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Stocks rally on hopes for Spain
Market Movers
techMARK 2,119.80 -0.21%
FTSE 100 5,834.51 +0.03%
FTSE 250 11,502.29 +0.04%
Spanish aid hopes drive stocks late on Global economic data comes in mixed Miners, banks rise in afternoon trade The Footsie rallied in afternoon trade, tracking European markets higher on the back of increased speculation that Spain could be close to requesting some sort of aid to help its ailing banks.
“It is believed though that there has been no formal request for the
aid, however more details are likely to emerge over the coming days. For
now though, there has been a very positive reaction in the markets,”
said analyst Craig Erlam from Alpari. Nevertheless, UK
equity markets were seeking direction for most of today’s session as
investors digested a barrage of uneven economic data from across the
globe. In domestic news, retail sales volumes rose 0.3% during July, compared with analysts’ forecasts of a 0.1% decline. “Markets continue to tread water in the vacuum of no new developments in the Eurozone debt crisis, while the ability of the US to post continued mixed economic data reports just about keeps the wheels on the QE train.”
US housing starts fell in July but building permits reached their
highest level since August 2008. Initial jobless claims inched higher
but the four-week moving average dropped close to “post-crisis lows”,
according to Barclays. Meanwhile, the Philly Fed manufacturing index
improved in August but still remains in negative territory. Asian stocks finished higher on Thursday after Chinese Premier Wen Jiabao
said that he sees "growing room for monetary policy operation" as
inflation slows down. The news of slowing inward investment in China in
July added to concerns about the world’s second-largest economy. Foreign
direct investment in China fell 8.7% to a two-year low of $7.58bn last
month.
The
mining sector was broadly higher on Thursday on hopes that potential
stimulus measures in China would boost the demand for commodities. Kazakhmys, Evraz, Vedanta Resources and Anglo American were making decent gains. One producer to buck the trend however was ENRC
which extended losses after its poorly-received interim results
yesterday; Deutsche Bank, Societe Generale and UBS all trimmed their
target prices on the stock today.
Banking peers Lloyds and RBS
were among the best performers of the day, despite news that they,
along with a number of other financial companies have been called in for
questioning in the US over the alleged rigging of inter-bank lending
rates.
Publishing group Reed Elsevier was rising after
it announced the appointment of Duncan Palmer as its Chief Financial
Officer (CFO), having lured him away from US company Owens Corning.
Palmer will take over from Mark Armour, who is retiring at the end of
the year.
FTSE 250: Lonmin and African Barrick head opposite directions
Lonmin’s
shares plunged into the bottom spot after admitting it will miss its
full-year targets following a “serious outbreak of violence” at its West
Marikana mine operations in South Africa. The firm also said its Chief
Executive Officer was suffering from a serious illness and is currently
in hospital.
Meanwhile, African Barrick Gold (ABG)
surged after announcing that its holding company, Barrick Gold, is in
talks with China National Gold Group about the possibility of selling
its stake in the miner to China's largest gold producer. Should China
Gold buy up more than 30% of the voting interest in ABG from Barrick
Gold, it would then be required to make an offer for the whole of ABG's
issued ordinary share capital.
Mining peer Talvivaara slipped after lowered its production target for the year and posting an operating loss for the first half.
