London open: Stocks rise despite contradictory reports on Spain
Market Movers
techMARK 2,101.51 +0.42%
FTSE 100 5,835.25 +0.51%
FTSE 250 11,921.27 +0.55%
- Portugal, Greece and Spain in the spotlight
- Markets await economic data from UK and Eurozone
- Rio Tinto and Anglo American gain
London's FTSE 100 index registered a strong start on Tuesday morning as
investors celebrated signs of progress in the Eurozone.
Markets finished with just slight gains on Monday despite some
better-than-expected US retail sales data and decent third-quarter
figures from banking giant Citigroup.
Market analyst Craig Erlam from Alpari said this morning: "This just shows that the Eurozone is still at the forefront of everyone's minds
this week. The EU summit on Thursday and Friday is all investors seem
to care about at the moment. It is not often that we see such positive
retail sales data and corporate earnings completely ignored."
Portugal
has been hit by protests after it revealed its 2013 budget yesterday
which includes tax rises and spending cuts and is likely to see the
country fall into its third year of recession.
Greek Prime Minister Antonis Samaras said in Athens last night that he is confidence that Greece will receive its next tranche of the bailout.
The Spanish government is preparing to make a request for aid, according to an article in the Financial Times last night, but is being held back by considerations relating to Germany and Italy. Bloomberg,
however, is reporting that Spain's Prime Minister believes that holding
out for longer will win the country better terms. A similar report
yesterday from Dow Jones Newswires -citing the Mexican President- may have weighed on Spanish bonds.
Meanwhile, Standard & Poor's
has cut its long-term credit ratings for 11 Spanish banks and
short-term ratings on four, as is often to be expected after having done
the same with the underlying sovereign previously.
Markets will be keeping an eye out for a short-term Spanish debt auction
scheduled for later this morning, the first issuance since Standard
& Poor's (S&P) downgraded the country's debt rating last week to
just one notch above 'junk status'.
Economic data from home and away is due out today.
In the UK, the Office for National Statistics releases September
inflation data at 09:30 (consensus estimate: 2.2% year-on-year, last:
2.5% year-on-year). The September producer price indices will also be
released at 09:30 (consensus estimate: 0.2% month-on-month, last: 2.0%
month-on-month). Inflation figures and economic sentiment surveys are
also due out in the Eurozone.
FTSE 100: Rio and Anglo provide a lift early on
Diversified mining group Rio Tinto
rose after hailing a strong set of production results in the third
quarter, with iron ore, copper, bauxite, alumina, and titanium dioxide
output up year-on-year.
Sector peer Anglo American
gained after saying that the illegal occupation of the Sishen Mine -
owned by its subsidiary Kumbia Iron Ore - has been brought to an end by
police. The company said it could get back to business as soon as
possible.
Airline group IAG was a heavy faller after Liberum Capital downgraded its recommendation for the shares to 'sell'.
Global engineering firm GKN
fell after warning that macroeconomic conditions have deteriorated in
recent weeks and it was seeing evidence of softening in order books.
Telecoms titan BT Group was in demand after Nomura reiterated its 'buy' rating on the stock, saying it prefers it to Vodafone on "structural growth drivers and dividend outlook".
FTSE 250: Bellway and N Brown surge after results
UK housebuilder Bellway
was 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.
Internet and catalogue home shopping firm N Brown
wasn't far behind after reporting that sale and profits ahead of
expectations in the first half, with like-for-like (LFL) sales growth
accelerating in the second quarter.
Mining group Bumi
fell after financier Nathaniel Rothschild resigned from the board,
saying he had lost confidence in the management's ability to stand up
for investors.
Gold miner Petropavlovsk rose after saying it was on track to achieve its full-year production target of at least 700,000oz.
