decision was due today and have tried to prepare themselves mentally for both scenarios during the long trip down to Penzanceeg.
"It won't affect our players one way or another," said London Welsh coach Lyn Jones. "The two legs over the next week is the culumination of nine months hard work from a great set of lads and winning the Championship is incentive enough.
"That will be our motivation when we cross the whitewash. Everything else, the politics, will take care of itself. It always does.
"Our backroom staff have done a great job putting our application together, our sole task is to produce two top level peformances against talented and respected opponents."
Newcastle's commercial director Duncan Edward added: “To be given the lifeline of playing in the Aviva Premiership next season and keeping top-class rugby in the region is unbelievable."
The Exiles lock horns with Cornish Pirates tonight in the first leg of the Championship play-off final.
London mayor announces housing board members - InsideHousing
Homes for London board members:
• Nick Salisbury, former head of structured finance for the Barclays corporate bank property
• Mike Youkee, former head of housing at Quintain and former joint chief executive of the Greenwich Peninsula project
• Charmaine Young CBE, outgoing director of developer St George
• Sir Steve Bullock, London Councils’ executive member for housing
• Councillor Stephen Carr, leader of Bromley Council
• Councillor Chris Roberts, leader of Greenwich Council
London 2012 Olympics: Call to ban sponsors from Olympic lanes - Daily Telegraph
The lanes were created to avoid the chaos which beset the Atlanta Olympics in 1996, where competitors struggling to reach events on time after being stuck in heavy traffic.
Critics of the London arrangements fear that motorists will be caught in gridlock, although the restrictions have been watered down by Boris Johnson, the mayor.
The changes will see the lanes suspended between the Olympics and Paralympics, ditching the original proposals which would have seen them in force for three months over the summer.
FBI are not worried by London 2012 security, insists NYPD chief - Daily Mail
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New York's police chief says he is impressed with security planning for this summer's London Olympics, rejecting suggestions that US officials were concerned about arrangements for the Games.
Commissioner Raymond Kelly said London's police and security planning was far more comprehensive and organised than had been the case for the Atlanta games in 1996, when he was personally involved in a federal government role.
'It seems they really have a handle on just about any contingency that might take place,' Kelly said in London during a trip to meet Olympic security chiefs, senior London police and officials at MI5 domestic security agency.
'We've been universally very much impressed with everything we've seen. As far as I can see they have done an excellent job preparing all of their forces.'
No concerns: Raymond Kelly has dismissed security fears
Last November, the United States denied that there had been a diplomatic row over the Olympic security planning, following a newspaper claim that 1,000 agents including some 500 from the FBI, would be sent to protect US athletes and officials.
Chris Allison, Britain's national Olympic security coordinator, said the claim was 'rubbish' and that the reported FBI contingent had been grossly exaggerated.
'I think the FBI role is a supportive one. I don't think they're here with specific concerns,' Kelly said, dismissing the idea that the London police needed their assistance.
He added than rather than lecturing the British, his visit had been a learning one.
'We were takers rather than givers, put it that way,' he commented.
Allison and other senior British security figures have said protests and public order issues rather than al-Qaeda and international terrorism were the most likely threats to the Games.
Last year, Britain suffered its worst rioting in decades and there have been high-profile anti-capitalist protests in London, some inspired by New York's Occupy Wall Street moment.
Kelly said he had discussed the riots with his London counterparts and it was an issue that they had factored in, with plans for a rapid mobilisation to deal with any unexpected events.
'Will there be demonstrations, will there be protests of some sort? Sure. That's a given in this day and age. It's something that happens in New York and London literally everyday,' Kelly said.
'But the Met is well experienced. They're well prepared to handle it.'
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