London open: Miners gain as stimulus hopes lift the mood
Market Movers
- techMARK 2,099.17 +0.15%
- FTSE 100 5,750.94 +0.69%
- FTSE 250 11,497.09 +0.76%
- Chinese PMI drops, but stimulus hopes increase
- US data in focus ahead of Fed meeting
- Eyes turn to ECB conference
Stock markets across Europe opened moderately higher on Monday morning
as some gloomy data from China spurred hopes that the country would join
the list of nations who are expected to act to stimulate economic
activity.
Nevertheless, today is likely to be relatively quiet on the markets due to the Labour Day holiday in the US.
According to a monthly survey by HSBC, the China manufacturing purchasing managers' index
(PMI) dropped from 49.3 in July to 47.6 in August, its lowest reading
since March 2009. The news follows the official PMI data from last week
which fell to a nine-month low of 49.2. Any figure below 50 indicates a
contraction.
However, said market analyst Michael Hewson from
CMC Markets said this morning: "Despite the sharp drop, the falls have
raised expectations of additional easing measures by the People's Bank
of China in the next week or so."
Following on from last week's peak of the Federal Reserve
Chairman Ben Bernanke's closely watched speech at the Jackson Hole
symposium, markets widely believe that further quantitative easing (QE)
is now on the cards for the central bank's next meeting on September
13th and 14th. However, investors will be keeping a close eye on
payrolls and manufacturing data due out this week as any decent figures
could ease the Fed's concerns about the economy, delaying (or even
preventing) any action.
Meanwhile, as analyst Craig Erlam from
Alpari explains this morning, the focus on markets now shifts from one
central bank to another, the European Central Bank (ECB). "Last
month Mario Draghi [ECB President] hinted that the ECB is about to
restart a programme of government bond purchases. Since Draghi's
original comments, details of the programme have been leaked out in the
media. This has led people to believe that it will be unveiled at the
press conference on Thursday."
Miners dominate the risers early on
Nine
out of the top 10 risers were from the mining sector in the opening
hour as stimulus hopes helped the outlook for the demand of commodities.
Evraz, Fresnillo, Antofagasta and Rangold were among the best performers.
Several stocks were being moved by broker ratings changes this morning. Chip group ARM Holdings was a heavy faller on the FTSE 100 after Deutsche Bank downgraded its recommendation to 'sell', while supermarket firm Morrisons was in the red after Nomura cut its rating to 'neutral'.
Meanwhile, Home Retail
was making gains after Investec upgraded its rating on the stock from
'sell' to 'buy', saying that shares should react positively "to evidence
of more resilient trading at Argos" after the group's second-quarter
trading update next week.
Mining group Talvivaara
surged early on after reassuring investors that rumours regarding the
development of the company's cash position during the remainder of the
year and ongoing or planned personnel reductions are incorrect.
Africa-focused oil group Ophir Energy rose after significantly upping estimates of potential resources at one of its sites in Tanzania.
FTSE 100 - Risers
Evraz (EVR) 232.90p +3.51%
Fresnillo (FRES) 1,614.00p +3.40%
Vedanta Resources (VED) 889.00p +2.48%
Kazakhmys (KAZ) 607.50p +2.45%
Randgold Resources Ltd. (RRS) 6,475.00p +2.45%
Eurasian Natural Resources Corp. (ENRC) 309.20p +2.42%
Antofagasta (ANTO) 1,131.00p +2.17%
BHP Billiton (BLT) 1,875.00p +2.12%
Rio Tinto (RIO) 2,787.50p +1.90%
Rolls-Royce Holdings (RR.) 836.00p +1.83%
FTSE 100 - Fallers
ARM Holdings (ARM) 561.00p -2.26%
Admiral Group (ADM) 1,167.00p -1.60%
Morrison (Wm) Supermarkets (MRW) 276.70p -1.18%
Glencore International (GLEN) 383.50p -0.40%
Ashmore Group (ASHM) 328.20p -0.24%
AstraZeneca (AZN) 2,929.50p -0.24%
Shire Plc (SHP) 1,913.00p -0.16%
Babcock International Group (BAB) 936.50p -0.05%
FTSE 250 - Risers
Talvivaara Mining Company (TALV) 137.20p +9.41%
Ophir Energy (OPHR) 598.00p +5.93%
Home Retail Group (HOME) 99.35p +5.86%
Petropavlovsk (POG) 360.00p +3.48%
Raven Russia Ltd (RUS) 64.45p +3.12%
New World Resources A Shares (NWR) 278.80p +2.92%
