Stocks rise on low volumes
Market Movers
techMARK 2,066.49 +0.58%
FTSE 100 5,791.03 +0.68%
FTSE 250 11,861.74 +0.67%
With
trading volumes light owing to Thanksgiving, upbeat Chinese
manufacturing data saw UK markets finish Thursday’s session with decent
gains in spite of the ongoing uncertainty surrounding the Eurozone.
Research analyst Joshua Mahony from Alpari said: “Today marks the holiday of Thanksgiving
in the US, bringing lowered volumes in the market. Tomorrow will be a
half day for many too which typically is taken as a day off to create a
four-day weekend. Therefore the higher volatility associated with lower
volumes is expected through tomorrow.”
The 'flash' HSBC Chinese purchasing managers’ index (PMI) for the month of October came in at 50.4, up from 49.5 for the previous month. That constitutes a thirteen-month high.
Financial sales trader Matthew Nelson from Spreadex said this morning:
"News that manufacturing output had risen in China for the first time in
more than a year helped to underpin sentiment in the East and the
figures have also aided the prospects of UK metals and energy companies
with the bulk of this morning’s shift coming from the two sectors."
However, data from the Eurozone
was less cheery today, with the single-currency region heading for its
weakest quarter since the height of the financial crisis in 2009,
according to the latest figures from Markit. The Eurozone composite PMI
was little-changed in November, up fractionally from 45.7 in October to
45.8.
Meanwhile, French bank Societe Generale has forecast that Spain will stay in recession and not return to economic growth until 2015.
Elsewhere, the EU summit
started today as leaders look to establish a new long-term budget for
the 2014-2020 period. Alpari analyst Mahony said: “The meeting pulls
together the leaders of each of the 27 European Union member states and
is expected to be a rather frosty affair given the propensity those
involved to use the meeting as a show of strength to their domestic
electorate.”
FTSE 100: SABMiller jumps after first-half beat
SABMiller,
one of the world's largest brewers, rose into the top spot after it
managed to beat analysts' forecasts in the first half as its hiked its
interim dividend by 12 per cent. The company reported revenue of
$17,476m in the six months to the end of September, up 11% on $15,688m
reported the year before, and better than the $16,940m that Charles
Stanley was expecting.
Mining stocks were also performing well today on the back of the Chinese manufacturing data: Vedanta, ENRC, Glencore, Xstrata and Kazakhmys were among the best risers. Glencore and Xstrata in particular were given a boost by the news the European Commission has cleared the merger between the two.
Steel giant EVRAZ
was also a high riser after announcing that it is to sell its Russian
railcar operating subsidiary EvrazTrans to Russian freight rail operator
NefteTransService for around $300m as it divests of non-core assets.
Following a sharp fall yesterday after its first-half figures, chemicals group Johnson Matthey
rebounded after Credit Suisse upgraded the stock from 'neutral' to
'outperform' and lifted its target from 2,300p to 2,400p. The broker
said: "We think the short-term negatives have now been flagged and are
in the share price. Mid-term, we forecast good growth, and believe the
shares are at a reasonable price."
Global insurer RSA
also rose after it said it has appointed financial services stalwart
Martin Scicluna as its new Chairman. He will join the board on January
1st 2013 and succeeds John Napier who is stepping down at the end of the
year after a decade in the post.
FTSE 250: Man Group rises on report of fund experiment
Fund manager Man Group
advanced today after the Financial Times reported that it has moved
$1.5bn of its flagship fund AHL into a new portfolio in order to raise
returns.
Chemring was higher after it was reported that
a subsidiary of the company was awarded a $4.4m contract for the
manufacture of decoy devices for the US Air Force.
Defence group Cobham
rose after its aviation division secured a multi-million dollar
extension on a contract to fly miners to remote parts of Western
Australia.
Iron ore producer Ferrexpo was also making
decent gains following an analyst dinner yesterday. According to
Financial Times Alphaville, analysts at Numis said that the meeting
“affirmed our view further of this conservative business that continues
to drive itself up the product quality chain and down the cost curve.”
