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Miners battered by Chinese manufacturing slow-down
Market Movers
techMARK 2,126.35 -0.46%
FTSE 100 5,844.58 -0.75%
FTSE 250 11,890.81 -0.70%
London
has opened lower with miners taking a hammering after a report from
China showed manufacturing activity in the People's Republic in
September only edged up from disappointing August levels.
China´s manufacturing sector Purchasing Manufacturers' Index (PMI) for
the month of September came in at 47.8 overnight, after 47.6 in August,
for its longest streak below the 50 point threshold – which indicates
economic contraction – in eight years.
Elsewhere in Asia, Japan’s exports fell 5.8% year-on-year in August, for a third straight decline, on weakness in demand from the EU and China.
Nerves are also jangling ahead of today´s Spanish Treasury debt auction.
Back home, retail sales
figures for August are published at 9.30. Consensus expects both total
sales and core sales to have fallen by 0.3% month-on-month, as the
Olympics distracted households from their normal shopping pursuits,
economists at Barclays Research suggest.
The CBI Industrial Trends survey for September is released at 11.00 (Consensus: -15).
IMPs is smoking after trading update
In company news, Imperial Tobacco Group
has said that the overall financial position and operational
performance of the group in the year ended September 30th has been in
line with its expectations. Tobacco net revenues are expected to be up
by around four per cent with particularly good performances in its
Eastern Europe, Africa & Middle East and Asia-Pacific regions.
However, stick equivalent volumes are expected to decline by up to three
per cent, the majority of which is due to ongoing market weakness in
Ukraine and Poland and compliance with international trade sanctions
against Syria.
BSkyB has said it welcomes an announcement by Ofcom that Sky "remains a fit and proper holder of its broadcasting licences".
Utility company United Utilities
remains confident of delivering its 2010-15 regulatory out-performance
targets after a solid start to the current financial year. Revenue in
the year to the end of March 2013 should be higher than last year, but,
as expected, the increase is slightly below the allowed regulated price
rise, principally reflecting the ongoing impact of customers switching
to meters and continued lower commercial volumes.
Basket case
Online
grocer Ocado is sharply lower after an underwhelming trading update.
The firm said gross sales increased 9.9% in the 12 weeks to August 5th
2012 and that it expects an increase in the rate of sale growth in the
fourth quarter.
Year to date gross sales growth to the end of
the third quarter was 11.3%. Panmure Gordon, which is bearish on the
stock, had been looking for third quarter sales growth of 13%.
FTSE 100 - Risers
Imperial Tobacco Group (IMT) 2,379.00p +1.84%
International Consolidated Airlines Group SA (CDI) (IAG) 157.30p +1.35%
United Utilities Group (UU.) 733.00p +0.83%
British Sky Broadcasting Group (BSY) 731.50p +0.62%
Vodafone Group (VOD) 175.50p +0.60%
Severn Trent (SVT) 1,715.00p +0.18%
Capita (CPI) 762.00p 0.00%
Centrica (CNA) 335.20p -0.09%
Kingfisher (KGF) 273.50p -0.11%
Pennon Group (PNN) 744.00p -0.13%
FTSE 100 - Fallers
Evraz (EVR) 264.50p -4.68%
Vedanta Resources (VED) 1,038.00p -3.89%
Kazakhmys (KAZ) 722.50p -3.67%
Anglo American (AAL) 1,959.50p -3.66%
Antofagasta (ANTO) 1,250.00p -2.95%
Rio Tinto (RIO) 3,070.50p -2.88%
BHP Billiton (BLT) 1,945.50p -2.73%
Fresnillo (FRES) 1,819.00p -2.62%
