Markets cautious ahead of FOMC meeting
Market Movers
techMARK 2,130.98 +0.13%
FTSE 100 5,777.97 -0.07%
FTSE 250 11,809.36 -0.01%
With all eyes on a Federal Open Market Committee (FOMC) meeting today, UK stocks started flat on Thursday ahead of a key policy decision in the US.
"European headline shares opened tentatively this morning as investors
repressed concerns over the Eurozone debt crisis and instead remained
risk neutral as tensions began to build over whether the US FOMC will
actually announce a further round of quantitative easing during a press
conference today," said financial trader Shavaz Dhalla.
According to analyst Henry Skeoch from Barclays Research: "Markets appear to be pricing in a high probability
of the announcement of a round of monetary stimulus, as evidenced in
part by the dollar selling off following the downside surprise to the
non-farm payrolls release last Friday. As such, should the Fed fall
short of market expectations, there may be risks of a reversal of the
recent strong performance in risk assets and sharp sell-off in core
rates."
A major hurdle was cleared yesterday after the German
Constitutional Court approved the European Stability Mechanism (ESM),
clearing the way for Germany to sign the agreement into law.
FTSE 100: Next, BAE are heavy fallers in the opening hour
High Street retailer Next
tanked early on after warning: "We remain cautious about the economic
outlook. Disappointing sales in an unusual August and early September
reinforce the wisdom of this conservative approach." Revenues rose 4.8%,
while profits increased 10.2% in the first half.
Defence group BAE Systems
was a heavy faller, pulling back after surging yesterday on discussions
with aerospace giant EADS regarding a “possible combination” of the
businesses.
Accountancy software group Sage was leading
the risers as big speculation continues to lift the stock. The Daily
Mail reported earlier this week that private-equity firms KKR & Co
and Blackstone could make a £5.58bn offer.
British telecoms giant BT
was extending yesterday's gains after sealing a “ground-breaking” £152m
deal on afternoon for a range of exclusive live rights for Premiership
Rugby, dealing a massive blow to current broadcaster BSkyB.
FTSE 250: Premier Farnell, Imagination Tech head opposite directions
Electronics components supplier Premier Farnell
gained after seeing the year-on-year decline in its top line slow in
the second quarter, as it sacrificed margin to protect market share.
The day after the much ballyhooed release of Apple's iPhone5, chip designer Imagination Technologies released
a well-timed trading update in which it revealed its business momentum
has continued in the new financial year. Nevertheless, shares fell
sharply early on.
Homewares retailer Dunelm rose after
saying pre-tax profit climbed a better than expected 15.1% in the first
half and while it remains cautious of the UK consumer environment it is
confident in the future prospects of the busines
FTSE 100 - Risers
Amec (AMEC) 1,159.00p +1.76%
BT Group (BT.A) 238.80p +1.53%
Sage Group (SGE) 319.70p +1.40%
Rolls-Royce Holdings (RR.) 838.00p +1.15%
WPP (WPP) 846.00p +1.01%
Whitbread (WTB) 2,256.00p +0.89%
Vodafone Group (VOD) 175.50p +0.86%
ARM Holdings (ARM) 559.50p +0.81%
Rexam (REX) 428.60p +0.75%
Aberdeen Asset Management (ADN) 296.40p +0.71%
FTSE 100 - Fallers
Next (NXT) 3,366.00p -5.95%
BAE Systems (BA.) 344.90p -5.14%
Eurasian Natural Resources Corp. (ENRC) 326.60p -2.36%
Vedanta Resources (VED) 964.00p -2.18%
Lloyds Banking Group (LLOY) 37.69p -2.12%
Kazakhmys (KAZ) 666.00p -1.77%
Marks & Spencer Group (MKS) 369.30p -1.44%
Rio Tinto (RIO) 3,036.50p -1.32%
Glencore International (GLEN) 355.30p -1.20%
Anglo American (AAL) 1,879.50p -1.16%
FTSE 250 - Risers
Premier Farnell (PFL) 180.00p +4.77%
Ophir Energy (OPHR) 617.00p +3.70%
Smith (DS) (SMDS) 185.60p +2.60%
Dunelm Group (DNLM) 640.50p +2.48%
Gem Diamonds Ltd. (DI) (GEMD) 182.80p +2.35%
Centamin (DI) (CEY) 84.05p +2.25%
Anite (AIE) 131.10p +2.02%
Daejan Holdings (DJAN) 2,927.00p +1.88%
Essar Energy (ESSR) 110.10p +1.85%
Berkeley Group Holdings (The) (BKG) 1,492.00p +1.57%
FTSE 250 - Fallers
Imagination Technologies Group (IMG) 583.50p -4.34%
JD Sports Fashion (JD.) 703.00p -2.90%
Home Retail Group (HOME) 96.70p -2.72%
Bumi (BUMI) 285.50p -2.59%
Man Group (EMG) 81.30p -2.40%
Talvivaara Mining Company (TALV) 152.90p -2.24%
Hochschild Mining (HOC) 446.60p -2.00%
Kenmare Resources (KMR) 39.55p -1.79%
EnQuest (ENQ) 121.50p -1.78%
Investec (INVP) 388.30p -1.70%
| European broker round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Carrefour: Aurel BGC reiterates BUY with a price target of €20.00.