The broker noted that the stock is trading at a “subdued” 3.2 times
earnings and 0.8 times net asset value, “below its peers”.
Talvivaara
shares dropped one day after the company received a permit to restart
the metals recovery plant at its Sotkamo nickel mine where it suffered a
leak. It said it expects full production to resume by November 25th.
| AIM/Small Cap Report |
FTSE 100 - Risers
SABMiller (SAB) 2,801.00p +6.38%
Evraz (EVR) 237.30p +4.86%
Johnson Matthey (JMAT) 2,289.00p +4.52%
Melrose (MRO) 215.00p +2.63%
Morrison (Wm) Supermarkets (MRW) 263.40p +2.49%
RSA Insurance Group (RSA) 113.50p +2.34%
Tullow Oil (TLW) 1,396.00p +2.27%
Compass Group (CPG) 714.00p +2.07%
Glencore International (GLEN) 340.70p +1.98%
International Consolidated Airlines Group SA (CDI) (IAG) 168.10p +1.88%
FTSE 100 - Fallers
Polymetal International (POLY) 1,108.00p -1.07%
Pearson (PSON) 1,175.00p -0.59%
Hargreaves Lansdown (HL.) 766.00p -0.58%
Vodafone Group (VOD) 158.30p -0.53%
Standard Life (SL.) 306.80p -0.52%
Croda International (CRDA) 2,303.00p -0.22%
United Utilities Group (UU.) 670.50p -0.15%
Babcock International Group (BAB) 974.50p -0.15%
Royal Dutch Shell 'A' (RDSA) 2,071.50p -0.12%
Fresnillo (FRES) 1,965.00p -0.10%
FTSE 250 - Risers
Man Group (EMG) 77.50p +6.09%
Chemring Group (CHG) 229.20p +5.62%
Savills (SVS) 438.00p +4.01%
Soco International (SIA) 373.40p +3.38%
Ferrexpo (FXPO) 214.70p +3.27%
Dixons Retail (DXNS) 25.80p +3.20%
BTG (BTG) 352.10p +3.19%
Cobham (COB) 202.50p +3.05%
Fenner (FENR) 385.50p +2.80%
Bovis Homes Group (BVS) 513.00p +2.60%
FTSE 250 - Fallers
Talvivaara Mining Company (TALV) 99.95p -3.71%
Ruspetro (RPO) 84.00p -3.45%
Euromoney Institutional Investor (ERM) 765.00p -2.98%
Centamin (DI) (CEY) 65.95p -2.73%
Bumi (BUMI) 259.80p -2.62%
Mitchells & Butlers (MAB) 328.40p -2.55%
Homeserve (HSV) 239.60p -2.20%
Pace (PIC) 180.90p -2.06%
Kentz Corporation Ltd. (KENZ) 369.90p -1.94%
Kenmare Resources (KMR) 32.36p -1.94%
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| European broker round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Investors braced for protracted haggling in Brussels
FTSE-100: 0.60%
Dax-30: 0.80%
Cac-40: 0.29%
FTSE-Mibtel 30: 0.76%
Ibex 35: 0.97%
Stoxx 600: 0.44%
The main European equity benchmarks were registering moderate rises
ahead of the start of the European Union summit in Brussels, in the
evening, where leaders were expected to haggle over the next long-term
budget (2014-2020) to the last pence.
Acting as a backdrop,
and as is often the case, the fact that US markets are closed in
observance of the Thanksgiving Day holiday led to a reduction in
European trading volumes.
Simply put, investors are bracing
for what in the past has sometimes turned into a tortuous and long
drawn-out affair, as national interests come to the fore. More so given
the austerity prevalent across the globe at the moment.
Never
the less, hopes rose as EU President Van Rompuy’s latest proposal for a
small reduction in the trillion euro budget appeared to be gathering
support, including from the UK, according to some published reports.
The Spanish Treasury has this morning auctioned 3.88bn euros in medium
and long-term debt, ahead of the 3.5bn euros it was aiming for. As well,
the Treasury has confirmed that it has conducted a private placement of
3.28bn euros in 5 year debt.
