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Stocks inch higher, but Chemring rockets
Market Movers
techMARK 2,128.18 +0.40%
FTSE 100 5,852.42 +0.31%
FTSE 250 11,618.10 +1.01%
Merkel backs Draghi's bond-buying proposal US data lifts stocks late on Chemring receives interest from The Carlyle Group Global equity markets
were lifted higher on Friday on the back of hopes of imminent action
from European officials and some decent economic data in the US.
However, gains in London were only modest with just 19 points separating
the intra-day low and high. "It’s been pretty much 'more of
the same' today on equity markets with London struggling to maintain any
kind of momentum, though Italian and Spanish markets have outperformed
on the back of raised expectations of ECB intervention in the coming
weeks," said market analyst Michael Hewson from CMC Markets. The mood was lifted this morning after German Chancellor Angela Merkel
threw her weight behind the proposal by European Central Bank President
Mario Draghi to buy sovereign peripheral bonds in order to bring down
yields in indebted countries such as Spain and Italy. She said that
Draghi's pledge to do "whatever it takes to preserve the euro" was
"completely in line" with the views of euro-area officials. US stocks
edged higher early on after the University of Michigan-Thomson Reuters
consumer-sentiment index rose from 72.3 to 73.6 in August, better than
forecasts of no change. Meanwhile, the Conference Board's leading
economic index increased by 0.4% in July, better than the 0.3% growth
estimate.
Shares in military counter-measures specialist Chemring
rocketed in the last hour of trade today after confirming that it has
received a "highly preliminary expression of interest" from private
equity firm The Carlyle Group in relation to a possible offer.
Platinum producer Lonmin
pared earlier losses this afternoon but remained lower after riot
police shot dead dozens of its workforce at the Marikana project in
South Africa, as a week of protests over pay have turned the FTSE 250
group's mine into a war zone. It is thought that around 35 people have
now been killed since violent clashes erupted a week ago.
While trade unions have blamed Lonmin for the trouble, saying that their
negotiations with employees outside of union structures had started the
protests, the firm's Chairman Roger Phillimore said last night that
this "is clearly a public order rather than labour relations associated
matter."
Stocks get a lift from Apple
Electronics stocks were being dragged higher on news that shares in US tech giant Apple
were coming close to a record high, after having already risen 57% this
year, on reports that it has started manufacturing the iPad mini.
Chip designer ARM Holdings
was making gains today after Barclays said that it is in a decent
position to benefit from the increased demand of high-tech smart
devices.
Electronic components group Laird was also
higher after UBS upgraded its rating on the stock to 'buy', saying that
Apple's iPhone 5 launch would drive growth in the second half.
Barclays, Royal Bank of Scotland and Lloyds were in demand today as banking stocks across Europe made gains on improving developments in the Eurozone.
Water group Pennon was
sinking after saying that trading at its waste management unit Viridor
has been significantly below the high level of the first half of the
previous fiscal year with recyclate prices remaining under pressure.
Casino and online gaming group Rank advanced after saying that revenues in the 12 months to June 30th rose 3.4%, while pre-tax profits jumped 9.0%.