Eurasian Natural Resources Corp. (ENRC) 348.80p -2.41%
Xstrata (XTA) 1,039.50p -2.16%
FTSE 250 - Risers
Perform Group (PER) 381.30p +2.50%
BBA Aviation (BBA) 205.90p +2.23%
Rank Group (RNK) 142.14p +1.82%
Diploma (DPLM) 478.00p +1.57%
Ruspetro (RPO) 108.50p +1.40%
easyJet (EZJ) 578.50p +0.96%
BH Macro Ltd. GBP Shares (BHMG) 1,999.00p +0.91%
IG Group Holdings (IGG) 452.70p +0.71%
Phoenix Group Holdings (DI) (PHNX) 514.50p +0.68%
Jardine Lloyd Thompson Group (JLT) 754.00p +0.67%
FTSE 250 - Fallers
Ocado Group (OCDO) 63.65p -5.28%
Lonmin (LMI) 620.50p -4.76%
Ferrexpo (FXPO) 209.90p -3.85%
Heritage Oil (HOIL) 205.10p -3.44%
Aquarius Platinum Ltd. (AQP) 45.28p -3.14%
Afren (AFR) 137.60p -2.96%
Talvivaara Mining Company (TALV) 171.20p -2.56%
Bodycote (BOY) 395.00p -2.42%
Petropavlovsk (POG) 429.60p -2.30%
Victrex (VCT) 1,359.00p -2.23%
| FX round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Yen rises across the board
The Japanese yen
rose across the board on Wednesday, shrugging off earlier weakness,
following the Bank of Japan's surprise expansion of its asset-purchase
programme.
The yen had initially fallen to a one-month low
against the dollar after the BoJ move, which comes just a week after the
Federal Reserve's bold quantitative easing announcement.
However the Japanese currency started
to recover ground on Wednesday as the ¥10 trillion in asset purchases,
around double what some had anticipated, was deemed not as bold as moves
by other central banks such as the Fed.
The dollar had risen to ¥79.22 straight after the BoJ announcement but later traded at around ¥78.33, down around 0.7%.
Meanwhile the dollar slipped
against the euro as investors cheered the latest US economic data. The
dollar index, which measures the US currency against a basket of six
currencies, fell to 79.112 versus 79.227 on Tuesday.
The euro bought
$1.3052 from $1.3041 the previous session and erased earlier gains
against the yen. The euro fell 0.5% against the yen on Wednesday at
¥102.30 after striking an earlier high of ¥103.64 while sterling was
down 0.9% at ¥126.95.
The euro has enjoyed a good run-up recently
and many believe weakness yesterday was caused by caution over whether
Spain officially asks for financial aid.
Against the dollar, the pound bought $1.6218 versus $1.6245 the day earlier.
UK Event Calendar
INTERIMS
BrainJuicer Group, Moss Bros Group, Norcon, Tawa
INTERIM DIVIDEND PAYMENT DATE
Dragon Oil, First Quantum Minerals Ltd., Hochschild Mining, Mobeus Income & Growth Vct
QUARTERLY PAYMENT DATE
Royal Dutch Shell 'A', Royal Dutch Shell 'B'
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Consumer Confidence Indicator (EU) (10:00)
Continuing Claims (US) (13:30)
Initial Jobless Claims (US) (13:30)
Leading Indicators (US) (15:00)
Philadelphia Fed Index (US) (15:00)
Producer Price Index (GER) (07:00)
ANNUAL REPORT
NCC Group
IMSS
Ocado Group
AGMS
African Copper, Best of the Best, GEONG International Ltd., NCC Group, New India Inv Trust, NWF Group, Supergroup, Trifast
TRADING ANNOUNCEMENTS
Imperial Tobacco Group
UK ECONOMIC ANNOUNCEMENTS
CBI Industrial Trends Surveys (11:00)
Internet Retail Sales (09:30)
Retail Sales (09:30)
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| US Market Report |
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BoJ juices markets
Market movers
Dow Jones: +13 at 13,578
S&P 500: +2 at 1,461
NASDAQ Composite: +5 at 3,182
US investors saluted the Bank of Japan (BoJ) after the Japanese central bank opted to beef up its quantitative easing programme.
