London close: US earnings spark surge in UK stocks
Market Movers
- techMARK 2,113.19 +0.97%
- FTSE 100 5,870.54 +1.12%
- FTSE 250 11,985.30 +1.09%
- US earnings lift sentiment
- Spain nearing a bailout request
- German ZEW index beats forecasts
Better-than-expected earnings from Goldman and Johnson & Johnson
and signs of progress in the Eurozone saw the FTSE 100 surge 1.2 per
cent on Tuesday afternoon.
"Global markets roared with optimism
today as investors adopted a risk-on attitude thanks to strong US
corporate results," said financial trade Shavaz Dhalla from Spreadex.
According to Thomson Reuters Starmine data, over two-thirds of US
companies that have reported earnings so far have either met or beaten
expectations.
Dhalla said: "Thus, in the context of tightening
regulations, banking scandals and countries nearing the end of their
financial tether, investors can at least take comfort in the fact that
many US companies are still managing to ride the current slowdown in
global growth surprisingly well."
Bonds in Spain
advanced today after the Treasury saw solid demand at a short-term bond
auction this morning admits expectations that the country is ready to
request a bailout. The Treasury raised €4.86bn, topping the high-end of
its €3.5-4.5bn target. Demand totalled €13.654bn overall, while yields
edged lower.
The German ZEW survey which measures
economic sentiment improved to -11.5 in October, from -18.2 the month
before and better than the -14.9 estimate.
UK CPI inflation
fell from 2.5% to 2.2% in September, in line with market expectations,
taking the rate to its lowest level since November 2009 and close to the
2% target set by the Bank of England. Bank of America Merrill Lynch
strategist John Wraith told Reuters: "Inflation numbers were in line
with expectations, which on one level doesn't mean very much but on
another level probably hardened more expectations of more QE being
announced in November."
FTSE 100: Financials & miners jump on increased risk appetite
Financial
and resource stocks were performing well on Tuesday afternoon as
investors adopted a 'risk-on' attitude on the back of improved newsflow
from the Eurozone and better-than-expected corporate results in the US. Lloyds, Admiral, Royal Bank of Scotland and Barclays were leading financials higher, while mining peers Evraz, Polymetal and Kazakhmys were also in demand.
Diversified mining group Rio Tinto rose after hailing a strong set of production results in the third quarter, while Anglo American gained after saying that the illegal occupation of its Sishen Mine has been brought to an end by police.
Heading the other way was global engineering firm GKN
after warning that macroeconomic conditions have deteriorated in recent
weeks and it was seeing evidence of softening in order books. Investec
this morning cut its price target on the stock and retained a 'hold'
rating.
Telecoms titan BT Group was higher after Nomura reiterated its 'buy' rating on the stock, saying it prefers it to Vodafone on "structural growth drivers and dividend outlook". Meanwhile, airline group IAG was a heavy faller after Liberum Capital downgraded its recommendation for the shares to 'sell'.
FTSE 250: N Brown jumps after first-half beat
Internet and catalogue home shopping firm N Brown
topped the risers list on Tuesday afternoon, gaining 12% after beating
forecasts in the first half. The company reported that revenue in the 26
weeks to September 1st came in at £379.3m, up 4.3% on the year and
ahead of the consensus estimate of £371.7m.
Chip group Imagination Technologies was also a high riser after both Liberum Capital and Numis upgraded their ratings on the stock.
Oil group Ophir Energy
was the worst performer of the day after Deutsche Bank downgraded the
stock to 'sell' and cut its price target from 565p to 505p.
High Street betting firm William Hill gained after agreeing on a revised and increased possible offer with GVC for Sportingbet.
Thermal processing services provider Bodycote
was in demand after buying US-based Carolina Commercial Heat Treating
from Bluewater Thermal Solutions for $68m. The company also said it was
trading line with expectations in the most recent quarter.
UK housebuilder Bellway
was also a high riser after delivering a solid increase in full-year
pre-tax profit, helped by a strong performance in London, and said
reservations since July 31st have remained in line with expectations.
