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BP and ex-div stocks provide a drag early on
Market Movers
techMARK 2,086.13 +0.23%
FTSE 100 5,646.70 -0.45%
FTSE 250 11,413.57 -0.13%
Following
a 1.5 per cent fall for the Footsie the day before, UK stocks opened
lower once again on Wednesday morning with investors likely to remain
cautious ahead of tomorrow's eagerly anticipated European Central Bank (ECB) monetary policy decision tomorrow.
ECB President Mario Draghi is
widely expected to unveil plans on Thursday for buying sovereign debt
in order to bring down bond yields in peripheral nations. "Whatever the
decision however, there is still a long way to go before we go back to
any sense of normality," said trader Simon Furlong from Spreadex this
morning.
Weighing on estimates were gross domestic product (GDP) growth figures from Australia
this morning. According to the Australian Bureau of Statistics,
second-quarter GDP rose by 0.6%, below the 0.8% growth expected.
Meanwhile, the HSBC China
service sector purchasing managers’ index for the month of August
revealed a small slowdown, retreating to 52 points from 53.1 in the
month before.
Bank of Japan (BoJ) board member Ryuzo
Miyao has said that the odds of an extended world economic slowdown have
increased and that the monetary authority must remain ready to take
decisive action if necessary.
FTSE 100: BP leads fallers on DoJ news
Oil titan BP
was falling heavily this morning on press reports that the US
Department of Justice is intent on throwing the book at the company for
its part in the 2010 Deepwater Horizon disaster in the Gulf of Mexico,
as it seeks to have the maximum possible penalties imposed on the
British firm. Financial services provider and asset management group Hargreaves Lansdown was
in demand after saying total assets under administration rose 7% in the
year ended 30th June 2012 while profit jumped 21% despite continued
market volatility. Insurance group Prudential gained
after completing the acquisition of SRLC American Holdings Corp from
Swiss Re after receiving all necessary regulatory approvals. Telecoms group BT Group was benefitting from a broker upgrade from JPMorgan Cazenove, who lifted its rating from 'neutral' to 'overweight'. Several stocks were lower after going ex-dividend today, meaning that investors will not be able to access the firm's latest payout. These include: Aggreko, ARM Holdings, BHP Billiton, Diageo, Evraz, IMI, Kazakhmys, Resolution, Serco, Shire and Tullow Oil.
Sporting goods retailer Sports Direct
gained after saying total sales for the 13 weeks ending July 29th were
up 25.3% after sales were "boosted by the tremendous performance of Team
GB at the London Olympics."
House builder Berkeley Group gained after saying that this year's earnings are likely to be towards the top-end of brokers' forecasts.
Tons of FTSE 250 stocks went ex-div today, such as Amlin,
AZ Electronic Materials, Betfair, Cape, Carillion, Elementis, Greggs,
International Personal Finance, Jardine Lloyd Thompson, Michael Page,
National Express, New World Resources, Phoenix Group, Regus, SEGRO and
TUI Travel.
FTSE 100 - Risers
Wolseley (WOS) 2,608.00p +1.80%
Experian (EXPN) 1,003.00p +1.42%
Petrofac Ltd. (PFC) 1,539.00p +1.38%
Whitbread (WTB) 2,129.00p +1.38%
Burberry Group (BRBY) 1,330.00p +1.14%
BT Group (BT.A) 223.80p +1.13%
Babcock International Group (BAB) 938.00p +1.08%
InterContinental Hotels Group (IHG) 1,612.00p +1.00%
Carnival (CCL) 2,146.00p +0.89%
GlaxoSmithKline (GSK) 1,426.00p +0.88%
FTSE 100 - Fallers
Resolution Ltd. (RSL) 205.90p -3.79%
BP (BP.) 420.30p -3.73%
BHP Billiton (BLT) 1,766.50p -3.31%
Kazakhmys (KAZ) 582.00p -2.51%
Evraz (EVR) 212.70p -2.43%
Vedanta Resources (VED) 860.00p -1.83%
Imperial Tobacco Group (IMT) 2,407.00p -1.71%
Weir Group (WEIR) 1,554.00p -1.65%
Antofagasta (ANTO) 1,081.00p -1.46%
Diageo (DGE) 1,730.50p -1.34%
FTSE 250 - Risers
Britvic (BVIC) 353.00p +7.43%
Sports Direct International (SPD) 328.00p +4.46%
St. Modwen Properties (SMP) 200.00p +3.04%
