Stocks flat ahead of EU summit
Market Movers
techMARK 2,109.15 +0.03%
FTSE 100 5,914.83 +0.07%
FTSE 250 12,036.79 -0.08%
London's FTSE 100 index opened broadly flat on Thursday morning as investors showed caution ahead of the EU summit in Brussels.
Markus Huber from ETX Capital said this morning: "EU leaders are
kicking off their two day summit in Brussels today, although
expectations in general are very low and nobody expects that any kind of
final deal will be struck neither what Spain nor a European banking
union is concerned, however markets seem to have priced in at least some
progress on both issues."
Last night saw the release of some solid economic figures from China,
giving mining stocks a lift in London early on. The data show a
moderate acceleration in activity and came alongside
better-than-expected prints for retail sales, industrial production and
fixed asset investments.
China’s gross domestic product (GDP)
grew at a 7.4% year-on-year rate in the third quarter of the year as
expected, down from the 7.6% in quarter two. While this was the slowest
rate of expansion in 12 years - except for that seen in the first
quarter of 2009 - economists reckons that they can see hopeful signs
which point to a stabilisation, such as a better tone to exports and a
progressive improvement in residential investment.
Financial
trader David White from Spreadex said: "European benchmarks will be
watched closely this morning to determine whether sentiment holds ahead
of significant news flows due out later today. The EU economic summit
joins UK retail sales, Spanish 10-year auction, US unemployment claims
and manufacturing data. Traders are potentially buyers of volatility
given the data-heavy session and will look to position in line with any
significant prevailing bias."
FTSE 100: Mining stocks celebrate Chinese data
Robust Chinese data saw mining stocks gain in early trading with Vedanta, Kazakhmys and EVRAZ leading the risers on the Footsie. ENRC, Anglo American, BHP Billiton, Rio Tinto and Antofagasta were also making decent gains.
EVRAZ,
the steel, mining and vanadium group, was in demand even though it saw
production decrease in the third quarter while prices were hit by tough
conditions in global steel markets.
Drinks giant SABMiller
was among the fallers this morning despite seeing good growth in lager
volumes shipped across most regions in the first half of its financial
year. Weighing on the shares was a ratings downgrade by Shore Capital to
'hold'.
Also hit by a broker downgrade this morning was Royal Dutch Shell
after Goldman Sachs lowered its recommendation for the oil titan to
'sell' and cut its target price for the shares from 2,840p to 2,260p.
FTSE 250: Booker, Go-Ahead and Jupiter impress with updates
There
was a flurry of interim management statement (IMSs) on the second-tier
index this morning, providing some movement in share prices early on.
Cash and carry chain Booker gained after saying that like-for-like sales rose 3.1% for the 24 weeks to September 14th.
Transport group Go-Ahead
said that trading in the first quarter has been strong as it announced a
new ambitious target for profit growth in its bus division. The company
said bus operating profit should be £100m by 2015/16, compared with the
£64-70m range over the past five years.
Fund manager Jupiter rose after saying that assets under management increased from £23.37bn to £25.0bn in the three months to the end of September.
Business published and events organiser UBM
was out of favour after missing forecasts in the third quarter. Revenue
in the first nine months of 2012 gained 4.0% to £734.6m; Investec had
expected £746m.