FTSE 100 - Risers
Evraz (EVR) 243.70p +6.33%
Lloyds Banking Group (LLOY) 42.76p +6.05%
Admiral Group (ADM) 1,175.00p +5.00%
Royal Bank of Scotland Group (RBS) 280.00p +4.44%
Barclays (BARC) 246.10p +3.91%
Shire Plc (SHP) 1,856.00p +3.46%
ARM Holdings (ARM) 596.00p +3.20%
Polymetal International (POLY) 1,160.00p +3.02%
Weir Group (WEIR) 1,771.00p +2.97%
Rio Tinto (RIO) 3,061.00p +2.94%
FTSE 100 - Fallers
GKN (GKN) 204.80p -3.35%
International Consolidated Airlines Group SA (CDI) (IAG) 155.60p -1.52%
Capita (CPI) 733.00p -0.81%
InterContinental Hotels Group (IHG) 1,593.00p -0.69%
Tesco (TSCO) 307.90p -0.68%
Pennon Group (PNN) 717.00p -0.62%
Sainsbury (J) (SBRY) 356.40p -0.39%
WPP (WPP) 854.50p -0.18%
Vodafone Group (VOD) 173.00p -0.17%
Meggitt (MGGT) 402.00p -0.12%
FTSE 250 - Risers
Brown (N.) Group (BWNG) 306.90p +13.79%
Imagination Technologies Group (IMG) 478.90p +7.86%
Perform Group (PER) 430.00p +7.50%
Kenmare Resources (KMR) 40.10p +6.56%
Paragon Group Of Companies (PAG) 237.10p +6.32%
Persimmon (PSN) 786.00p +5.29%
William Hill (WMH) 342.00p +4.91%
Berkeley Group Holdings (The) (BKG) 1,491.00p +4.41%
Bodycote (BOY) 359.40p +4.14%
Cranswick (CWK) 765.50p +3.45%
FTSE 250 - Fallers
Ophir Energy (OPHR) 579.50p -3.34%
Diploma (DPLM) 447.30p -1.65%
ITE Group (ITE) 198.90p -1.63%
Stobart Group Ltd. (STOB) 116.80p -1.52%
Talvivaara Mining Company (TALV) 133.80p -1.18%
Invensys (ISYS) 224.00p -1.02%
Greggs (GRG) 486.10p -0.96%
Carpetright (CPR) 693.00p -0.93%
Dignity (DTY) 927.50p -0.91%
TalkTalk Telecom Group (TALK) 178.40p -0.89%
| Europe Market Report |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Europe midday: Germany may be open to a precautionary credit line for Spain
-Germany may be open to granting Spain a precautionary credit line -Reports
-Contradictory reports on whether Spain will ask for a bail-out
-Some Euro zone banks regaining access to unsecured funding-Barclays
-Spanish 10 year bond yields down 5bp to 5.77 per cent
FTSE-100: 0.99%
Dax-30: 1.29%
Cac-40: 1.02%
FTSE-Mibtel 30: 1.24%
Ibex 35: 2.34%
Stoxx 600: 0.83%
The major European equity benchmarks are now registering large gains.
That following reports that Germany may be open to granting Spain a
precautionary credit line.
Also adding to the favourable sentiment, The Financial Times
wrote this morning that Spain may be close to asking for a bail-out.
However, it added that it is being delayed by considerations put forth
by Germany and by worries over what the repercussions of that could be
for Italy.
Bloomberg is also casting a spotlight on
Spain today. However, it was earlier reporting that Spain's PM believes
that holding out for longer will win the country better terms, similar
to what other reports seem to be pointing to yesterday.
Meantime, S&P
has further cuts its long term credit ratings on 11 Spanish banks and
short - term rates on four. This is normal as financial institutions'
credit ratings are usually linked to the sovereign's by means of the
so-called zero coupon curve.
The Spanish Treasury has sold
4.86bn euros in 12 and 18 month bills this morning, more than the 4.5bn
which had been expected and at lower rates than the last time around.
Car sales off
Luxury group LVMH has today unveiled a further slowdown in comparable sales growth in the third quarter, to 6%.