Credit Agricole: AlphaValue downgrades to REDUCE from add with a price target of €5.80.
Metro: AlphaValue downgrades to ADD from buy with a price target of €29.30.
UK Event Calendar
INTERIMS
Elektron Technology, Next
INTERIM DIVIDEND PAYMENT DATE
Anglo American, Glencore International, Impellam Group, Law Debenture Corp., Rio Tinto, Spirent Communications, Xstrata
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
ECB Report (EU) (09:00)
FOMC Interest Rate (US) (17:15)
Initial Jobless Claims (US) (13:30)
Producer Price Index (US) (13:30)
Treasury Budget Statement (US) (19:00)
Q2
Premier Farnell
FINALS
Brooks Macdonald Group, Centaur Media, Dunelm Group, Kier Group, Sinclair Is Pharma
AGMS
Accsys Technologies, Anite, Artemis Alpha Trust, Darty, Photo-Me International, The Real Good Food Company
TRADING ANNOUNCEMENTS
Home Retail Group
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| US Market Report |
Stocks enjoy German boost
Market movers
Dow Jones: +10 at 13,333
S&P 500: +3 at 1,437
NASDAQ Composite: +10 at 3,114
US
equities advanced for the second day in succession, encouraged by a
positive ruling out of Germany’s Constitutional Court on the Eurozone’s
new rescue-fund, the so-called ESM.
Facebook was now
one of the best perfomers after its chief executive officer, Mark
Zuckerberg, said he will move to capitalise on the opportunities offered
by mobile advertising.
Oil producer Chesapeake Energy was wanted after agreeing to sell $6.9bn of assets to narrow a cash-flow shortfall. Industrial holding company GE attracted interest after it said it could sell a $2.2bn stake in a Thai bank.
House builders such as PulteGroup perked ip after Goldman Sachs
suggested the housing sector might see an increase in activity. As
expected, Apple released the new version of its iPhone to much media
hoop-la; the shares were marginally firmer in after-hours trading.
Prices increase more slowly than forecast
Import prices rose at an 0.7% month-on-month pace in July (Consensus: 1.7%).
Oil comes off the boil
Crude
oil futures settled lower on Wednesday, snapping five days of
consecutive gains, as US weekly stockpile data showed a surprise
inventories increase. Crude for October delivery settled 16 cents lower
at $97.01 a barrel on the New York Mercantile Exchange.
Among
precious metals gold ended lower, after a volatile session, as traders
squared positions ahead of possible stimulus measures from the Federal
Reserve.
Gold for December delivery retreated $1.20 to settle
at $1,733.70 an ounce on the Comex division of the New York Mercantile
Exchange.