| AIM/Small Cap Report |
FTSE 100 - Risers
Evraz (EVR) 259.40p +2.69%
Kazakhmys (KAZ) 777.00p +2.24%
Vedanta Resources (VED) 1,166.00p +1.66%
Antofagasta (ANTO) 1,324.00p +1.46%
Smiths Group (SMIN) 1,082.00p +1.41%
Anglo American (AAL) 1,930.50p +1.31%
Eurasian Natural Resources Corp. (ENRC) 356.60p +1.25%
BHP Billiton (BLT) 2,038.50p +1.22%
Rio Tinto (RIO) 3,222.50p +1.21%
Tullow Oil (TLW) 1,485.00p +1.16%
FTSE 100 - Fallers
Capital Shopping Centres Group (CSCG) 332.20p -2.15%
Unilever (ULVR) 2,309.00p -1.58%
Royal Bank of Scotland Group (RBS) 282.60p -1.22%
Standard Chartered (STAN) 1,469.50p -1.18%
Diageo (DGE) 1,749.00p -1.10%
Smith & Nephew (SN.) 658.00p -1.05%
SSE (SSE) 1,443.00p -1.03%
Lloyds Banking Group (LLOY) 41.72p -1.01%
ITV (ITV) 91.55p -0.87%
Tate & Lyle (TATE) 701.00p -0.85%
FTSE 250 - Risers
Go-Ahead Group (GOG) 1,331.00p +3.18%
Jupiter Fund Management (JUP) 270.90p +2.69%
COLT Group SA (COLT) 121.50p +2.36%
Henderson Group (HGG) 121.50p +2.36%
Booker Group (BOK) 96.35p +2.12%
Talvivaara Mining Company (TALV) 142.60p +1.93%
Cookson Group (CKSN) 553.50p +1.75%
Michael Page International (MPI) 373.40p +1.74%
Premier Oil (PMO) 386.70p +1.71%
Fenner (FENR) 366.20p +1.55%
FTSE 250 - Fallers
UBM (UBM) 690.00p -4.50%
Jardine Lloyd Thompson Group (JLT) 739.00p -4.40%
Man Group (EMG) 88.50p -4.38%
Petra Diamonds Ltd.(DI) (PDL) 100.60p -3.36%
Diploma (DPLM) 436.20p -2.42%
Cranswick (CWK) 756.50p -2.26%
NMC Health (NMC) 181.10p -2.11%
PZ Cussons (PZC) 322.00p -1.68%
Telecom Plus (TEP) 867.50p -1.64%
Elementis (ELM) 226.30p -1.61%
|
| Europe Market Report |
 |
| FTSE 100 | Euronext | Dax perf | CAC 40 |
 |  |  |  |
|
Currency traders say "show me the money"
FTSE-100: 0.18%
Dax-30: 0.17%
Cac-40: 0.00%
FTSE-Mibtel 30: 0.05%
Ibex 35: 0.28%
Stoxx 600: 0.05%
European equities have begun the day slightly higher, similar to what was seen in Wall Street overnight
and despite better than expected data overnight out of China. That
ahead of today’s EU summit –where no major decisions are expected to be
taken.
Perhaps best expressing market sentiment, some traders
comment that they are somewhat loathe -but not pessimistic- to push
stocks much higher until clearer signs emerge of progress in handling
the Eurozone crisis. Not to be missed, the main equity benchmarks on
both sides of the Atlantic are fast approaching important –and likely
very hard to breach- levels of technical resistance.
Sentiment in the currency markets is quite similar, with analysts at Unicredit this morning commenting that: “Investors do not seem eager to ride an EUR-USD rally above 1.3169 peak, as there is no full solution in the current Spanish and Greek debate. A good result of today’s auctions in Spain could offer support.”
Also on tap, Spain’s Treasury will today auction up to €4.5bn in medium
and long-term debt. A positive result could help reassure the market.
However, at 09:00 the Bank of Spain will publish its latest monthly loan
delinquency data (July: €169.3bn), which could dampen any positive
effect from the above.
To be had in account, yesterday the
troika stated that it agreed with the Greek authorities on the core
measures of the austerity package and expects a full agreement in the
coming days. Financing issues will then be discussed between the
official lenders and Greece.
No more drinks for Remy Cointreau
Nestle is retreating after the company reported nine-month sales growth that missed analysts’ estimates.
Likewise, Remy Cointreau -France’s second-biggest distiller- posted an improvement in first-half sales that fell short of forecasts.
From a sector stand-point the best performance is now to be seen in the
following industrial groups: Basic resources (0.99%),
Construction&Materials (0.66%) and Industrial Goods and Services
(0.36%). Food&Beverage stocks are leading losses, down by 1.89%.
Weak Dutch data
Dutch
consumer confidence index worsened to -32 points in September, after
-29 in the month before (Consensus: -27). The Swiss trade balance
improved to €2.01bn in September, after €1.73bn in the previous month.
Single currency shy this morning
The euro/dollar
is now off by 0.22% to the 1.3087 dollar mark. Front month Brent crude
futures are declining by 0.283 dollars to the 112.90 dollar level on
the ICE.
UK Event Calendar
INTERIMS
Booker Group
INTERIM DIVIDEND PAYMENT DATE
888 Holdings, Netplay TV, RPS Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
Initial Jobless Claims (US) (13:30)
Leading Indicators (US) (15:00)
Philadelphia Fed Index (US) (15:00)
IMSS
Evraz, Ladbrokes, Man Group, Petropavlovsk, Renishaw
AGMS
IG Group Holdings, Mattioli Woods, Renishaw
TRADING ANNOUNCEMENTS
Britvic, Mothercare, SABMiller
UK ECONOMIC ANNOUNCEMENTS
Internet Retail Sales (09:30)
Retail Sales (09:30)
Trends in Lending (09:30)
FINAL DIVIDEND PAYMENT DATE
Standard Life UK Smaller Companies Trust, Trifast
|
| US Market Report |
Stocks Close Mostly Higher But Buying Interest Subdued
While
buying interest was relatively subdued, stocks moved mostly higher over
the course of the trading day on Wednesday. Upbeat housing data helped
to push the markets higher despite the release of some mixed earnings
news.