Dixons Retail (DXNS) 18.06p +2.91%
Paragon Group Of Companies (PAG) 194.20p +2.70%
Kenmare Resources (KMR) 39.33p +2.69%
Lonmin (LMI) 588.00p +2.62%
FTSE 250 - Fallers
Henderson Group (HGG) 103.60p -2.36%
Bumi (BUMI) 312.40p -1.76%
CSR (CSR) 320.50p -1.57%
Cape (CIU) 239.00p -1.40%
Shanks Group (SKS) 88.80p -1.11%
ITE Group (ITE) 200.90p -0.94%
Jupiter Fund Management (JUP) 223.60p -0.80%
Menzies(John) (MNZS) 625.00p -0.79%
Ashtead Group (AHT) 281.20p -0.78%
UK Event Calendar
Monday September 03
INTERIMS
Biome Technologies, Cupid, Pennant International Group, Staffline Group
INTERIM DIVIDEND PAYMENT DATE
St. Modwen Properties
QUARTERLY PAYMENT DATE
JPMorgan Claverhouse Inv Trust
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
PMI Manufacturing (EU) (09:00)
PMI Manufacturing (GER) (08:55)
Q4
Kofax
FINALS
Kofax, Sweett Group
AGMS
Galileo Resources
UK ECONOMIC ANNOUNCEMENTS
PMI Manufacturing (09:30)
FINAL DIVIDEND PAYMENT DATE
BT Group
| Europe Market Report |
 |
| FTSE 100 | Euronext | Dax perf | CAC 40 |
 |  |  |  |
|
Europe open: Slight gains at start of crucial week
-Markets take cue from Wall Street on Friday
-ECB President to speak to EU parliament this afternoon
-Majority of Germans do not support further aid for Greece
FTSE-100: 0.49%
Dax-30: 0.23%
Cac-40: 0.53%
FTSE-Mibtel 30: 0.33%
Ibex 35: 0.09%
Stoxx 600: 0.32%
The main European equity benchmarks have begun the day slightly higher,
following Wall Street´s lead from last Friday. Those gains came in
reaction to US Federal Reserve President Ben S.Bernanke´s speech at
Jackson Hole (Wyoming) which seem to point to more quantitative easing
measures to come.
In that same vein, investors seem undaunted
by the bevy of weaker than expected economic data out in Asia overnight,
in China, India and Australia.
European Central Bank
President Mario Draghi is expected to speak to the European parliament
-in a closed session- on proposals for a banking union this afternoon.
Also worth pointing out, a new poll from the Financial Times shows that
only a quarter of Germans favour further financial aid for Greece to
stay within the Eurozone. This as the Mediterranean country presses for a
two year extension of its fiscal adjustment program and ahead of a
meeting, tomorrow, between its Prime Minister and Germany´s Finance
Minister.
Not to be missed, Wall Street will remain closed
today in observance of Memorial Day, which ought to keep trading
conditions subdued. However, volatility could rise towards the end of
the week, as investors react to the European Central Bank´s and Bank of
England´s rate-settng meetings, as well as the latest monthly employment
data out Stateside on Friday.
Spain to inject up to €5bn into Bankia
The Spanish government is expected to inject up to €5bn into failed lender Bankia, which has just reported a €4.45bn first half loss.
Fressenius Medical has abandoned its take-over offer for Rhone Klinikum.
From a sector stand-point the best performance on the DJ Stoxx 600 is
now to be seen in shares of the following industrial groups: basic
resources (0.96%), utilities (0.57%) and personal goods (0.80%).
Eurozone Manufacturing PMI due out later
Markit´s Eurozone purchasing managers´ index for the month of August is slated for release at 08:58.
Slight falls in other asset classes
The euro/dollar is now down by 0.04% to the 1.2570 dollar mark.
Front month Brent crude futures are falling by 0.11% to the 114.44 dollar level on the ICE.
| US Market Report |
US close: Bernanke will push ahead with QE3, but opposition exists
-A further round of QE could be forthcoming in September
Dow Jones Industrial: 0.69%
Nasdaq Comp.: 0.60%
S&P 500: 0.51%
The main New York equity benchmarks closed the week slightly lower but
up as a whole for the month of August, albeit if on very low trading
volumes. The Dow Jones Industrials gained 0.6% for the month while the
S&P 500 rose by 0.3%.
That despite losses in some Eurozone
periphery debt markets, such as Spain´s, after S&P downgraded the
rating on the autonomous region of Catalonia.
Helping stocks
along perhaps, US Fed chairman Ben S.Bernanke defended the rationale
behind a possible further expansion of his policy of quantitative easing
(QE) at the Jackson Hole Symposium.
