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Drug makers prop up London’s blue chips as FTSE 100 (Euronext: VFTSE.NXnews) rises 0.5pc, but banks
slip back as eurozone worries persist.

Having endured an uncertain day’s trading as leaders met to discuss the
Eurozone’s predicament, the FTSE 100 finally finished up 27.7
points to 5553.24 although the FTSE 250 (FTSE: ^FTMCnews) eased 5.99 points to
10422.38. Real estate (Euronext: SRE.NXnews) groups were again dragging on the top tier, with British
Land losing 8.8 to 489.9p and miners experienced mixed fortunes.

Xstrata (Dusseldorf: XTR.DUnews) slid 11½p to £10.03, but Fresnillo (Frankfurt: A0MVZEnews) and Randgold
Resources (Euronext: ERS.NXnews) advanced 70p to £16.54 and 170p to £68.80 respectively as
investors headed to the so-called safe havens offered by precious metals.

Banks weighed on the blue-chips, though, with Lloyds Banking Group (LSE: LLOY.Lnews)
falling 0.73 to 34.25p and Royal Bank of Scotland (LSE: RBS.Lnews) easing 0.31 to
24.78p.

Leading the charge on the second tier, was Rank Group (Xetra: A0LGPGnews) , with the owner
of Mecca Bingo jumping 11 to 140p. Goldman Sachs (NYSE: GSnews) reinstated its “neutral”
rating on the gaming group with a 150p price target.

But tour operator Thomas Cook retreated 1.85 to 54.8p after the same
broker cut its price target to 47p from 82p. “We continue to see several
significant structural challenges to mainstream tour operating, which we
expect to lead to margin and volume pressure over the near and medium term,”
said analysts, who highlighted challenges such as declining numbers of
package holidays. But, TUI Travel (Other OTC: TTVLF.PKnews) rose 3.9 to 171.8p.

Informa (Dusseldorf: 10163162.DUnews) gained 11.7 to 367.8p after saying revenues had grown during
the past nine months. Informa, which organises exhibitions and events, said
it had continued to grow after it cut back on smaller and discretionary
events during the downturn in 2008, leaving it with stronger key exhibitions
in certain sectors.

3.45pm: Wall Street makes gains, as drug makers prop up London’s blue-chips

Wall Street is making gains, with the Dow Jones Industrial Average rising 75
points to 11781, after better-than-expected US durable goods data raised
optimism about the outlook for economic growth in the world’s largest
economy.

But, London’s blue-chips are struggling to hold onto their gains, with the FTSE
100 rising only 3 points to 5528. Pharmaceutical companies are helping
to prop up the benchmark index with GlaxoSmithKline (Other OTC: GLAXF.PKnews) rising 0.8pc and Shire (Stuttgart: A0MMAGnews)
putting on 1.8pc.

Glaxo made gains as its results showed it returned to growth in the third
quarter as Britain’s biggest drugmaker put patent expiries and a collapse in
revenue from troubled diabetes pill Avandia behind it. Sales were up 4pc to
£7.1bn and profits were £2bn.

Trading conditions have proved tough for pharmaceutical companies around the
world as pricing pressures increase. The squeeze is being felt particularly
in Europe (Chicago Options: ^REURUSDnews) where many cash-strapped governments are cutting healthcare
budgets, but Glaxo chief executive, Andrew Witty, said the impact was no
worse than expected.

Analysts at Bernstein said that overall, it was a “decent quarter”.
They added:

GSK continues to provide much-appreciated clarity on operating performance
in several business segments including Emerging Markets, ViiV, Consumer
Healthcare and Vaccines. Revenue growth was strong in Emerging Markets (+13%
CER) and Japan (EUREX: FMJP.EXnews) (+31% CER); Emerging Markets accounted for 20% of total sales
in 3Q. European austerity measures caused a -5% hit to revenues causing
underlying sales to decline by 4% in Europe. US underlying revenues grew at
+1%.

Meanwhile, Shire has been buoyed by an upgrade from Societe Generale (Paris: FR0000130809news)
which raised its rating on the drug maker to “buy” from “hold”.