FTSE 100 Risers
Lloyds Banking Group (LLOY) 34.22p +3.74%
Barclays (BARC) 192.85p +3.57%
CRH (CRH) 1,151.00p +2.86%
GKN (GKN) 226.10p +2.45%
Kingfisher (KGF) 295.60p +2.32%
Weir Group (WEIR) 1,778.00p +2.30%
Smiths Group (SMIN) 1,069.00p +2.00%
Royal Bank of Scotland Group (RBS) 231.60p +1.89%
Aggreko (AGK) 2,301.00p +1.81%
Aberdeen Asset Management (ADN) 281.60p +1.73%
FTSE 100 - Fallers
Anglo American (AAL) 1,927.50p -2.38%
Shire Plc (SHP) 1,980.00p -1.39%
Smith & Nephew (SN.) 662.00p -1.34%
GlaxoSmithKline (GSK) 1,472.00p -0.84%
AstraZeneca (AZN) 3,000.50p -0.83%
Diageo (DGE) 1,686.50p -0.79%
Eurasian Natural Resources Corp. (ENRC) 369.70p -0.72%
Resolution Ltd. (RSL) 225.80p -0.70%
United Utilities Group (UU.) 721.50p -0.62%
British American Tobacco (BATS) 3,325.00p -0.60%
FTSE 250 - Risers
Chemring Group (CHG) 414.70p +32.32%
Rank Group (RNK) 132.70p +5.57%
Centamin (DI) (CEY) 73.70p +5.29%
Hunting (HTG) 822.00p +5.25%
Ultra Electronics Holdings (ULE) 1,592.00p +5.01%
Ferrexpo (FXPO) 200.70p +4.42%
Redrow (RDW) 141.10p +4.29%
Aquarius Platinum Ltd. (AQP) 37.77p +4.02%
Ophir Energy (OPHR) 531.50p +4.01%
Michael Page International (MPI) 383.50p +3.65%
FTSE 250 - Fallers
Daejan Holdings (DJAN) 2,950.00p -3.15%
IP Group (IPO) 126.00p -3.08%
Barr (A.G.) (BAG) 439.20p -2.72%
JD Sports Fashion (JD.) 675.00p -2.53%
Heritage Oil (HOIL) 169.30p -2.03%
Petra Diamonds Ltd.(DI) (PDL) 103.50p -1.80%
Gem Diamonds Ltd. (DI) (GEMD) 187.80p -1.68%
Hikma Pharmaceuticals (HIK) 738.00p -1.53%
Shaftesbury (SHB) 530.00p -1.40%
Lonmin (LMI) 639.50p -1.31%
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European Markets Climbed On Merkel Comments & U.S. Consumer Confidence Data
The European markets
gained ground on German Chancellor Angela Merkel's comments on
Thursday. Merkel stated that Germany is committed to do everything it
can to maintain the euro, which helped keep alive hopes that the ECB
will take some decisive steps to reduce surging borrowing costs. The
unexpected increase in U.S. consumer confidence provided further support
to the markets in the afternoon.
Finland is preparing measures
to face any kind of eventuality in the face of a breakup of the euro
currency-bloc, the country's Foreign Minister Erkki Tuomioja told the British newspaper The Daily Telegraph.
"We
have to face openly the possibility of a euro-break up," Tuomioja was
quoted as saying on Thursday. "Our officials, like everybody else and
like every general staff, have some sort of operational plan for any
eventuality," he told the daily.
The European Commission
wants the European Central Bank to act as the supervisor for all major
banks in the euro area, German business daily Handelsblatt reported
Friday.
The Commission is expected to put forward a
proposal in this regard in September. According to the plan, the
respective national authorities will be supervising the day-to-day
activities of the banks and the ECB will intervene whenever there is a
"dangerous risk."
Spanish banks' bad loans reached the highest on
record in June, the Bank of Spain reported Friday. Bad loans rose to
9.42 percent of total lending in June, compared to 8.95 percent in May.
Non-performing loans increased EUR 8.4 billion in June, to EUR 164.4
billion.
The Euro Stoxx 50 index of Eurozone bluechip
stocks increased by 0.49 percent, while the Stoxx Europe 50 index, which
includes some major U.K. companies, added 0.24 percent.
The DAX of Germany climbed by 0.64 percent and the CAC 40 of France gained 0.23 percent. The FTSE 100 of the U.K. rose by 0.28 percent and the SMI of Switzerland finished up by 0.17 percent.
In Frankfurt, Commerzbank increased by 3.27 percent and Deutsche Bank gained 3.70 percent.
In Paris, Credit Agricole rose by 3.33 percent. Societe Generale added 2.63 percent and BNP Paribas climbed by 1.51 percent.
In London, Vodafone rose
by 0.22 percent. The U.S Department of Justice cleared the $3.9 billion
deal by Verizon Wireless, a joint venture of Verizon Communications and
Vodafone Plc., to buy spectrum from cable operators including Comcast
Corp.
Rio Tinto fell by 0.39 percent, after the miner
priced $3.0 billion of fixed rate bonds with a weighted average coupon
of 2.67 percent and a weighted average maturity of 12.9 years.