The BoJ took markets by surprise with the announcement that it will
increase the size of its asset purchase fund to 55trn Yen (£77.46bn),
from 45trn before. The action has been taken in a bid to
weaken the Yen and – it is thought - in reaction to increasing political
pressure to take measures, although it remains to be seen how effective
they will be. US home sales data also lifted sentiment, with house builders such as PulteGroup and DR Horton
wanted as a result. The number of previously owned home sales rose 7.8%
in August to reach an annualised rate of 4.82m, higher than the
consensus forecast of around 4.6m
Breakfast of champions
US breakfast cereals maker General Mills reported earnings per share (EPS) of 66 cents for its fiscal first quarter, topping the 63 cents expected by the consensus.
Revenue rose 5% to $4.05bn with the help of its recently acquired
yoghurt unit Yoplait International. Analysts were expecting a just
slightly higher figure of $4.08bn.
Looking forward, General
Mills reiterated its full-year EPS outlook of $2.65, more or less in
line with the consensus estimate of $2.66.
Corning, which makes flat panel TV screens got a boost after a recommendation from analysts at Goldman Sachs.
Groupon,
the discount and daily deal outfit, rose sharply on news of a new
payment system product that will reduced card fees for retailers.
Mobile communications network Sprint Nextel
was the top performing blue-chip on the day RBC Capital reiterated its
"sector perform" rating for the stock. While the world and his wife have
been getting het up about the Apple iPhone 5 Sprint was busy
bragging about the forthcoming availability of the Samsung Galaxy Note
II on its 4G LTE network. The Note II from the number one mobile phone
provider in the US market will be the first phone to launch with the new
Android operating system, Jelly Bean, and will have a larger than 5" screen and a quad-core processor.
Other markets
Gold
for December delivery trended higher, boosted by the BoJ's decision,
and hit $1,781.80 an ounce at one point, before settling at $1,772.70 an
ounce, up 50 cents on the day.
The big story on the futures
market was the oil price, with the front month contract for West Texas
light, sweet crude sliding 3.5% to $91.98 a barrel, its lowest level in
more than six weeks, after the Energy Information Administration said
crude inventories rose by 8.5m barrels in the week ended September 14th.
The oil price came under additional pressure after the
Financial Times ran a story that Saudi Arabia had offered extra oil
supplies to customers in the US, Europe and Asia in a bid to put a cap
on oil price rises.
The October contract expires at the end of trading in New York tomorrow.
The value of the greenback, as measured by the dollar index, pulled back 0.1% to 79.13.
S&P 500 - Risers
Sprint Nextel Corporation (S) $5.56 +7.13%
Metropcs Communications Inc. (PCS) $11.30 +5.21%
Regions Financial Corp. (RF) $7.65 +5.08%
Gannett Co. Inc. (GCI) $18.29 +4.34%
PulteGroup Inc. (PHM) $16.43 +4.25%
Goodyear Tire & Rubber Co. (GT) $13.48 +4.09%
D. R. Horton Inc. (DHI) $22.22 +4.07%
Viacom Inc. Class B (VIAB) $53.55 +3.48%
AutoZone Inc. (AZO) $369.84 +3.35%
Vulcan Materials Co. (VMC) $47.57 +2.94%
S&P 500 - Fallers
KLA-Tencor Corp. (KLAC) $48.43 -4.76%
Waste Management Inc. (WM) $32.69 -3.68%
Alpha Natural Res (ANR) $7.63 -3.17%
Lam Research Corp. (LRCX) $32.85 -2.52%
Newfield Exploration Co (NFX) $33.45 -2.39%
Rowan Companies plc (RDC) $35.97 -2.39%
Charles Schwab Corp. (SCHW) $13.65 -2.08%
Mattel Inc. (MAT) $35.25 -2.06%
Nabors Industries Ltd. (NBR) $15.65 -2.00%
Occidental Petroleum Corp. (OXY) $87.47 -1.99%
Dow Jones I.A - Risers
Walt Disney Co. (DIS) $52.70 +1.54%
Kraft Foods Inc. (KFT) $40.85 +1.05%
Home Depot Inc. (HD) $59.47 +1.04%
Dow Jones I.A - Fallers
Exxon Mobil Corp. (XOM) $90.57 -1.18%
Intel Corp. (INTC) $23.15 -0.94%
Hewlett-Packard Co. (HPQ) $18.10 -0.82%
Boeing Co. (BA) $69.90 -0.78%
Microsoft Corp. (MSFT) $31.05 -0.39%
Travelers Company Inc. (TRV) $68.23 -0.34%
Chevron Corp. (CVX) $116.60 -0.32%
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| Thursday newspaper round-up |