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 41.20p +2.17%
Kazakhmys (KAZ) 703.50p +1.96%
Antofagasta (ANTO) 1,277.00p +1.59%
Evraz (EVR) 232.60p +1.48%
ARM Holdings (ARM) 586.00p +1.47%
Vedanta Resources (VED) 1,087.00p +1.40%
Aviva (AV.) 334.90p +1.33%
Randgold Resources Ltd. (RRS) 7,640.00p +1.33%
Petrofac Ltd. (PFC) 1,632.00p +1.30%
Royal Bank of Scotland Group (RBS) 271.50p +1.27%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 154.80p -2.03%
GKN (GKN) 208.60p -1.56%
Serco Group (SRP) 572.50p -0.69%
Pennon Group (PNN) 719.00p -0.35%
Hargreaves Lansdown (HL.) 723.00p -0.34%
Meggitt (MGGT) 401.80p -0.17%
IMI (IMI) 901.50p -0.17%
GlaxoSmithKline (GSK) 1,435.00p -0.14%
Whitbread (WTB) 2,368.00p -0.08%
Tesco (TSCO) 309.80p -0.06%
FTSE 250 - Risers
Brown (N.) Group (BWNG) 290.80p +7.82%
Bellway (BWY) 1,010.00p +6.32%
Petropavlovsk (POG) 445.40p +4.36%
Perform Group (PER) 416.50p +4.12%
Bodycote (BOY) 357.70p +3.65%
Imagination Technologies Group (IMG) 460.00p +3.60%
Paragon Group Of Companies (PAG) 230.10p +3.18%
Pace (PIC) 171.70p +2.94%
Millennium & Copthorne Hotels (MLC) 512.50p +2.71%
JD Sports Fashion (JD.) 770.00p +2.60%
FTSE 250 - Fallers
Ophir Energy (OPHR) 585.50p -2.34%
F&C Asset Management (FCAM) 95.15p -1.86%
Daejan Holdings (DJAN) 2,777.42p -1.68%
Go-Ahead Group (GOG) 1,278.00p -0.93%
Informa (INF) 397.10p -0.77%
Regus (RGU) 104.20p -0.76%
Euromoney Institutional Investor (ERM) 769.50p -0.71%
Aveva Group (AVV) 2,023.00p -0.69%
Dignity (DTY) 930.00p -0.64%
UK Event Calendar
Tuesday October 16
INTERIMS
Brown (N.) Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Capacity Utilisation (US) (16:15)
Consumer Price Index (EU) (10:00)
Consumer Price Index (US) (13:30)
Harmonised Index of Consumer Prices (EU) (10:00)
Industrial Production (US) (16:15)
New Car Registrations (EU) (10:00)
ZEW Survey (EU) (10:00)
ZEW Survey (GER) (10:00)
Q3
GKN
GMS
Blavod Wines & Spirits, Energetix Group
FINALS
Bellway, EpiStem Holdings, Plexus Holdings, Smiths News, Spirit Pub Company
IMSS
GKN
EGMS
Global Ports Investments GDR (REG S)
AGMS
In-Deed Online
UK ECONOMIC ANNOUNCEMENTS
Consumer Price Index (09:30)
Producer Price Index (09:30)
Retail Price Index (09:30)
| US Market Report |
US close: Retail sales lift for equities
Market movers
Dow Jones Industrial: +95 at 13,424
S&P 500: +12 at 1,440
NASDAQ Composite: +20 at 3,064
Despite warnings from the likes of the Bank of Israel's governor,
Stanley Fisher, regarding the downside risks to global growth forecasts,
US stocks made a strong start to the week, boosted by better than
expected retail sales and consensus beating results from Citigroup.
Meanwhile, in a speech at the annual meeting of the National
Association for Business Economics (NABE), New York Federal Reserve
(Fed) president William Dudley reassured his audience that the central
bank will only begin to unwind its lax monetary policy once the US
recovery is well-anchored.
Dudley was optmistic about the US
recovery in 2013 in spite of the market's continuous concerns over the
European sovereign debt crisis and the US "fiscal cliff" - the $600bn of
tax increases and spending cuts that will come into force in 2013
unless Congress reaches an agreement on the nation's budget deficit.
Dudley insisted that the Fed would have to be sure that the recovery is
on solid footing before it changes its monetary policy. "If we were to
see some good news on growth I would not expect us to respond in a hasty
manner," he said in New York.
On the other hand, it appears
as if more could have been done. "With the benefit of hindsight,
monetary policy needed to be still more aggressive," Dudley said. "A
more front-loaded programme would avoid greater attenuation compared to a
policy that started out less aggressive but added stimulus gradually
over time."
The NY Fed president denied there was any conflict
between the Fed's dual mandate of full employment and price stability
because inflation will remain below 2% and the Fed can keep price
increases under control by paying interest on excess reserves.
"Only as we became confident that the recovery was securely established
would I expect our monetary policy stance to evolve to ensure that it
remained appropriate to achievement of our objective: maximum
sustainable employment in the context of price stability," he said. Citigroup gets fixed income boost
Banking colossus Citigroup
saw revenue from trading fixed income securities surge by just under
two-thirds year-on-year in the third quarter, putting a positive sheen
on the company's results.