SocGen says its upgrade is made on the basis of upcoming product launches, and
its conviction that high quality, defensive stocks offering strong growth
will become increasingly valuable.

11.50am: Stobart reverses on slowing profit growth

Stobart has gone into reverse gear, retreating 7pc, after profit growth
at the freight company was hit by fluctuating demand in a tough economy,
particularly at its biggest division.

The company’s road transport operations suffered as panicky retailers launched
early promotions amid the UK high street gloom.

Stobart said in a statement:

More retail promotions caused volumes to fluctuate, which created problems
for us in planning our loads efficiently.

Revenues were up 15.3pc in the first half to £281.1m, but pre-tax profit
slipped to £14.7m from £15.4m last time.

Analysts at Investec (Frankfurt: A0J32Rnews) , which acts as a broker to Stobart, said:

Stobart’s management is very focused on the group’s new three-to-four-year
business plan to deliver a significant enhancement of profits and value
generation for shareholders. Whilst the road may not always be smooth (as
evident from the market challenges that the transport division faced in H1),
several key milestones have already been reached, especially in the airport
unit. Investors prepared to take the medium-term view on this stock should
be well rewarded, we believe, as this value is unlocked.

Amongst the blue-chips, Next (Xetra: 779551news) and Marks Spencer (Dusseldorf: MA6.DUnews) remain
under pressure, slipping 2.2pc and 1.3pc respectively.

Writing on the latter, ahead of first-half results due on November (Stuttgart: A0Z24Enews) 8, analysts
at Nomura cut their forecasts for 2012 profit from £724m to £692m. The
broker said:

A disappointing first half is principally a function of a greater than
expected squeeze on consumer spending power (fuel, utilities) and near-term
operational inflexibility, in our view.

Analysts added that management’s medium-term plan for MS (LSE: MKS.Lnews) still looked
promising, with a focus on points of difference and building online sales.
But they added:

The lesson learnt from 1H should be that, in a low growth economy, low
hurdle rateson new capital can see plans quickly de-railed. While the nature
of the 50% food mix in UK sales means returns can never be sector leading,
spending on innovations such as bakeries and delis may come to be seen as
‘marketing’ rather than investment. While the plan was conceived
anticipating stable economic conditions, the macro and consumer environment
has since deteriorated. Shareholders might therefore ask if this can be
‘done for less’ and look for flexibility from management at the interim
results on 8 November.

11am: Deutsche downgrade weighs on Next

Next is amongst the sharpest fallers, slipping 2.7pc this morning, as
Deutsche Bank (Xetra: 514000news) downgraded the high street retailer following a strong run for
the shares.

Analysts expect the stock to remain muted from now until after Christmas. They
point out Next is scheduled to report third-quarter sales on November 2, and
due to the unseasonably warm weather to date, the broker thinks
Autumn-Winter (Stuttgart: A0XFUKnews) ranges will have got off to a lacklustre start, leading it to
modestly cut its earnings forecasts. Deutsche added:

The main downside risk is a bigger ‘double dip’ in UK consumer expenditure
than allowed for whilst the main upside risk would be if Next Directory
sustains 15 percent growth, as delivered in H1.

Next’s fellow retailer, Marks Spencer , is also down 1.4pc as the
blue-chips mark time, with the FTSE 100 up just 3 points to 5528.

Yusuf Heusen, sales trader at IG Index, said:

Markets remain calm mid-morning despite the inevitable storm ahead. With
European leaders converging on Brussels once again, today has the potential
to see some great progress in resolving the eurozone debt crisis. The theme
of optimism we’ve seen since the start of the week has been left largely
intact despite some wobbles on Wall Street yesterday – worsened by that big
drop in US consumer confidence and right now the FTSE is holding steady
around Tuesday’s closing price.

Amongst the second-liners, CSR (LSE: CSR.Lnews) has jumped 9pc despite the chipmaker
saying it is seeing caution amongst its customers in the auto, home audio
and mobile sectors and so now expects fourth-quarter revenue to fall short
of market expectations.

CSR said it expected fourth-quarter revenue to be between $230m and $250m,
just short of consensus forecasts of $255m.