Shares of Lonmin ended
the session lower by 1.31 percent, after reports of a deadly clash
between police and striking workers at a platinum mine in South Africa.
GlaxoSmithKline decreased by 0.84 percent, after the announced shutdown of a factory in western India.
Barclays rose by 3.73 percent and HSBC gained 0.92 percent. Lloyds Banking Group increased by 3.74 percent and Royal Bank of Scotland added 1.89 percent.
Swiss Life Holding climbed by 3.05 percent in Zurich, even though the company reported a decline in its 2012 first-half net profit.
Eurozone
current account surplus increased in June, data published by the
European Central Bank showed Friday. The seasonally adjusted current
account surplus rose to EUR 12.7 billion in June from EUR 10.3 billion
in May and EUR 5.5 billion in April.
Eurozone's foreign trade
surplus increased in June, the latest figures published by Eurostat
showed Friday. The trade surplus rose to EUR 14.9 billion in June from
EUR 7.1 billion in May. A year ago, the balance was in a surplus of EUR
0.2 billion.
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Stocks Posting Modest Gains On Consumer Sentiment Data
Stocks are
showing modest gains in early trading on Friday. Strong consumer
sentiment data has helped the market extend a rally that began the
previous day.
The Dow has climbed 16.43 points, or 0.1 percent, to reach 13,266.54. The Nasdaq is higher by 2.25 points, or 0.1 percent, to hit 3,065.06. The S&P 500 has advanced less than a point to 1,416.41.
New
results from a closely watched survey showed that consumer attitudes
have improved in August, rising to its highest level in three months.
The Thomson Reuters/University of Michigan consumer sentiment index
advanced to 73.6 from a reading of 72.3 last month.
The result topped the figure predicted by economists.
The
early advance is building on a gain seen during Thursday's trading,
when stocks shook off the doldrums of the previous few days. There had
been a sideways move through the early part of the week, as traders
digested the latest round of economic data.
In corporate news, retailer Gap
revealed earnings for the second quarter that rose 29 percent from last
year and topped the amount analysts had predicted. The company also
raised its forecast.
Shares of the company are up $1.58, or 4.6 percent, to reach $35.92
Ann Inc.
is another retailer showing strength in the early going. The owner of
the Ann Taylor chain of women's clothing stores beat expectations with
its quarterly profit and issued a strong outlook.
Shares of Ann are up $5.17, or 18.4 percent, to reach $33.31.
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Lloyds, Lonmin, Laird
Given Lloyds's resilient share price performance so far this year, Investec has downgraded its rating on the bank from 'buy' to 'hold'.
Analyst Ian Gordon said: "Up 27%, Lloyds’ shareholders can take
satisfaction from the stock’s year-to-date outperformance against all
other UK banks." Nevertheless, the broker said that the outlook for
return on equity (RoE) recovery "remains painfully slow, with scope for
negative surprise".
Panmure Gordon has reiterated its 'buy' rating and 1,186p target price for platinum producer Lonmin,
but its production forecasts have been lowered due to the
headline-hitting strikes at its Marikana mine which have resulted in the
deaths of more than 30 of its workers.
As a result, Panmure
has reduced its earnings before interest, tax, depreciation and
amortisation (EBITDA) forecast for this year from $181m to just $138m.
Net debt estimates have also risen from $516m to $539m which moves the
net debt to EBITDA ratio to 3.9 - "uncomfortably close to the 4.0 times
debt convenient".
With growth momentum improving at Laird,
UBS has upgraded its recommendation on the stock from 'neutral' to
'buy' and raised its forecasts for the electrical components
manufacturer.
"We expect revenue growth for Laird to
accelerate in H2 [second half of the year] driven by the new iPhone
launch by Apple, a lap-top product cycle driven by Windows 8 and a
recovery in some other end markets such as telecom infrastructure," the
broker said in a research report on Friday.
After increasing
its medium-term revenue forecasts by 2-3% and earnings per share
estimates by 7-12%, UBS lifts its target price from 198p to 235p.
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