FTSE 100 seen flat ahead of Fed’s Beige Book

Reported by Proactive Investors on Wednesday, 28 July 2010 (on July 28, 2010)

The FTSE 100 is seen flat after ending the day 0.3% above the opening level on Tuesday. The markets got a boost from the banking sector after the Basel Committee said it would loosen up the liquidity and capital rules laid out in its Basel III reform. Swiss bank *UBS (NYSE:UBS)* added to the sentiment, reporting a quarterly net profit of US$1.9 billion to provide more support for the banks. *Deutsche Bank’s (NYSE:DB)* results were just as strong with a 6.2% jump in Q2 net income. However, the rally didn’t last as an update on US consumer confidence showed a decline from 54.3 to 50.4.

Part-nationalized bank* Lloyds (LON:LLOY)* emerged atop the leaderboard with a 9% rally. Sector peers *Royal Bank of Scotland (LON:RBS)* and* Barclays (LON:BARC)* followed with gains of over 7.5%. Insurer *Prudential (LON:PRU)* tacked on almost 5%. Base metal miner *Vedanta Resources (LON:VED)* and software developer *Autonomy Corp (LON:AU)* climbed 3%. Private equity firm* 3i (LON:III)*, oil and gas producer* Tullow Oil (LON:TLW)*, which announced a discovery in Ghana added more than 2.5%, as did another banking stock *Standard Chartered (LON:STAN)*.

*InterContinental Hotels Group (LON:IHG) *was at the bottom of the pile with a 7.5% loss. Gold miner *Randgold Resources (LON:RRS)* was a distant second with a 4% decline. Temporary power provider* Aggreko (LON:AGK)* and fashion house *Burberry (LON:BRBY) *lost nearly 4% and chipmaker* ARM Holdings (LON:ARM)* dropped 3.5%. Food manufacturer *Unilever (LON:ULVR)* fell 3%. Oil and gas supermajor *BP (LON:BP)* declined 2.6% after reporting a £11 million loss in the first half and making Chief Executive Tony Hayward’s departure official. The company announced former TNK-BP CEO and US citizen Bob Dudley as his replacement.

US stocks managed to close flat after US home prices were reported to have risen 4.6% in May to offset the negative impact from the consumer confidence data.

The *Dow Jones Industrial Average *added 0.1%, the broade*r S&P 500 *index declined 0.1% and the technology heavy *NASDAQ* composite dropped 0.35%.

Asian markets were in buying mode. Hong Kong’s *Hang Seng and *Australia’s *S&P/ASX 200 *climbed 0.5% and 0.75% respectively, South Korea’s KOSPI improved 0.3%, China’s *Shanghai Composite Index *rallied 2% and Japan’s benchmark* Nikkei 225 surged 2.7%
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Commodities

Oil prices declined from yesterday’s levels. *US light, sweet crude* for September delivery dropped to US$76.69/barrel, while September *Brent Crude *retreated to US$76.08/barrel.

Precious metals fell sharply. *Gold* plummeted to US$1,161/oz, while* silver* and *platinum* declined to US$17.66/oz and US$1,531/oz respectively.

Base metals were flat. *Copper* and *nickel* stood at US$3.19/lb and US$9.26/lb respectively. *Zinc* held steady at US$0.85/lb.

US mortgage applications data will be out today, while the Fed will release its Beige Book regional economic conditions survey.

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