Roche Holdings gained 0.5% after reporting third- quarter sales that exceeded analyst estimates.
Registrations plummeted 11% to 1.13m vehicles last month from 1.27m a
year earlier, according to data out from the Brussels-based European Automobile Manufacturers' Association (ACEA). It was the 12th consecutive monthly drop and the biggest decline since October 2010.
As an aside, The Telegraph was reporting this morning that French
business leaders are in a state of near panic over the seriousness of
the current financial crisis.
From a sector stand-point the
best performance is now to be seen in shares of the following industrial
groups: Banks (2.05%), Technology (1.93%) and Insurance (1.69%).
Better than forecast economic numbers
Eurozone consumer prices for the month of September have come in at a 2.6% year-on-year rate of change (Consensus: 2.7%).
The German ZEW Institute's investor sentiment index for the month of
September increased to -11.5 points, after -18.2 points in the month
before (Consensus: -14.9). Slight gains in other asset classes
The euro/dollar is now up by 0.84% to the 1.3056 dollar mark.
Front month Brent crude futures are falling by 0.294 dollars to the 115.46 dollar mark on the ICE. |
| US Market Report |
US mid-morning: Stocks at day's best levels
-Citi board ousts Pandit over poor execution-Bbg
-Two German lawmakers support precautionary credit line for Spain
Dow Jones Industrial: 0.87%
Nasdaq Comp.: 0.97%
S&P 500: 0.89%
The main US equity benchmarks are trading comfortably higher,
apparently benefitting from reports and hopes that Spanish authorities
may be making progress towards asking for a full rescue programme from
their European partners.
Also helping stocks, undoubtedly, is
the release of several better than expected quarterly earnings reports
today from the likes of Johnson&Johnson, United Health, and Goldman Sachs as well as generally better than expected macroeconomic data.
As regards Goldman Sachs,
the Wall Street giant has announced third-quarter net income of
$1.51bn, or $2.85 per share (Consensus: $2.28), compared with a loss of
$393m, or 84 cents, versus a year earlier.
Results from Coca Cola and State Street, on the other hand, came in 'mixed.'
HCA and Murphy Oil have both announced special dividend payments today. The latter has also unveiled a $1bn share buy-back programme.
Not to be lost sight of, IBM and Intel will publish their latest quarterly results after tonight's close.
Citigroup
has turned around and is now moving higher despite the surprise
resignation of its Chief Executive, Vikram Pandit. Worth pointing out in
this regard, Bloomberg is now reporting that he was in fact ousted over
his performance.
Slightly better than expected data-points
US core consumer prices rose at a 2.0% year-on-year clip in September, as expected.
Meantime, US industrial production rose by 0.4% month-on-month in
September (Consensus: 0.2%). Compensating the above, in part, previous
months' data for manufacturing sector output was revised down.
Long-term capital inflows increased to $90b in August (Consensus: $45.3bn), after $67.2bn.
The NAHB home-builder sentiment index gained 1 point, to 41 points, in September, its highest level since June 2006.
Front month West Texas crude futures are now up by 0.02% to the 91.86 dollar mark on the NYMEX.
10 year US Treasuries are also moving lower, by 14/32 dollars, with yields at 1.71%.