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BP, BAE, China
BP
is close to ditching its troublesome Russian joint venture and
resurrecting a controversial Arctic exploration alliance after holding
“positive” talks with Vladimir Putin. Bob Dudley, BP’s chief executive,
Carl-Henric Svanberg, its chairman, and Igor Sechin, the boss of
Rosneft, the Kremlin-backed oil firm, attended a private meeting with
the Russian President at his retreat in the Black Sea resort of Sochi on
Tuesday. BP is in advanced talks with Rosneft about selling its 50 per
cent stake in the TNK-BP joint venture. Industry sources in Moscow
believe that the sale would pave the way for the British oil firm to
form another alliance with Rosneft to explore the Russian Arctic, The
Times reports.
In a letter to EADS staff which marks Mr Enders first comments on the £30bn merger, he said EADS and BAE
represent a "perfect fit" but warns there is “serious work to do” to
convince shareholders and governments to back the deal. Mr Enders
confirms in the letter that EADS and BAE are focused on winning approval
for the deal from governments, including the US, UK, France and
Germany. These talks are “constructive and advanced”, he adds, despite
concerns about national security. All the governments must voice their
approval for the deal or it will face collapse. Britain's "golden share"
in BAE means it can veto any merger or takeover of the company. BAE is
also understood to be demanding that Germany and France loosen their
grip on EADS's strategy by losing their right to nominate board members
and vote as a block, The Telegraph says.
More than 2,000 Britons in Monaco
are costing the UK economy £1bn a year in lost tax revenue. An
investigation by The Times into tax avoidance has revealed the scale of
activity in the principality, where a wealthy elite reaps the benefits
of British assets and connections, but escapes the levies that apply to
other citizens. Some have been awarded knighthoods, while others have
been able to make political donations — despite government pledges to
close a loophole enabling them to do so.
François Hollande and
Angela Merkel will seek to agree a joint position at a meeting on
Saturday on the €35bn combination of EADS and BAE Systems to
create the world’s largest defence and aerospace company by revenue.
Approval by the French president and German chancellor is crucial to the
deal on which EADS hopes to make an announcement soon. The heads of
state are due to meet in Ludwigsburg in Germany to assess the Eurozone
crisis but the EADS-BAE deal will be discussed, The Financial Times says.
The number of Britons contributing to workplace pension schemes
has fallen to its lowest since records began in 1953, fuelling fears
that people are not saving enough for their old age. In its latest
snapshot of the pensions sector, the Office for National Statistics
found that the number of people putting money into workplace pensions in
the private sector fell to 2.9m last year, from 3m in 2010 and the peak
of 8.1m in 1967. Joanne Segars, chief executive of the National
Association of Pension Funds, said: “The ongoing slide in pensions
uptake in the private sector is deeply worrying. Our society isn’t
saving enough for its old age and millions of workers are set to end up
scraping by on just the state pension,” writes The Times.
The EU has stalled a controversial trade case
against Chinese telecommunications companies, defusing a row with
Beijing on the eve of premier Wen Jiabao’s last summit with European
leaders. Karel De Gucht, the EU trade commissioner, has told officials
that the anti-subsidy case, which was seen as proof of a more assertive
stance towards China, required stronger evidence before it could
proceed, according to people briefed on the meeting. Commission staff
insist the move is not tied to Mr Wen’s visit on Thursday, or to
stronger pressure from Beijing – as well as from some EU member states,
worried about Chinese retaliation – to drop the case, The Financial
Times explains.
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