Starting at the bottom and working up, Tate & Lyle (-17%) and Rolls-Royce (-11%) are two companies really suffering this morning, as they both provided disappointing outlooks as part of their results releases. A rating-cut for Aberdeen Asset Management causes it to fall 5%, and a read across to the weak Rolls-Royce numbers has pushed BAE Systems 3% lower ahead of its update, a week from today.
Lloyds (-4%), regularly IG’s most traded stock in London, has also slumped this morning, despite finally returning to a pre-tax profit and pushing the idea of a dividend towards the end of the year. The bank is clearly declaring its readiness to return to full private ownership, but investors may be put off by the 'ball is in your court' approach that Lloyds is taking towards UK Financial Investments, which controls the taxpayers' stake in the firm. Clarity on the government's disposal plans would certainly help give a better long-term picture, with some analysts highlighting that offloading the remaining 33% stake in one hit may be the best way to go. In the meantime, we still expect to see buyers on weakness around the 80 pence level, as short-term opportunities around this level have borne fruit so far in 2014.
Ahead of US trading we are eyeing a negative start, after a lacklustre close yesterday and following European weakness this morning. Our opening call of 15,915 for the Dow Jones is lower by around 50 points.