But analysts were hopeful about the prospects for a new bluetooth-wifi
combination chip that CSR is developing. Lee Simpson, an analyst at
Jefferies, said:

Going forward, CSR remains cautious due to macro uncertainty. But recent
combo chip tape-out gives us hope that the share price re-rate is still in
the cards.

8.20am: FTSE treads water ahead of Eurozone talks

The FTSE 100 was trading in a narrow range. It opened slightly down,
dipping 0.05pc – 2.98 points – to 5528.57, before edging back into positive
terrritory.

The biggest risers were:

Fresnillo +2.53pc

Randgold +2.16pc

Vedanta +1.1pc

Burberry +1.1pc

Imperial Tobacco (LSE: IMT.Lnews) +1.04pc

The biggest fallers were:

Smiths Group (LSE: SMIN.Lnews) -2.94pc

Reckitt Benckiser (LSE: RB.Lnews) -2.40pc

Next -1.69pc

Investec -1.1pc

Bunzl (Frankfurt: A0ET3Enews) -0.98pc

Asian shares were flat on Wednesday as markets waited for news of whether a
concrete plan to tackle the eurozone’s debt crisis will emerge at an EU
summit later.

Japan’s Nikkei 225 (Osaka: ^N225news) slipped 0.16pc to 8,748.47, Hong Kong’s Hang Seng (HKSE: ^HSInews) fell
0.18pc, South Korea’s Kospi edged up 0.3pc and Australia’s SP/ASX (Other OTC: ATKEF.PKnews)
200 rose 0.3pc.

The uncertainty in the European Union has weighed on global commodity and
equity markets for months, with Italy now joining Greece in the emergency
room.

The cancellation of an EU finance ministers’ meeting before Wednesday’s summit
raised concerns that the high-level talks will fail to produce a deal to end
a crisis that has threatened to plunge the world economy into recession.

Barclays Capital said in a note

The cacophony of voices, shifting timelines and complexity of the problem
lead us to remain cautious on the euro and risky assets until more about the
next steps is known. .

RBS Morgans principal investment adviser Christopher Macdonald cautioned:

I don’t think people should be buying equities before the EU meeting .

Eurozone leaders remain at odds over how to beef up its €440bn rescue fund and
the size of losses banks should take on Greek bonds.

Sydney got a boost after government data showed inflation had eased to 0.6pc
in the third quarter, down from 0.9pc in the previous three months and
paving the way for a possible interest rate cut.

US stocks slumped on Tuesday on indications of a still-weak economy and
worries over Europe’s debt problems, with the Dow Jones Industrial
Average losing 1.74pc to close down 207 points at 11.706.62. The
tech-heavy Nasdaq Composite (Nasdaq: ^IXICnews) shed 2.26pc while the broader SP
500 lost 2pc.

Data released on Tuesday showed US consumer confidence fell to its lowest
level since March 2009, with third-quarter GDP data due Thursday.

Shares in online retail giant Amazon plunged 14pc in after-hours
trading on Tuesday after the US-based firm unsettled investors after posting
a 73pc drop in third-quarter net profit as it invested heavily in its Kindle
Fire tablet computer.

Wednesday’s market report

MS in spotlight on uncertain day’s trading

Tuesday’s market report

Weir pumped up as equities sink into red

FTSE live: market report – as it happened October 25,
2011

Monday’s market report

Kesa sparks up as hopes of Comet sale grow

FTSE live: market report – as it happened October 24,
2011

Friday’s market report

Sun shines on Thomas Cook after bank deal

FTSE live: market report – as it happened October 21,
2011

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and Markets: News, charts, data


Move to Beef Up Fund Has Blank Spots

PARIS—The 17 governments of the euro area have agreed to rely on Byzantine financial engineering and outside help to beef up the firepower of a rescue fund aimed at comforting investors that the group can fix Greece’s debt woes and handle future crises.

Euro-zone leaders said the souped-up rescue fund, known as the European Financial Stability Facility, would have the capacity to provide guarantees for about €1 trillion, or about $1.4 trillion, of bonds, and expressed hope this would be enough to assist large euro-zone members such as Italy and Spain.

But the plan, crafted in the wee hours of …