Barr (A.G.) (BAG) 427.10p +2.77%
COLT Group SA (COLT) 120.20p +2.73%
Daejan Holdings (DJAN) 3,035.20p +2.37%
easyJet (EZJ) 541.50p +2.17%
Big Yellow Group (BYG) 310.00p +1.97%
Home Retail Group (HOME) 97.35p +1.94%
Taylor Wimpey (TW.) 53.15p +1.92%
FTSE 250 - Fallers
Bumi (BUMI) 268.30p -6.84%
Phoenix Group Holdings (DI) (PHNX) 487.00p -4.23%
Ferrexpo (FXPO) 145.00p -3.97%
Gem Diamonds Ltd. (DI) (GEMD) 152.80p -3.29%
John Laing Infrastructure Fund Ltd (JLIF) 108.30p -2.70%
Millennium & Copthorne Hotels (MLC) 475.60p -2.36%
SEGRO (SGRO) 225.40p -2.25%
British Assets Trust (BSET) 118.30p -2.23%
Cape (CIU) 232.70p -1.90%
Hansteen Holdings (HSTN) 75.25p -1.70%
| European broker round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Gamesa: Alphavalue downgrades to ADD from buy and raises price target to €1.90 from €1.80. Inditex: Barclays maintains NEUTRAL rating and raises price target to €80 from €75. Berstein raises price target to €100 from €94. Repsol: Jefferies & Co reiterates HOLD rating and lowers price target to €16 from €17. UBS: Exane upgrades to OVERWEIGHT. Vestas: DNB downgrades to SELL from buy. Volkswagen: Baader Bank maintains BUY rating with a price target of €165.
UK Event Calendar
INTERIMS
Advanced Medical Solutions Group, Concurrent Technologies
INTERIM DIVIDEND PAYMENT DATE
Fenner
INTERIM EX-DIVIDEND DATE
Aggreko, Amlin, Arbuthnot Banking Group, ARM Holdings, AZ Electronic
Materials SA (DI), Baronsmead VCT 3, Baronsmead VCT 4, Baronsmead VCT 5,
Bilfinger Berger Global Infrastructure Sicav S.A.(DI), Camellia, Cape,
Carillion, Churchill China, Cineworld Group, Communisis, Delcam,
Elementis, Evraz, FBD Holdings, Glanbia, Grafton Group Units, Greggs,
Holders Technology, IMI, International Personal Finance, Jardine Lloyd
Thompson Group, John Laing Infrastructure Fund Ltd, JPMorgan American
Inv Trust, Jupiter European Opportunities Trust, Kazakhmys, London
Capital Group Holdings, Maven Income & Growth 4 VCT, Maven Income
& Growth 4 VCT 'S' Shares, Michael Page International, National
Express Group, New World Resources A Shares, North Midland Construction,
Novae Group, Ocean Wilsons Holdings Ltd., Paddy Power, Phoenix Group
Holdings (DI), Portmeirion Group, Regus, Resolution Ltd., Robert
Walters, SEGRO, Serco Group, Shaft Sinkers Holdings, Shire Plc, TP70
VCT, TUI Travel, Tullow Oil, UK Select Trust Ltd.
QUARTERLY EX-DIVIDEND DATE
British Assets Trust, Duet Real Estate Finance Ltd, XP Power Ltd. (DI)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Auto Sales (US) (15:00)
MBA Mortgage Applications (US) (12:00)
PMI Composite (EU) (09:00)
PMI Composite (GER) (08:55)
PMI Services (EU) (09:00)
PMI Services (GER) (08:55)
Productivity (US) (13:30)
Retail Sales (EU) (10:00)
GMS
Black Mountain Resources Ltd
FINALS
A&J Mucklow Group, Hargreaves Lansdown
IMSS
Berkeley Group Holdings (The), Sports Direct International
SPECIAL EX-DIVIDEND PAYMENT DATE
Dunedin Enterprise Investment Trust
AGMS
Berkeley Group Holdings (The), Conexion Media Group, Daejan Holdings,
Endace Ltd, Gail (India) Ltd GDR (Reg S), Sports Direct International
UK ECONOMIC ANNOUNCEMENTS
BRC Shop Price Index (00:01)
Official Reserves (09:30)
PMI Services (09:30)
FINAL DIVIDEND PAYMENT DATE
Iomart Group, Vedanta Resources
FINAL EX-DIVIDEND DATE
ACM Shipping Group, Betfair Group, BHP Billiton, Diageo, Downing
Structured Opportunities VCT 1, Downing Structured Opportunities VCT 1
'B' Shares, Downing Structured Opportunities VCT 1 'D' Shares,
Immunodiagnostic Systems Holdings, Mattioli Woods, Mid Wynd
International Inv Trust, Swan (John) & Son
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| US Market Report |
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US close: Stocks mixed as data offsets Eurozone hopes
Market movers
Dow Jones: 13,036 (-0.42%)
Nasdaq: 3,075 (+0.25%)
S&P 500: 1,405 (-0.12%)
Following
a national holiday the day before, US stocks finished largely mixed on
Tuesday as disappointing manufacturing data was met with increased hopes
that European policy-makers will act this week.
