Obama comments weigh on European equities

President Obama’s denouncement of recent events in Russia, and the perceived propensity for additional US sanctions, has managed to remove some of the buoyancy in European equities today.

Once again it’s the mining sector that is preventing the FTSE 100 from sustaining a move through the 6600 level. Fresnillo and Randgold Resources are both registering losses as metal prices continue to track lower.

Investors are also less than impressed with engineering group Babcock this morning, following reports that it is to buy helicopter services provider Avincis. Given that Babcock will have to assume a net debt of £705 million in the acquisition, it is uncertain whether shareholders will agree to a £1.1 billion rights issue in order to fund the purchase. The stock is down over 4% in early trade.

A disappointing update from Tullow Oil with respect to exploration drilling in Kenya has also been to the detriment of share prices. Shares in the company have now fallen over 13% year-to-date, bringing the total losses over the past six months to 30%.

News of a new advertising product for BSkyB and opportunities for additional revenue as a result in the coming year have seen the share add over 1% and put the media company at the top of the UK benchmark,

The British economy continues on the front foot. News that retail sales for February jumped 1.7% against an expectation for a 0.5% rise helps to underpin the notion that the UK will regain the overall positive momentum. The pound has garnered strength on the news and has pared some recent losses against both the euro and the dollar. The slew of economic data for the US due later this afternoon could reverse the dollar losses. 

Unemployment claims are expected to increase slightly on last week to 326,000, while final GDP is expected to be confirmed at an increase of 2.7% in the last quarter.

Poor weather is once again expected to infiltrate the housing market – pending home sales are slated to show a rise of 0.1% on the month.

We are expecting the Dow Jones to open 23 points higher at 16,303.

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