The bank reported earnings per share
(EPS) of $1.06, excluding extraordinary items, compared to the 97 cents
expected by the market. Revenue came in at $19.4bn.
Including
extraordinary items, earnings fell 88% to 15 cents per share compared
to $1.23 last year. The one-time items include a tax benefit, a
write-down for the disposal of its stake in Smith Barney, and accounting
adjustments.
"Our core businesses showed momentum during the
quarter as we increased lending and generated higher operating
revenues," said Chief Executive Office Vikram Pandit.
American phone company Sprint Nextel
finished lower after Softbank confirmed that it will acquire a 70%
share in the company for $20.1bn. The deal will be the largest
acquisition ever made by a Japanese company.
According to a
statement by Softbank, the operation will take place with a direct
purchase of $8bn of Sprint's treasury stock, while the remaining $12.1bn
will be acquired via market transactions.
Softbank says both boards of directors have approved the deal and that they expect the transaction to close in mid-2013.
The deal has put the kibosh on any hopes of Sprint Nextel buying MetroPCS.
Chip-maker panned
Advanced Micro Devices,
a distant second to Intel in the US computer chip manufacturing market,
is rumoured to be slashing around one-fifth of its workforce.
In contrast, Texas Instruments was wanted on reports that online retail giant Amazon may buy its mobile devices chip unit. The theory goes that Amazon,
which produces the popular Kindle ebook reader device, is looking to
move into the smartphone market and deeper into the tablet market.
Blackrock and CarMax rose on the back of positive comments on the companies' share prices in the latest edition of Barron's. Toy maker Hasbro, however, eased after Goldman Sachs downgraded the stock to "sell" from "neutral".
Shares of Eli Lilly
advanced after the drugs maker released positive results for a
late-stage study of a gastric cancer drug. The company also benefitted
today from positive broker comments.
Retail sales data boosts GDP tracking estimates
US
retail sales, excluding automobiles, rose 1.1% in September,
comfortably beating the consensus expectation of a 0.6% rise. The
previous month's reading has been revised down to a rise of 0.8% from a
preliminary estimate of 1.0%.
The above data (and revisions)
pushed Barclays Research's tracking estimate for growth in third quarter
gross domestic product higher, by 0.2 percentage points, to 2%.
In other economic news, the Empire State Manufacturing Index for
October remained in negative territory for the third month in a row, at
-6.2, though this was an improvement from September's reading of -10.2.
The sub-index for new orders increased to -8.9 from -14.
Business inventories climbed by 0.6% month-on-month in August (Consensus: 0.5%).
Bonds and crude futures fall
10-year US Treasuries were down by 1/16 dollars, with yields at the 1.66% mark.
Front month West Texas crude futures were barely changed, down 7 cents at $91.79 a barrel on the NYMEX.
S&P 500 - Risers
Alpha Natural Res (ANR) $8.48 +7.61%
Citigroup Inc. (C) $36.66 +5.50%
PulteGroup Inc. (PHM) $16.40 +5.06%
Cablevision Systems Corp. (CVC) $17.73 +4.85%
American Tower Corp (Reit) (AMT) $75.35 +4.41%
Eli Lilly and Company (LLY) $52.53 +4.12%
Abbott Laboratories (ABT) $72.05 +4.00%
Weyerhaeuser Co. (WY) $27.30 +3.96%
Crown Castle International (CCI) $67.05 +3.71%
Intuitive Surgical Inc. (ISRG) $512.53 +3.63%
S&P 500 - Fallers
Metropcs Communications Inc. (PCS) $11.33 -4.63%
Harris Corp. (HRS) $46.86 -4.05%
Hasbro Inc (HAS) $37.75 -3.94%
Apollo Group Inc. (APOL) $27.66 -3.42%
BMC Software Inc. (BMC) $41.49 -2.49%
CONSOL Energy Inc. (CNX) $34.36 -2.22%
Bed Bath & Beyond Inc. (BBBY) $60.32 -1.84%
Mattel Inc. (MAT) $35.42 -1.64%
QEP Resources Inc (QEP) $31.52 -1.50%
Range Resources Corp. (RRC) $70.68 -1.46%
Dow Jones I.A - Risers
Bank of America Corp. (BAC) $9.44 +3.51%
Merck & Co. Inc. (MRK) $46.59 +2.13%
Home Depot Inc. (HD) $60.65 +1.83%