FTSE 100 - Risers
IMI (IMI) 918.50p +3.84%
Lloyds Banking Group (LLOY) 32.98p +3.22%
Kazakhmys (KAZ) 735.00p +2.80%
Evraz (EVR) 269.60p +2.74%
Royal Bank of Scotland Group (RBS) 227.30p +2.57%
Vedanta Resources (VED) 937.50p +1.96%
Anglo American (AAL) 1,974.50p +1.80%
Wolseley (WOS) 2,520.00p +1.78%
Tesco (TSCO) 338.30p +1.71%
Barclays (BARC) 186.20p +1.69%
FTSE 100 - Fallers
Pennon Group (PNN) 749.50p -1.90%
Eurasian Natural Resources Corp. (ENRC) 372.40p -1.90%
Vodafone Group (VOD) 185.55p -1.70%
Admiral Group (ADM) 1,162.00p -1.69%
Carnival (CCL) 2,156.00p -1.60%
ARM Holdings (ARM) 575.50p -1.46%
Experian (EXPN) 989.50p -1.25%
Prudential (PRU) 813.00p -1.22%
Bunzl (BNZL) 1,097.00p -1.17%
British American Tobacco (BATS) 3,345.00p -1.04%
FTSE 250 - Risers
African Barrick Gold (ABG) 425.00p +7.98%
Petropavlovsk (POG) 459.30p +6.12%
Avocet Mining (AVM) 92.75p +4.98%
Spectris (SXS) 1,730.00p +4.34%
Yule Catto & Co (YULC) 153.90p +4.13%
Home Retail Group (HOME) 93.00p +4.09%
Spirent Communications (SPT) 153.00p +4.08%
Rank Group (RNK) 125.70p +3.88%
Heritage Oil (HOIL) 172.80p +3.54%
Bwin.party Digital Entertainment (BPTY) 98.25p +3.42%
FTSE 250 - Fallers
Lonmin (LMI) 648.00p -6.76%
IP Group (IPO) 130.00p -4.83%
Kenmare Resources (KMR) 38.96p -2.58%
Talvivaara Mining Company (TALV) 137.00p -2.35%
Devro (DVO) 304.00p -2.31%
Bumi (BUMI) 353.00p -2.19%
Redrow (RDW) 135.30p -2.17%
Ted Baker (TED) 970.00p -2.02%
Balfour Beatty (BBY) 290.20p -1.99%
Rotork (ROR) 2,251.00p -1.87%
| FX round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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European Markets Largely Finished Thursday's Uneventful Session Higher
The
majority of the European markets ended Thursday's session in positive
territory. Trading volume was rather thin, due to a lack of any major
news that would drive the markets in any particular direction. The mixed
economic results reported yesterday by the U.S. continued to have an
impact on the markets. Investors are now of the opinion that the U.S. is
unlikely to proceed with further economic stimulus, at least in the
near term.
China's Premier Wen Jiabao has said that the economy
is still under pressure, despite some positive signs in some sectors,
the official Xinhua News Agency reported Wednesday.
During a
two-day inspection tour to Zhejiang Province, he said the foundation for
stable economic growth is still fragile and the economic hardships may
continue for some more time.
Unemployment in the U.K. will likely
rise further later this year and in 2013 due mainly to prolonged
weakness in the economy and subdued business confidence, IHS Global Insight Chief UK and European Economist Howard Archer said Wednesday.
Unemployment
is headed higher later this year and will rise further in 2013 as a
consequence of extended soft economic activity, heightened business
caution, and public-sector jobs being pared substantially, the economist
added.
The Euro Stoxx 50 index of eurozone bluechip
stocks increased by 1.01 percent, while the Stoxx Europe 50 index, which
includes some major U.K. companies, added 0.09 percent.
The DAX of Germany climbed by 0.71 percent and the CAC 40 of France gained 0.91 percent. The SMI of Switzerland finished up by 0.10 percent, but the FTSE 100 of the U.K. declined by 0.11 percent.
In Frankfurt, Merck rose by 3.44 percent. JP Morgan upgraded its rating on the stock to "Neutral" from "Underweight."
Brenntag
fell by 0.60 percent, after Berenberg reduced its rating on the stock.
Barclays initiated KWS Saat with "Underweight" rating. The stock
declined by 3.42 percent.
Barclays initiated K+S with "Overweight" rating. The stock closed higher by 0.76 percent. In London, CRH increased by 0.18 percent. JPMorgan downgraded its rating on the stock. BG Group fell by 0.26 percent, after Morgan Stanley downgraded the stock to "Equal weight" from "Overweight."
Miners were among the best performers during Thursday's session. Kazakhmys climbed by 2.73 percent and Vedanta Resources gained 1.96 percent. Fresnillo rose by 1.54 percent and Anglo American increased by 1.83 percent. BHP Billiton finished the day higher by 1.47 percent.
Zurich Insurance gained 1.24 percent in Zurich. The company reported a 19 percent drop in its second-quarter profit, but the decline was not as bad as analysts had expected.
Eurozone annual inflation remained
stable at 2.4 percent in July, final data from Eurostat showed
Thursday. The rate also matched flash estimate. On a monthly basis,
consumer prices were down 0.5 percent in July.