Some noted observers
believe that this heralds a new round of stimulus come the Fed´s next
meeting in two weeks´ time. Be that as it may, it would seem the Fed
chairman faces quite a bit of political opposition, especially from
Republicans on Capitol Hill.
US Airways and American Airlines were two of the day´s best gainers on news of a possible tie-up.
From a sector stand-point platinum (4.59%), gold (4.42%), mining (2.53%) and tires (2.49%) were the best performers.
Economic data comes in mostly ahead of consensus
The final reading on the University of Michigan´s consumer sentiment
index for the month of August has come in at 74.3, well ahead of the
73.6 expected by the consensus.
The Chicago NAPM´s regional
manufacturing sector purchasing managers´ index for the month of August
has come in at 53 points, versus 53.7 for the month before (Consensus:
53.2). Both the new orders and employment sub-indices improved.
Factory orders grew by 2.8% month-on-month in July (Consensus: 2.0%), after a fall of 0.5% in June.
Bonds gain as Bernanke will probably proceed with further QE3
10 year US Treasuries gained 22/32 dollars, with yields falling on the same retreating to 1.55%.
Front month West Texas crude futures rose by 2.05% to the 96.56 dollar per barrel mark on the NYMEX.
S&P 500 - Risers
Newmont Mining Corp. (NEM) $50.68 +4.39%
Freeport-McMoRan Copper & Gold Inc. (FCX) $36.11 +4.09%
Goodyear Tire & Rubber Co. (GT) $12.20 +3.57%
National Oilwell Varco Inc. (NOV) $78.80 +3.41%
SAIC Inc. (SAI) $12.21 +3.39%
Corning Inc. (GLW) $11.99 +3.18%
Newfield Exploration Co (NFX) $32.63 +3.13%
Masco Corp. (MAS) $14.16 +2.91%
LSI Corporation (LSI) $7.79 +2.91%
Denbury Resources Inc. (DNR) $15.49 +2.79%
S&P 500 - Fallers
Frontier Communications Co. (FTR) $4.62 -2.53%
Juniper Networks Inc. (JNPR) $17.44 -1.75%
Tenet Healthcare Corp. (THC) $5.19 -1.70%
CONSOL Energy Inc. (CNX) $30.20 -1.66%
Altria Group Inc. (MO) $33.96 -1.39%
Philip Morris International Inc. (PM) $89.30 -1.38%
R.R. Donnelley & Sons Co. (RRD) $10.98 -1.35%
Netflix Inc. (NFLX) $59.72 -1.26%
Family Dollar Stores Inc. (FDO) $63.64 -1.15%
Phillips 66 Common Stock (PSX) $42.00 -1.13%
Dow Jones I.A - Risers
Intel Corp. (INTC) $24.83 +2.31%
American Express Co. (AXP) $58.30 +1.98%
Microsoft Corp. (MSFT) $30.82 +1.65%
Alcoa Inc. (AA) $8.56 +1.42%
Chevron Corp. (CVX) $112.16 +1.11%
Caterpillar Inc. (CAT) $85.33 +1.02%
Bank of America Corp. (BAC) $7.99 +1.01%
United Technologies Corp. (UTX) $79.85 +1.00%
Cisco Systems Inc. (CSCO) $19.08 +0.95%
3M Co. (MMM) $92.60 +0.92%
Dow Jones I.A - Fallers
Merck & Co. Inc. (MRK) $43.05 -0.16%
AT&T Inc. (T) $36.64 -0.14%
Nasdaq 100 - Risers
Randgold Resources Ltd. Ads (GOLD) $102.97 +5.11%
Electronic Arts Inc. (EA) $13.33 +2.54%
Altera Corp. (ALTR) $37.33 +2.39%
Intel Corp. (INTC) $24.83 +2.31%
Lam Research Corp. (LRCX) $34.13 +2.22%
Autodesk Inc. (ADSK) $31.05 +2.10%
eBay Inc. (EBAY) $47.47 +1.98%
Flextronics International Ltd. (FLEX) $6.73 +1.97%
Applied Materials Inc. (AMAT) $11.69 +1.92%
Linear Technology Corp. (LLTC) $33.03 +1.77%
Nasdaq 100 - Fallers
Netflix Inc. (NFLX) $59.72 -1.26%
Dell Inc. (DELL) $10.59 -0.84%
Costco Wholesale Corp. (COST) $97.87 -0.73%
Fossil Inc. (FOSL) $84.95 -0.68%
Seagate Technology Plc (STX) $32.01 -0.62%
Adobe Systems Inc. (ADBE) $31.27 -0.60%
DIRECTV (DTV) $52.09 -0.52%
Baidu Inc. (BIDU) $111.44 -0.51%
Cerner Corp. (CERN) $73.14 -0.48%
Vodafone Group Plc ADS (VOD) $28.92 -0.45% |
| Newspaper Round Up |
Monday newspaper round-up: Small business, ECB, China
George Osborne has made his latest bid to prop up the faltering economy by revealing plans to launch a small business bank
to make it easier for growing companies to gain access to
"multi-billion pounds" of government funding. The Chancellor believes
the bank will play a key role as part of a series of measures planned to
provide an autumn boost for the economy and meet business calls for a
growth strategy. However, no new government funding will be put into the
bank. "We are getting on top of the deficit," Mr Osborne said. "These
are difficult times for the British economy, it's a difficult time for
the world economy but our economy is healing. We have to do more and we
have to do it faster," The Telegraph reports.