JP Morgan Chase & Co. (JPM) $42.38 +1.83%
Pfizer Inc. (PFE) $25.57 +1.79%
Wal-Mart Stores Inc. (WMT) $77.15 +1.77%
Travelers Company Inc. (TRV) $69.79 +1.56%
Alcoa Inc. (AA) $8.80 +1.27%
Intel Corp. (INTC) $21.73 +1.16%
Procter & Gamble Co. (PG) $68.71 +1.13%
Dow Jones I.A - Fallers
AT&T Inc. (T) $35.21 -1.18%
American Express Co. (AXP) $57.59 -0.52%
Nasdaq 100 - Risers
Virgin Media Inc. (VMED) $31.87 +3.78%
Intuitive Surgical Inc. (ISRG) $512.53 +3.63%
Texas Instruments Inc (TXN) $28.22 +3.45%
Sandisk Corp. (SNDK) $43.73 +3.43%
Fossil Inc. (FOSL) $85.09 +2.85%
Amgen Inc. (AMGN) $86.22 +2.64%
Baidu Inc. (BIDU) $113.82 +2.34%
Autodesk Inc. (ADSK) $31.90 +2.24%
Monster Beverage Corp (MNST) $58.31 +2.15%
Wynn Resorts Ltd. (WYNN) $116.25 +2.14%
Nasdaq 100 - Fallers
Apollo Group Inc. (APOL) $27.66 -3.42%
BMC Software Inc. (BMC) $41.49 -2.49%
Bed Bath & Beyond Inc. (BBBY) $60.32 -1.84%
Mattel Inc. (MAT) $35.42 -1.64%
Dollar Tree Stores Inc. (DLTR) $40.52 -1.43%
Yahoo! Inc. (YHOO) $15.66 -1.39%
Citrix Systems Inc. (CTXS) $66.79 -1.34%
Costco Wholesale Corp. (COST) $96.51 -1.07% |
| FX and Commodities round-up |
FX round-up: Dollar retains slim gains
The
dollar made mild progress against major currencies on Monday as
investors cheered a stronger than expected US retail sales report.
The ICE dollar index, which measures the US unit against a basket of
six major currencies, climbed to 79.712 from 79.678 on Friday.
The latest report from the US Commerce Department said retail and
restaurant sales rose 1.1% in September from the previous month, rising
for the third consecutive month.
Dollar gains were limited
however following a weaker than expected October report on manufacturers
in the New York region. This month's reading was the weakest since
2010.
The euro recovered from earlier weakness to trade at
$1.2952, barely changed from $1.2956 on Friday, as focus turns to this
week's two-day European Union summit in Brussels, which kicks off on
Thursday. EU leaders are expected to discuss reforms to the Eurozone
budget.
Markets are also hopeful the meeting will bring some
clarity on when a possible Spanish bailout will happen and how Greece's
debt crisis can be resolved.
Sterling fell to a one-month low
against the dollar on Monday on concern about the persistently weak UK
economic outlook and the possibility of further monetary easing from the
Bank of England. Sterling fell to $1.6048 from $1.6078.
Against the yen, the greenback fetched ¥78.72 from ¥78.41 the previous
session while the Australian dollar bought $1.0258 versus $1.0233 on
Friday.
Commodities: Oil barely changed
Crude
oil futures settled almost flat on Monday, after spending most of the
day in the red, as traders fretted about weak oil demand.
The
spotlight initially turned to slowing global oil demand after the
International Energy Agency cut its 2012 outlook for oil demand growth
last week. The IEA also said it sees increased production from oil rich
nations such as Iraq, Libya and the US.
Oil cartel OPEC also
doused market fears about surplus supplies after it said it anticipates
the oil markets to stay well supplied into next year.
Crude
for November delivery fell 1 cent to settle at $91.85 a barrel on the
New York Mercantile Exchange after a brief fall below $90 earlier in the
session.
Oil prices managed to climb back above $90 as concern about escalating tensions in the Middle East brought buyers back in.
Meanwhile the European benchmark Brent crude finished up $1.18 at $115.80 a barrel on the ICE futures exchange.
Among precious metals gold nursed a 1.3% loss on Monday and hit an
intra-day low of $1,729.70 as the dollar strengthened and US stock
markets rallied.
Gold for December delivery declined $22.10 to settle at $1,737.60 an ounce, extending the previous session's decline.
Silver for December lost 93 cents at $32.74 an ounce while palladium
for December delivery dropped $6.45 at $632.60 an ounce. January
platinum tumbled $27 to $1,632.30 an ounce.
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