S&P 500 - Risers
First Solar Inc. (FSLR) $24.05 +8.09%
Fossil Inc. (FOSL) $91.94 +8.05%
Murphy Oil Corp. (MUR) $63.65 +7.89%
Cliffs Natural Resources Inc. (CLF) $43.81 +6.50%
Kroger Co. (KR) $24.55 +4.78%
State Street Corp. (STT) $43.46 +4.52%
Juniper Networks Inc. (JNPR) $17.51 +4.29%
Gannett Co. Inc. (GCI) $18.57 +4.03%
MetLife Inc. (MET) $36.35 +4.01%
Williams Companies Inc. (WMB) $37.25 +3.91%
S&P 500 - Fallers
W.W. Grainger Inc. (GWW) $203.22 -5.86%
PNC Financial Services Group (PNC) $60.67 -3.60%
Omnicom Group Inc. (OMC) $50.95 -2.88%
Advanced Micro Devices Inc. (AMD) $2.67 -2.73%
Forest Laboratories Inc. (FRX) $35.74 -2.35%
Republic Services Inc. (RSG) $27.68 -1.25%
Alpha Natural Res (ANR) $8.38 -1.17%
Cablevision Systems Corp. (CVC) $17.52 -1.16%
Quest Diagnostics (DGX) $63.23 -1.13%
Avon Products Inc. (AVP) $17.08 -1.10%
Dow Jones I.A - Risers
Intel Corp. (INTC) $22.23 +2.28%
Caterpillar Inc. (CAT) $84.53 +2.08%
United Technologies Corp. (UTX) $77.50 +1.77%
Boeing Co. (BA) $73.44 +1.65%
Travelers Company Inc. (TRV) $70.92 +1.62%
Alcoa Inc. (AA) $8.94 +1.56%
3M Co. (MMM) $94.16 +1.48%
Cisco Systems Inc. (CSCO) $18.82 +1.46%
American Express Co. (AXP) $58.37 +1.35%
Johnson & Johnson (JNJ) $69.50 +1.31%
Dow Jones I.A - Fallers
Mondelez International Inc. (MDLZ) $27.03 -0.70%
Coca-Cola Co. (KO) $37.91 -0.57%
Wal-Mart Stores Inc. (WMT) $76.79 -0.47%
Nasdaq 100 - Risers
Fossil Inc. (FOSL) $91.94 +8.05%
Mattel Inc. (MAT) $36.70 +3.61%
Avago Technologies Ltd. (AVGO) $34.38 +3.57%
Sears Holdings Corp. (SHLD) $62.15 +3.04%
Autodesk Inc. (ADSK) $32.84 +2.95%
Nvidia Corp. (NVDA) $13.14 +2.74%
Liberty Interactive Corp (LINTA) $20.27 +2.71%
Adobe Systems Inc. (ADBE) $33.18 +2.63%
Broadcom Corp. (BRCM) $33.94 +2.48%
Sandisk Corp. (SNDK) $44.74 +2.31%
Nasdaq 100 - Fallers
Fastenal Co. (FAST) $45.10 -0.99%
Infosys Technologies Ltd. (INFY) $44.22 -0.79%
Activision Blizzard Inc. (ATVI) $11.23 -0.71%
Mondelez International Inc. (MDLZ) $27.03 -0.70%
Warner Chilcott Plc (WCRX) $12.89 -0.46%
Vodafone Group Plc ADS (VOD) $27.90 -0.43%
Micron Technology Inc. (MU) $5.70 -0.35%
Garmin Ltd. (GRMN) $39.97 -0.35%
Expedia Inc. (EXPE) $54.32 -0.31%
O'Reilly Automotive Inc. (ORLY) $82.38 -0.16% |
| Broker Tips |
Broker tips: Hargreaves Lansdown, BT, GKN
Credit Suisse analysts have downgraded Hargreaves Lansdown to 'underperform' from 'neutral' but have raised their price target for the stock from 480p to 655p.
The Swiss bank believes that the shares, trading at an all-time high
(up 70% year-to-date), and on a calendar year price earnings ratio of 23
are up with events.
Moreover, the regulatory uncertainty from
the retail distribution review has the potential to disrupt the current
pricing model, consume management time and raise operational costs.
Nomura kept its 'buy' rating for telecoms giant BT Group
on Tuesday saying that, while first-half results are likely to be hit
by the economic downturn, it still prefers the business over sector peer
Vodafone (rated 'neutral').
The broker said: "BT has
not re-rated against VOD on price-to-earnings grounds in the last two
years despite superior EBITDA growth and guidance that implies more of
the same.
"Unless VOD can secure an increased US dividend, we
expect investors to focus on consolidated operations in the near term,
and we support a tighter valuation discount for BT."
Investec has trimmed its target for engineering group GKN
after its Driveline division suffered from a worse-than-expected
weakening in automotive demand and associated operational issues.
Investec has maintained its 'hold' rating for GKN and reduced its target from 240p to 224p.
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