S&P 500 - Risers
Vulcan Materials Co. (VMC) $46.46 +10.70%
Sears Holdings Corp. (SHLD) $60.90 +7.67%
PulteGroup Inc. (PHM) $15.55 +6.00%
Abercrombie & Fitch Co. (ANF) $37.92 +5.42%
Lennar Corp. Class A (LEN) $34.52 +4.35%
Juniper Networks Inc. (JNPR) $19.33 +4.26%
E*TRADE Financial Corp. (ETFC) $9.32 +4.25%
CBRE Group Inc (CBG) $18.35 +3.97%
Advanced Micro Devices Inc. (AMD) $3.89 +3.73%
Southwestern Energy Co. (SWN) $35.39 +3.60%
S&P 500 - Fallers
Monster Beverage Corp (MNST) $50.78 -9.90%
Lorillard Inc. (LO) $115.76 -4.33%
Altria Group Inc. (MO) $33.30 -3.17%
Airgas Inc. (ARG) $83.01 -2.81%
Dean Foods Co. (DF) $16.07 -2.78%
Cliffs Natural Resources Inc. (CLF) $40.62 -2.54%
Automatic Data Processing Inc. (ADP) $57.39 -2.46%
Owens-Illinois Inc. (OI) $19.33 -2.18%
PepsiCo Inc (PEP) $70.06 -2.12%
AES Corp. (AES) $11.26 -2.09%
Dow Jones I.A - Risers
Verizon Communications Inc. (VZ) $44.89 +1.47%
General Electric Co. (GE) $21.89 +1.39%
Travelers Company Inc. (TRV) $67.54 +0.88%
JP Morgan Chase & Co. (JPM) $39.92 +0.81%
Caterpillar Inc. (CAT) $89.12 +0.59%
Home Depot Inc. (HD) $57.05 +0.58%
Dow Jones I.A - Fallers
E.I. du Pont de Nemours and Co. (DD) $50.23 -1.61%
Bank of America Corp. (BAC) $8.97 -0.66%
Intel Corp. (INTC) $23.19 -0.64%
Coca-Cola Co. (KO) $37.55 -0.58%
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| FX and Commodities round-up |
Euro shines after German court ruling
The euro rallied
to a four-month high against the dollar on Wednesday as investors
cheered the decision from a German court to reject calls to block the
ratification of the Eurozone's permanent rescue fund.
The single currency jumped to a high of $1.2937 before later trading at around $1.2893 from $1.2858 the previous session.
While
the widely anticipated decision from Germany's Constitutional Court
gives a green light to the €500bn European Stability Mechanism, the
court did rule that Germany would not contribute more than €190bn to the
rescue fund without consent from parliament.
The court decision had been widely expected but analysts said relief about the announcement spurred increased risk appetite.
The dollar index,
which measures the US currency against a basket of six major
currencies, fell to 79.729 from 79.865 on Tuesday on expectations for
Fed easing.
Most investors expect the Fed to launch another
programme of bond purchases, otherwise known as quantitative easing,
which devalues the dollar. The central bank concludes its two-day
meeting on Thursday.
Against the yen the dollar rose
to ¥77.87 from ¥77.76 on Japan's finance minister warned the central
bank would not allow continued strength in the Japanese currency after
it rose to a 14-week high against the dollar on Tuesday.
The British pound advanced to $1.6105 from $1.6066 the previous session while the Australian dollar climbed to $1.0462 from $1.0433 on Tuesday.
Oil snaps five session winning streak
Crude oil futures
settled lower on Wednesday, snapping five days of consecutive gains, as
US weekly stockpile data showed a surprise inventories increase. Crude
for October delivery settled 16 cents lower at $97.01 a barrel on the
New York Mercantile Exchange.
Crude came under pressure after
data from the US Energy Information Administration said crude supplies
increased by 2m barrels in the week ended 7th September, confounding
expectations of a 2.3m barrel decline.
The EIA also
reported a 1.2m barrel decline in gasoline inventories and an unexpected
increase in distillate stocks, up 1.5m barrels on the week. Analysts
had pencilled in a 2.4m decline in gasoline stocks while distillates
were expected to fall by 1.5m.
Traders also turned
increasingly cautious as the two-day US Federal Reserve meeting got
underway on Wednesday. Markets are widely anticipating the announcement
of further steps to bolster the economy.
Markets also digested
reports of fresh tensions in the Middle East after the US ambassador to
oil rich Libya was killed in Benghazi.
On the ICE futures exchange Brent crude traded 46 cents higher at $115.23 a barrel.
Among
precious metals gold ended lower, after a volatile session, as traders
squared positions ahead of possible stimulus measures from the Federal
Reserve.
Gold for December delivery retreated $1.20 to
settle at $1,733.70 an ounce on the Comex division of the New York
Mercantile Exchange.
Platinum stood out on Wednesday with gains reaching a five-month high on concern about turmoil and strikes in South African mining companies.
Platinum for October delivery climbed $42.60 to $1,649.60 an ounce.
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