European Central Bank
(ECB) President Mario Draghi is widely expected to unveil plans on
Thursday for buying sovereign debt in order to bring down bond yields in
peripheral nations.
However, the ISM's US manufacturing purchasing managers' index
(PMI) came in at 49.6 points in August, down from a reading of 49.8 in
July. Consensus expectations were for a 50.0 level, indicating neither
contraction or expansion.
Meanwhile, US construction spending fell 0.9% month-on-month in July, in line with consensus expectations.
Apple lifts Nasdaq on iPhone 5 hopes
While the Dow Jones and S&P 500 finished slightly in the red, a strong gain for tech giant Apple
helped the Nasdaq push into positive territory. The group sent out an
invitation to journalists today which sparked speculation that it is
close to launching its eagerly awaited iPhone 5.
Car-makers
were in focus today after the Autodata Corporation reported that
August's annualised light vehicle sales were at their highest levels
since 2009 at 14.5m, above consensus estimates of 14.2m. Ford finished slightly higher though General Motors was flat.
Online DVD rental group Netflix
dropped on competition concerns after the news that it would no longer
have exclusive rights to films made by movie studio joint venture EPIX
(made of Paramount Pictures, Metro-Goldwyn-Mayer and Lionsgate). Rival Amazon.com signed a deal with EPIX that would add thousands of title to its Prime Instant Video service.
Graphics processor Nvidia
was a heavy faller after Evercore Partners said that 2013 will be
"challenging" as it downgraded its rating on the stock from
'equalweight' to 'underweight'.
Investment banking giant Morgan Stanley gained after JPMorgan upgraded its view of the shares from 'hold' to 'overweight' and raised its target from $27 to $28.
Gamestop jumped after Goldman Sachs upgraded the video game retailer from 'neutral' to 'buy', lifting the target from $20 to $25.
S&P 500 - Risers
GameStop Corp. (GME) $20.41 +6.97%
TripAdvisor Inc. (TRIP) $34.65 +3.62%
Morgan Stanley (MS) $15.51 +3.40%
Gannett Co. Inc. (GCI) $15.69 +2.82%
D. R. Horton Inc. (DHI) $19.49 +2.63%
Apollo Group Inc. (APOL) $27.52 +2.50%
AutoNation Inc. (AN) $41.16 +2.39%
Tenet Healthcare Corp. (THC) $5.31 +2.31%
ConAgra Foods Inc. (CAG) $25.65 +2.15%
Watson Pharmaceuticals Inc. (WPI) $83.06 +2.10%
S&P 500 - Fallers
Alpha Natural Res (ANR) $5.53 -6.90%
Netflix Inc. (NFLX) $55.93 -6.35%
Cliffs Natural Resources Inc. (CLF) $33.68 -6.03%
Jabil Circuit Inc. (JBL) $21.46 -5.79%
Nvidia Corp. (NVDA) $13.27 -5.38%
First Solar Inc. (FSLR) $18.92 -5.35%
Avery Dennison Corp. (AVY) $29.60 -5.22%
CONSOL Energy Inc. (CNX) $28.83 -4.54%
United States Steel Corp. (X) $18.78 -3.44%
Peabody Energy Corp. (BTU) $20.90 -3.37%
Dow Jones I.A - Risers
Verizon Communications Inc. (VZ) $43.70 +1.77%
Wal-Mart Stores Inc. (WMT) $73.51 +1.25%
Kraft Foods Inc. (KFT) $41.83 +0.78%
Hewlett-Packard Co. (HPQ) $16.99 +0.65%
American Express Co. (AXP) $58.61 +0.53%
Merck & Co. Inc. (MRK) $43.25 +0.46%
AT&T Inc. (T) $36.81 +0.46%
Walt Disney Co. (DIS) $49.66 +0.38%
Procter & Gamble Co. (PG) $67.40 +0.31%
Bank of America Corp. (BAC) $8.00 +0.13%
Dow Jones I.A - Fallers
Caterpillar Inc. (CAT) $82.66 -3.13%
United Technologies Corp. (UTX) $78.35 -1.88%
E.I. du Pont de Nemours and Co. (DD) $48.83 -1.85%
Intel Corp. (INTC) $24.42 -1.67%
Alcoa Inc. (AA) $8.42 -1.64%
Microsoft Corp. (MSFT) $30.39 -1.41%
3M Co. (MMM) $91.68 -0.99%