Employment
in Germany increased further in the second quarter, though at a slower
pace compared to the preceding quarter, preliminary data from the
Federal Statistical Office showed Thursday. The number of persons in
employment, whose place of employment is in Germany, increased 1.3
percent on an annual basis to 41.587 million in the second quarter,
slightly slower than the 1.4 percent gain recorded in the first quarter.
U.K. retail sales expanded
unexpectedly in July driven by promotions and discounting, the Office
for National Statistics revealed Thursday. Further, the upward revision
to June's retail sales boosted hopes that the economy contracted less than initially estimated in the second quarter.
Retail sales
grew 0.3 percent in July from a month ago, confounding expectations for
a 0.1 percent fall. In June, sales climbed a solid 0.8 percent, which
was revised up from 0.1 percent.
| US Market Report |
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Stocks Seeing Further Upside In Mid-Day Trading
Stocks have
moved mostly higher over the course of the trading day on Thursday
after initially showing a lack of direction. The markets have benefited
from strength that has emerged among technology stocks amid a positive
reaction to quarterly results from Cisco Systems (CSCO:Quote).
The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is up 57.38 points or 0.4 percent at 13,222.16, the Nasdaq is up 23.73 points or 0.8 percent at 3,054.66 and the S&P 500 is up 7.32 points or 0.5 percent at 1,412.85.
Tech bellwether Cisco has
helped to lead the way higher on Wall Street, with the networking giant
surging up by 8.3 percent. Earlier in the session, Cisco reached its
best intraday level in over three months.
The gain by Cisco comes
after the company reported better than expected fourth quarter adjusted
earnings. The company also announced a 75 percent increase in its
quarterly dividend to $0.14 per share.
Cisco CFO Frank Calderoni
said, "Cisco has the financial strength and flexibility to effectively
invest in our business, pursue strategic opportunities, such as
acquisitions, as well as return a minimum of 50% of our free cash flow
annually through dividends and share repurchases to our shareholders."
Meanwhile,
traders are also digesting another mixed batch of U.S. economic data,
including a report from the Commerce Department showing a drop in
housing starts but a substantial increase in building permits.
The report showed that housing starts
fell 1.1 percent to an annual rate of 746,000 in July from the revised
June estimate of 754,000. Economists had expected housing starts to dip
to 750,000 from the 760,000 originally reported for the previous month.
At the same time, the Commerce Department
said building permits surged up by 6.8 percent to an annual rate of
812,000 in July from the revised June rate of 760,000. Building permits
are seen as an indicator of future housing activity.
A separate report from the Labor Department
showed that initial jobless claims came in slightly higher than
anticipated in the week ended August 11th, although the less volatile
four-week moving average fell to its lowest level in over four months.
The Philadelphia Federal Reserve
also released a report showing that its index of regional manufacturing
increased in August compared to the previous month but remained in
negative territory for the fourth consecutive month. A negative reading
indicates a contraction in regional manufacturing activity.
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| Broker tips: ENRC, Hikma, Micro Focus |
UBS has cut its target price for mining group Eurasian Natural Resources Corp (ENRC) from 585p to 565p after first-quarter figures came in below expectations.
UBS has reduced its 2012 and 2013 EPS estimates by 4% and 7%,
respectively, mainly on the back of a higher tax rate (which moderates
from 2014 onwards). Nevertheless, the broker has maintained
its 'buy' recommendation on the stock, highlighting the board's options
to best unlock value, including demurring its international assets. Jefferies has maintained its 'buy' rating and 860p target price for pharmaceuticals group Hikma
after the firm's first-half results came in above forecasts, driven by a
better-than-expected performance from the Injectables division.
Hikma reiterated its full-year guidance and said that the Injectables
performance will be maintained in the second half. Jefferies said: "We
expect the market to focus on 'sustained 2H' injectables performance in
2H rather than lower US generics guidance given we estimate this
division is only 4% of adjusted earnings before interest and tax. Micro Focus
is a 'core cash-backed value opportunity' in the software and computer
services sector, according to Investec which has reiterated its 'buy'
ratting and 600p target price on the stock. The big news on Thursday was that the company would be undergoing a 50p-a-share cash return, equal to $130m, and a share consolidation.
"We have already modelled this level of return in our forecasts, but
assumed it would occur mid-way through the year, so the timing could
lead to a 1-3% earnings per share (EPS) uplift to our forecasts,"
Investec said. |
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