Out on the corporate front, Renault plans to create 1,300 jobs in Spain under a scheme after reaching a deal with unions in that country.
There were also reports that Santander may be studying an initial public offering of its US auto insurance unit.
From a sector stand-point the best performers on the DJ Stoxx were to
be seen in the following groups: Basic resources (1.04%), Technology
(0.90%) and Retail (0.95%).
Weaker than forecast economic data
The
Eurozone service sector purchasing managers’ index for the month of
November compiled by Markit has come in at 45.7, versus 46 for the
previous month (Consensus: 46).
The Eurozone manufacturing
sector purchasing managers’ index for the month of November has come in
at 45.8, versus 45.7 for the previous month (Consensus: 45.8).
Italy’s non-EU trade balance improved to €1.47bn in October, after -€657m in the previous month.
Dutch consumer spending remained flat in September in year-on-year terms, versus a 2% drop in the month before.
Euro nudges up a bit further
The euro/dollar is now gaining 0.46% to the 1.2886 dollar mark.
Front month Brent crude futures are falling by 0.326 dollars to the 110.52 dollar level on the ICE.
| US Market Report |
US newspaper round-up: Ally Financial, Fed...
Ally Financial’s
international operations are about to find a new home — with the
lender’s former parent, General Motors. Ally agreed on Wednesday to sell
its European and Latin American businesses, as well as a share of a
joint venture in China, to G.M.’s financial arm for about $4.2 billion.
The sale is the latest effort by Ally to raise money to help pay back
its government bailouts, made to help prop up a company struggling under
the weight of souring mortgages. The Obama administration pumped money
into the firm as part of its bailout of the auto industry in 2009. [The New York Times]
The Federal Reserve
isn't near a limit on how many Treasury or mortgage-backed securities
it can purchase, Federal Reserve President John Williams said in an
interview with The Wall Street Journal. Some Fed officials have been
concerned that if the central bank buys too many bonds in these markets
it could become such a big player that these markets become illiquid and
stop functioning properly. Mr. Williams said the Fed isn't close to
causing those kinds of problems. He said he wants to keep buying $85
billiong per month of long-term securities in 2013. [The Wall Street Journal]
A federal bankruptcy judge in New York approved Hostess Brands'
shutdown plan Wednesday after an 11th hour mediation effort failed,
setting the stage for mass worker firings and the sell-off of the owner
of the renowned Twinkies brand. Judge Robert Drain approved the motion
at a White Plains hearing after Hostess and the Bakery, Confectionary,
Tobacco and Grain Millers Union failed to reach an agreement that would
end the crippling strike the union launched on Nov. 9. Drain rejected a
motion by U.S. Bankruptcy Trustee Tracy Hope Davis to convert the case
from a financial restructuring to a Chapter 7 liquidation. He said such a
transfer, which would have given a trustee control over a Hostess
assets sale, "would be a disaster." [USA Today]
The group that will administer the coming major-college football playoff agreed in principle for ESPN
to broadcast the playoff games and "selected other games" for 12 years,
it was announced Wednesday by the group formerly known as the Bowl
Championship Series. The four-team playoff and the broadcast deal will
begin after the 2014 season. A person familiar with the negotiations
said it is worth about $470 million annually or $5.64 billion for the
duration of the contract. [The Wall Street Journal]
Of all the industries likely to get clipped by the fiscal cliff,
travel is probably near the top of the list. Companies are already
cutting back on business travel ahead of the scheduled Jan. 1 start of a
feared combo of big tax increases and spending cuts that economists
warn could cause a recession if they all occur at once. Companies will
spend $20 billion less on business travel through 2014 if the fiscal
cliff happens, according to the Global Business Travel Association. [USA Today]
Federal regulators are preparing a civil fraud case against a prominent
Los Angeles money manager, a government lawyer said at a court hearing
on Wednesday. The manager, Peter J. Eichler Jr., chief executive of Aletheia Research and Management,
has received a so-called Wells notice from the Securities and Exchange
Commission, an indication that the agency is considering an enforcement
action. Gary Leung, an S.E.C. staff lawyer, disclosed the potential
lawsuit during a hearing in United States Bankruptcy Court in Los
Angeles. Aletheia filed for bankruptcy protection on Nov. 11, and owes
as much as $50 million. [The New York Times]
|
| Thursday broker round-up |
Alternative Networks: Westhouse Securities downgrades from buy to add, target of 280p kept.