General Electric Co. (GE) $20.51 -0.97%
Chevron Corp. (CVX) $111.22 -0.84%
Boeing Co. (BA) $70.87 -0.74%
Nasdaq 100 - Risers
Warner Chilcott Plc (WCRX) $14.09 +3.45%
Baidu Inc. (BIDU) $114.53 +2.77%
Apollo Group Inc. (APOL) $27.52 +2.50%
Vertex Pharmaceuticals Inc. (VRTX) $54.49 +2.18%
Liberty Interactive Corp (LINTA) $18.56 +1.73%
Yahoo! Inc. (YHOO) $14.89 +1.64%
KLA-Tencor Corp. (KLAC) $52.11 +1.56%
BMC Software Inc. (BMC) $42.01 +1.47%
Apple Inc. (AAPL) $674.97 +1.46%
Seagate Technology Plc (STX) $32.40 +1.22%
Nasdaq 100 - Fallers
Netflix Inc. (NFLX) $55.93 -6.35%
Nvidia Corp. (NVDA) $13.27 -5.38%
F5 Networks Inc. (FFIV) $94.47 -3.10%
Monster Beverage Corp (MNST) $57.25 -2.87%
Wynn Resorts Ltd. (WYNN) $100.71 -2.38%
Electronic Arts Inc. (EA) $13.03 -2.25%
Micron Technology Inc. (MU) $6.09 -1.93%
PACCAR Inc. (PCAR) $39.15 -1.90%
Avago Technologies Ltd. (AVGO) $35.91 -1.80%
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| Wednesday newspaper round-up |
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BoE, BP, Lloyds
The Bank of England
should keep its monetary powder dry tomorrow as global markets focus on
a potentially game-changing policy decision by the European Central
Bank, according to The Times’ Shadow Monetary Policy Committee. Sir
Steve Robson, the former second permanent secretary to the Treasury,
said that the Bank’s policymakers should refrain from cutting rates or
pumping more money into the economy and instead monitor events in
Frankfurt. The ECB’s policy meeting “has the potential to be either a
game-changer or a big disappointment”, he said. “The odds seem to be
moving in the direction of disappointment and the Bank’s firepower
should be kept in reserve in case it is.” Signs of more stubborn
inflation in the UK add to arguments for the Bank’s Monetary Policy
Committee to sit on its hands, Geoffrey Dicks, chief economist at Novus
Capital Markets, said. He warned: “Unless they deliver on inflation,
they won’t deliver on the real economy, either,” the newspaper reports.
The US Department of Justice intends to prove at trial that gross negligence or wilful misconduct by BP
caused the 2010 Deepwater Horizon disaster in the Gulf of Mexico,
government lawyers have said, in the clearest statement yet that they
are seeking the maximum possible penalties from the British oil group.
In a ferociously worded memo, filed with the New Orleans court that is
hearing the civil case over the spill, DoJ lawyers accused BP of a
“culture of corporate recklessness,” as revealed by email exchanges
among BP staff before the explosion on the rig. “The behaviour, words
and actions of these BP executives would not be tolerated in a middling
size company manufacturing dry goods for sale in a suburban mall,” the
government lawyers wrote, The Financial Times says.
Lloyds
is to put €2bn (£1.6bn) of Irish property loans on the market as it
continues to retreat from Ireland. The loans are a legacy of Lloyds'
2008 takeover of Halifax Bank of Scotland, which included a vast amount
of bad debts run up during the boom. The €2bn portfolio is likely to
sell for less than face value. A spokesman for Lloyds declined to
comment. The sale is the latest in a number of similar, though mostly
smaller, portfolios that have been put on the market by banks including
AIB and Bank of Ireland. Lloyds is 40 per cent owned by the taxpayer
after the 2008 rescue by the UK government, The Independent explains.