The European Central Bank
came under renewed pressure to do more to tackle the euro crisis as the
head of Organisation for Economic Cooperation and Development and the
Spanish Prime Minister urged action yesterday. Angel Gurria, the OECD
Secretary-General, called for an immediate resumption of bond-buying by
the ECB and said that without it the system was at stake and the euro at
risk. Mariano Rajoy echoed that sentiment in an interview with Bild,
adding that recent remarks by the ECB head, Mario Draghi, showed
"determination to solve the problem." The pleas came as Mr Draghi seeks
to grind down German-led resistance to government bond buying, which has
the effect of bringing down the cost of borrowing of troubled Eurozone
countries such as Spain and Italy, The Times says.
China's manufacturing activity
fell to its lowest level in more than three years in August as the
global economic slowdown continues to weigh on the world's largest
exporter, HSBC has said. The final reading of the British banking
giant's closely-watched purchasing managers' index (PMI), which gauges
nationwide manufacturing activity, slid to 47.6 last month from 49.3 in
July, HSBC said in a statement. This was the lowest since March 2009 and
marked the 10th consecutive monthly fall, the bank said. It chimed with
the official PMI figure released at the weekend, which hit a nine-month
low of 49.2. A PMI reading above 50 indicates expansion, while one
below 50 points to contraction.
The World Bank's Food Price
Index soared by 10% in July, but global grain stocks are currently high
enough to prevent a repeat of 2008's food riots, according to the
World Bank. Things could rapidly change though. The index, which weighs
the US dollar price of internationally traded food commodities, shows
that sharp price increases were felt across the board in July. Rice,
which fell 4%, was the only major exception. The World Bank was
reassured by the decline in rice prices. "Large supplies of rice from
bumper crops and increasing competition for Thailand (the world's
largest exporter) have led to a recent rice price decline," it said.
"Weak demand from the eurozone and a slight growth slowdown in China and
the developing world in general all favour price moderation." However,
it warned that "the jury was still out", citing potential threats such
as major producers pursuing "panic policies" such as restricting exports
and weather developments in the near future "especially related to el
Niño," according to The Telegraph.
EDF has been holding
talks with China about sharing the soaring cost of building £10bn worth
of new reactors at Hinkley Point, Somerset. The move underlines growing
pressure on the French company's internal finances and has reignited a
fractious debate about Communist state-run businesses playing a critical
role in sensitive western energy infrastructure. The overtures to
Beijing's state corporations – as well as approaches to Middle Eastern
sovereign wealth funds – come as EDF faces growing investment demands in
France and the UK that have sent debt levels rocketing to €39.7bn
(£30bn). "We have always said we were open to the idea of other partners
investing in the project. As we approach our final investment decision,
it is right to consider funding options including seeking additional
partners," said an EDF spokesman, The Guardian writes.
Only a quarter of Germans think Greece
should stay in the Eurozone or get more help from other countries in
the currency union, a Financial Times/Harris poll has found. The
overwhelming verdict highlights Angela Merkel's domestic dilemma as she
comes under pressure in Europe to agree more time or money for Greece to
get its €174bn second bailout back on track. Negative German sentiment,
detailed in the poll conducted in August, stands in marked contrast to
that in Italy and Spain, where respondents were far more reluctant to
cut Athens loose. The diverging views pose a big challenge to EU leaders
who this month must again grapple with how to deal with a new Greek
government poised to ask for two more years to implement painful
economic and government reforms demanded by international lenders as
part of their three-year bailout program, The Financial Times explains.
|
| | | |
| | | |
|
No comments:
Post a Comment