The major averages all ended the day in positive territory, although the Dow inched up only 5.22 points or less than a tenth of a percent to 13,557.00. The Nasdaq edged up 2.95 points or 0.1 percent to 3,104.12, while the S&P 500 rose 5.99 points or 0.4 percent to 1,460.91.
The
modest strength on Wall Street was largely due to a positive reaction
to a report from the Commerce Department showing a substantial increase
in housing starts in the month of September.
The report said
housing starts jumped 15 percent to an annual rate of 872,000 in
September from the revised August estimate of 758,000. Economists had
expected starts to climb to 765,000 from the 750,000 originally reported
for the previous month.
With the much stronger than expected
monthly growth, the annual rate of housing starts reached its highest
level since July of 2008.
Building permits, an indicator of
future housing demand, also surged up by 11.6 percent to an annual rate
of 894,000 in September from the revised August rate of 801,000. The
increase in building permits also exceeded expectations.
In a
research note, Capital Economics said, "The U.S. economy appears to be
developing a split personality. Households, seemingly oblivious to the
scheduled jump in marginal tax rates that will reduce their after-tax
income next year, are apparently growing in confidence and boosting
expenditure."
"At the same time, alarmed by the looming fiscal
cliff and the global slowdown, businesses appear to be slashing
investment," the firm added.
Meanwhile, a mixed batch of earnings news helped to limit the upside for the markets, with tech giants Intel (INTC) and IBM (IBM) under pressure after reporting their quarterly results.
While
Intel reported better than expected third quarter results, the
semiconductor giant warned of a difficult environment ahead. Shares of
Intel fell by 2.5 percent on the news.
IBM ended the day down by
4.9 percent after reporting third quarter earnings that came in just
above analyst estimates on revenues that fell by more than expected.
Bank of America
(BAC) posted a more modest loss after the financial giant reported
third quarter earnings that showed a notable decrease year-over-year but
exceeded analyst estimates for a loss. At the same time, the company
reported revenues that fell by more than expected.
Housing stocks
saw considerable strength on the heels of the housing starts data, with
the Philadelphia Housing Sector Index surging up by 2.9 percent. During
the session, the index reached its best intraday level in five years.
Hovnanian
(HOV) and KB Home (KBH) turned in two of the housing sector's best
performances, jumping by 9.3 percent and 8.7 percent, respectively.
Significant
strength also emerged among brokerage stocks, as reflected by the 2.5
percent gain posted by the NYSE Arca Broker/Dealer Index. Morgan Stanley (MS) posted a notable gain ahead of the release of its quarterly results on Thursday.
Biotechnology stocks
also showed a strong move to the upside, driving the NYSE Arca
Biotechnology Index up by 2.1 percent. InterMune (ITMN) helped to lead
the sector higher, surging up by 16.3 percent.
Steel, oil service, and banking stocks also saw notable strength on the day, while weakness was visible among electronic storage and software stocks.
Looking Ahead
Trading
on Thursday could be impacted by the release of some key economic data,
including reports on weekly jobless claims, leading economic
indicators, and Philadelphia-area manufacturing activity.
On the earnings front, American Express (AXP) and eBay (EBAY) are releasing their quarterly results after the close of today's trading, while Morgan Stanley, Travelers (TRV), and Verizon (VZ) are among the companies due to release their results before the start of trading on Thursday.
| Thursday newspaper round-up |
Eurozone, BP, Bumi
Friction
between France and Germany set the scene for a bumpy summit today in
which European Union leaders are to lay the groundwork for bolstering
the fragile Eurozone and open the way to a two-tier Europe with
Britain on the outside. President Hollande fired an undiplomatic
broadside at Germany, urging France’s traditional co-pillar of the EU to
show more solidarity with the weaker members, desist from red herrings
over political union and live up to pledges made at the last summit in
June. “We are all taking part in this solidarity, not just the Germans,”
the Socialist President told Le Monde and other newspapers. “Let’s stop
thinking that there is only one country that is going to pay for all
the others. That is false.” Chancellor Merkel should subordinate her
domestic concerns, he said. “Our common responsibility is to put
Europe’s interests first,” The Times writes.
Chinese growth
has slowed for a seventh consecutive quarter, leading to fears that the
world's second largest economy is nearing the end of an unsustainable
age of rapid expansion. China's GDP grew 7.4% in the third quarter of
the year according to data from The National Bureau of Statistics (NBS).