Airline bosses have welcomed the arrival of Patrick Mc.Loughlin as Transport Secretary as a signal that plans for Heathrow expansion
could finally be cleared for take-off. In David Cameron’s first Cabinet
reshuffle, Mr Mc. Loughlin replaced Justine Greening, MP for Putney,
who was staunchly opposed to plans for a third runway. Mr McLoughlin,
former chief whip who served in Margaret Thatcher’s transport ministry,
once admitted he was afraid of flying. He is the sixth Transport
Secretary in five years. A spokesman for IAG, the owner of British
Airways, said: “We welcome [Mr McLoughlin’s] appointment and hope it
signals that the Government is now serious about tackling urgently the
hub airport capacity issues facing the UK,” The Telegraph writes.
Surging demand from emerging markets will see orders for 28,000 new aircraft over the next 20 years, Airbus
predicted today. The Asia Pacific region will account for the biggest
tranche of the $3.9trn (£2.45trn) worth of new planes, according to the
European manufacturer’s projections. The company expects the overall
global passenger plane fleet to more than double from 15,500 to 32,550
by 2031. The freight fleet will grow at a slightly slower rate to about
3,000. Over the same period, passenger traffic should grow by about 4.7%
a year. Airbus’ order projections were more optimistic than last year,
with the company now expecting 1.3% more production than originally
predicted. The Asia Pacific region will account for 35% of new aircraft
deliveries, more than any other region. Europe and North America will
take 21% each, The Telegraph says.
Marks and Spencer
has reshuffled its general merchandise team, poaching Stephanie Chen,
director of womenswear at House of Fraser, and elevating M&S
director Scott Fyfe to head of menswear. M&S confirmed Ms Chen would
become a director, responsible for M&S’s homewares and
childrenswear, by March 2013. The changes are the first to be made by
John Dixon, previously head of food at M&S, who was appointed as
executive director of M&S’s general merchandise business in July,
succeeding Kate Bostock, The Financial Times reports.
Consumers could face more spikes in food prices
as extreme weather caused by climate change affects major crops
worldwide, according to a new Oxfam report. The charity claims that the
full impact of climate change on future food prices is being
underestimated and warns that consumers will become more vulnerable to
events like the current US drought as dependence on exports of wheat and
maize increases. The report, titled Extreme Weather, Extreme Prices,
says a US drought in 2030 could raise the price of maize by as much as
140% over and above the average price of food, which is already likely
to be double today’s prices. Drought and flooding in southern Africa
could increase the consumer price of maize and other coarse grains by as
much as 120% by 2030, the report says, according to The Scotsman.
Five years after forming a mobile phone books venture over a drink in a
Battersea Park pub, the bestselling author Andy McNab has made his
first million as an entrepreneur. The former SAS operative, who has
already made a small fortune writing of his derring-do in the first Gulf
War, agreed yesterday to sell Mobcast to Tesco for £4.5m as
Britain’s biggest grocer continues its expansion in the digital sector.
The acquisition marks Tesco’s latest foray into digital. In June it paid
£10.7m for a 91% stake in We7, a music-streaming business whose
founding members included the musician Peter Gabriel. Last year Tesco
bought an 80% stake in Blinkbox, a film-streaming business, The Times
reports.
Activity among the UK’s banks, hauliers, accountants and other services industries
that make up three-quarters of the UK economy, increased by more than
expected in August and produced the strongest performance in five
months. The closely-watched Purchasing Managers’ Index (PMI), on which a
reading above 50 implies expansion, rose from 51 in July to 53.7,
against forecasts of just 51.2. The surprising strength of services
countered declines in both manufacturing and construction in August,
delivering a welcome boost to confidence and reducing the prospect of an
interest-rate cut or more money-printing by the Bank of England
tomorrow . Vicky Redwood, at Capital Economics, said: “A weighted
average of the surveys is consistent with quarterly GDP growth of 0.1pc
or so, suggesting the economy may just about be clawing its way out of
recession,” The Telegraph says.
In an escalating game of brinkmanship, Spanish finance minister
Luis de Guindos said his country is not yet willing to sign a
Memorandum giving up fiscal sovereignty to EU inspectors. “First of all,
one must clarify the conditions,” he told German newspaper
Handelsblatt. Mr de Guindos said the crisis engulfing the region is
larger than any one country and warned north Europe not to scapegoat
Spain. “My colleagues are aware that the battle for the euro will be
fought in Spain. Spain is right now the breakwater for the Eurozone,” he
said, adding that “solidarity” would be well-advised. The warning comes
as German Chancellor Angela Merkel leaves for Madrid for talks with
premier Mariano Rajoy to thrash out the conditions of a full sovereign
rescue of up €300bn (£238bn), beyond the €100bn bank rescue already
agreed, according to The Telegraph.
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