Babcock International: UBS downgrades from buy to neutral.
Barr (AG): N+1 Singer raises target from 402p to 525p and upgrades to buy.
Belvoir Lettings: Seymour Pierce raises target from 91p to 112p, buy recommendation remains unchanged.
British Land: Goldman Sachs moves target from 564p to 565p, buy recommendation unchanged.
Compass Group:
Citigroup raises target from 750p to 800p, buy rating remains
unchanged. Credit Suisse raises target from 791p to 813p, outperform
rating reiterated. Oddo raises target from 660p to 720, outperform
rating maintained.
Daisy Group: Jefferies reduces target from 140p to 136p, buy recommendation maintained.
Dart Group: Canaccord Genuity raises target from 118p to 152p, buy rating unchanged.
Direct Line: UBS initiates with a target of 215p and a buy recommendation.
Dixons Retail:
Morgan Stanley raises target from 20p to 38p, overweight rating kept.
UBS raises target from 21p to 27p, neutral rating remains unchanged.
Dunelm Group: UBS raises target from 650p to 700p, buy recommendation reiterated.
easyJet:
Citigroup raises target from 700p to 780p, buy recommendation
maintained. Charley Stanley moves target from 400p to 425p, hold
recommendation kept. Barclays Capital moves target from 520p to 675p and
upgrades to equal weight.
Frenillo: Goldman Sachs initiates with a target of 1950p and a neutral recommendation.
GoldStone Resources: WH Ireland raises target from 8.5p to 9.7p, buy rating reiterated.
Halfords Group:
HSBC raises target from 330p to 365p, neutral rating remains unchanged.
Exane BNP Paribas moves target from 160p to 300p, underperform rating
maintained.
Hays: Shore Capital downgrades to hold.
Hochschild Mining: Goldman Sachs downgrades to sell, target of 510p kept.
Homeserve: Liberum Capital reduces target from 260p to 250p and downgrades to hold.
Imagination Technologies Group: UBS upgrades from sell to neutral.
InterContinental Hotels Group: Liberum Capital starts with a target of 1943p and a buy recommendation.
Intermediate Capital Group:
Deutsche Bank cuts target from 320p to 289p and downgrades to hold.
Numis moves target from 315p to 323p, hold recommendation reiterated.
Johnson Matthey:
Credit Suisse raises target from 2300p to 2400p and upgrades to
outperform. JP Morgan reduces target from 2620p to 2350p, neutral rating
unchanged. UBS cuts target from 2300p to 2280p, neutral recommendation
kept. HSBC reduces target from 2700p to 2400p, neutral rating
reiterated.
Lonmin: Barclays Capital reduces target from 615p to 275p, equal weight rating kept.
Michael Page International: Shore Capital downgrades to sell.
Millennium & Copthorne Hotels: Liberum Capital starts with a target of 469p and a hold recommendation.
MITIE Group: Barclays Capital initiates with a target of 320p and an overweight recommendation.
Mothercare: Numis raises target from 270p to 325p, add rating remains unchanged.
Prudential: Berenberg raises target from 1040p to 1080p, buy recommendation kept.
Randgold Resources: Bank of America downgrades from buy to neutral.
Renold: N+1 Singer raises target from 19p to 20p, hold recommendation unchanged.
Robert Walters: Shore Capital downgrades to hold.
Secure Trust Bank: Numis raises target from 1167p to 1234p, hold recommendation kept.
SThree: Shore Capital downgrades to hold.
Trinity Mirror: Citigroup raises target from 33p to 50p, sell recommendation maintained.
United Utilities Group: Nomura downgrades from buy to neutral.
Weatherly International: Canaccord Genuity raises target from 12p to 13p, buy recommendation maintained.
Whitbread: Liberum Capital initiates with a target of 2740p and a buy recommendation.
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