Last year the country saw growth of 9.2% and over the last three
decades the average has been nearer to 10%. The figure for the last
quarter was the weakest since the first three months of 2009, when the
global financial crisis weighed on China and led to relatively subdued
growth of 6.6%. The deepening crisis has been causing slowing growth in
China's economy every quarter since early last year. But government
officials said that there were signs that the country was stabilising,
The Telegraph says.
BP is on the verge of clinching an
historic deal with Rosneft that would see the Russian state-controlled
group take control of TNK-BP and hand the UK company a major stake in
what would be the world’s largest listed oil producer. Rosneft chief
executive Igor Sechin flew to London on Wednesday to discuss acquiring
BP’s 50% stake in Russian joint-venture TNK-BP and on Thursday morning
is expected to make a cash and shares offer worth up to $28bn (£17.3bn).
The development came after Rosneft on Tuesday night signed a
preliminary deal with AAR, the oligarchs who own the other half of
TNK-BP, to buy their 50% stake in the venture for $28bn. The oligarchs
had planned to table a bid for BP's stake but had been unable to raise
financing, according to The Telegraph.
The chairman of crisis-hit Bumi
faces questions over whether he was working on a controversial
“divorce” deal with the mining group’s Indonesian backers months before
it was announced. Emails seen by The Daily Telegraph appear to show that
as early as July, chairman Samin Tan was in talks with the Bakries, the
powerful Indonesian family, over a £750m proposal announced last week
to buy back Bumi’s coal assets. Financier Nat Rothschild, another major
investor in the FTSE 250’s Bumi, is fighting the deal, on Monday
announcing his surprise resignation from the board and accusing Mr Tan
of being “complicit” in the “oppression” of shareholders.
A leading Standard Chartered banker involved in making a $1bn (£620m) loan to the Indonesian chairman of the London-listed miner Bumi
has quit after the bank struggled to get other lenders on board. Samin
Tan used the funds to buy a stake in the coal-miner only to see the
investment plunge in value from $1bn to $230m as the board was rattled
by rifts between key shareholders, including the financier Nat
Rothschild and Indonesia's influential Bakrie group. More recently, Bumi
launched an investigation into alleged financial irregularities at its
Indonesian units. The loan is secured, reducing the British bank's risk,
but so far it has sold down just $230m of the loan, leaving $770m on
its books. Sources told Reuters Peter Kay, the global head of leveraged
finance syndication at Standard Chartered, was pushed out of the bank,
The Independent reports.
Retail chains shut an average
of 20 stores a day in the first six months of this year as the pace of
high street closures accelerated. A net total of 953 stores (openings
minus closures) closed in the first half of the year, compared with 174
in the whole of 2011, according to new figures from consultants PwC and
the Local Data Company, a retail information provider. This equated to
20 stores operated by the retail chains on average closing every day,
compared with 14 a day in 2011. “All retailers in distress have too many
locations,” said Mike Jervis, PwC insolvency partner and retail
specialist. “Relatively long leases, with inflexible terms, have been
entered into in a growth phase of the economy which is no longer
appropriate,” The Financial Times writes.
Energy
companies will be forced to place customers on the cheapest suitable
tariff in an attempt to curb soaring household bills, the Prime Minister
announced yesterday. In a move hailed as a “big moment” by one consumer
group, David Cameron said that the forthcoming Energy Bill would compel
companies by law to guarantee consumers the best deal. The move, which
surprised the Department of Energy and Climate Change, comes amid
growing concern in government at the impact on voters of rising gas and
electricity prices. It is the first new policy since Mr Cameron used his
Conservative conference speech to promise to deliver for “strivers” and
marks what will be a sharply-contested battle with Labour for the votes
of squeezed households, The Times says.
Bumi investors
could be forced to decide whether to sever ties with the Bakrie family
without knowing the full extent of the alleged financial irregularities
at their Indonesian subsidiaries, the City grandee trying to restore
order there has admitted.Sir Julian Horn-Smith, deputy chairman and
senior non-executive director, told The Times that Bumi may be unable to
publish the full details of its investigation for legal reasons. He
said that any Indonesian authority also carrying out investigations into
the companies could order Bumi to keep them secret so any potential
trial was not prejudiced. “I would personally like to see as much made
public as possible, ideally 100%. But our legal advice may say we are
not allowed to do so if an agency is already investigating .” He
insisted that the board of Bumi would recommend to shareholders whether
to accept the Bakrie divorce proposal after having examining the full
details of the investigation.
|
|
|
|
No comments:
Post a Comment