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Footsie registers best weekly performance this year
Market Movers
techMARK 2,075.07 +0.42%
FTSE 100 5,819.14 +0.49%
FTSE 250 11,888.93 +0.23%
After
a subdued start, UK stocks rallied in afternoon trade on Friday with
decent economic figures from Germany and France lifting the mood.
The positive finish helped the FTSE 100 index post its best weekly performance this year, up 3.8% in the last five days.
Meanwhile, market strategist Ishaq Siddiqi from ETX Capital said this
afternoon: “A firm session on Wall Street with stock markets playing
catch-up after yesterday’s closure for Thanksgiving sees the return of volumes in the market place, albeit still relatively light.”
The IFO Institute’s widely-followed gauge of German business confidence
rose in November to the 101.4 point level, from 100 in the previous
month, surprising the consensus of analyst who had expected a decline.
That was only the first improvement after six successive months of
decline.
There was also some upbeat data from France
after the statistics institute INSEE’s French business confidence index
for the month of November came in at a better-than-expected 87 points,
versus 85 in October.
The two-day summit of European Union
leaders to discuss a new seven-year budget ended today with the same
result as yesterday: no agreement. Speaking to reporters after the first
day of meeting, German Chancellor Angela Merkel said that "position
remains too far apart".
Going into next week, trade is likely
to be volatile on Monday with US traders returning from a four-day
weekend and all eyes pinned on the Eurogroup meeting on Greece.
Financial trader Shavaz Dhalla from Spreadex said that investor’s
patience is "nearing the end of its tether" with Monday's meeting being
the third of its kind without an agreement. "A lack of agreement on
Monday could prove ‘three strikes are out’ for investor’s tolerance
regarding Greece’s negotiations with its international lenders," he
said.
FTSE 100: Water groups take a bath; SABMiller extends gains
Utilities
stocks were under pressure today after voicing concerns with Ofwat's
proposed water price controls in response to a statement by the
regulator this week which welcomed "constructive" criticism. The general
consensus is that water suppliers do not agree with the proposals from
the regulator, which said that it wanted to set segmental price
controls.
Pennon and Severn Trent were in the red, while United Utilities
was registering slight gains. Investors were deciding to take caution
ahead of next week when interim results from all three companies are
due.
Xstrata was higher after saying that its nickel
division has completed the construction of the first production line at
the Koniambo project has been completed, with first metal anticipated in
January. It was announced yesterday afternoon that Xstrata's merger
with commodities giant Glencore has won the blessing of the European
Commission. Both stocks were making gains this morning.
Sector peer ENRC
rose after announcing that it is putting more on its Chairman's plate
in order to let its Chief Executive Officer focus more on operations,
"notably cost and operational efficiencies across the group's assets." Anglo American was also wanted after naming the leadership team for its UK construction joint venture with French cement group Lafarge.
Drinks giant SABMiller
was on the up after releasing its first-half results yesterday. The
stock was raised from 'reduce' to 'neutral' by Nomura this morning,
which cited alleviated concerns about the company's margins. Meanwhile,
Credit Suisse reiterated its 'outperform' rating on the shares today,
saying that while the stock is trading at a 6% premium to the wider
consumer staples sector, it believes it can "re-establish a c10% premium
rating".
Oil titan BP was higher after appointing
long-running company employee Lamar McKay as the new head of its
Upstream division, which is thought to ease the pressure on current
frontman Bob Dudley.
FTSE 250: Lonmin and Hochschild take a hit
Platinum miner Lonmin was
among the heaviest fallers after UBS slashed its target for the shares
from 260p to 240p and reiterated its ‘sell’ recommendation on the back
of lower estimated production figures and higher costs. Analysts said
that the stock is expected to be “volatile” during the period of the
ongoing rights issue.
Precious metals group Hochschild Mining was
also under the weather after saying that it now expects to get the
construction permits for its Inmaculada and Crespo projects in the
second half of 2013 following delays by the Peruvian government.
Mortgage provider Paragon Group of Companies
was continuing to make gains following its full-year results on Tuesday
in which it unveiled record profits and a 50% rise in the dividend.
Retailers were also performing well today with Home Retail and SuperGroup among
the best performers. Seymour Pierce reiterated its ‘buy’ rating for
SuperGroup today, saying that although shares have had a good run over
the last year – partly due to a sector re-rating – “it is still good
value considering the operational gearing in the earnings and expected
step-up in the earnings growth rate over the medium term”.
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FTSE 100 - Risers
GKN (GKN) 218.40p +1.87%
IMI (IMI) 1,017.00p +1.70%
Johnson Matthey (JMAT) 2,326.00p +1.62%
Evraz (EVR) 241.10p +1.60%
British Sky Broadcasting Group (BSY) 777.50p +1.50%
Petrofac Ltd. (PFC) 1,630.00p +1.49%
Kingfisher (KGF) 280.70p +1.34%
Aberdeen Asset Management (ADN) 342.70p +1.27%
Schroders (SDR) 1,589.00p +1.27%
Croda International (CRDA) 2,332.00p +1.26%
FTSE 100 - Fallers
Polymetal International (POLY) 1,099.00p -0.81%
Morrison (Wm) Supermarkets (MRW) 261.70p -0.65%
Standard Chartered (STAN) 1,437.50p -0.48%
Pennon Group (PNN) 605.00p -0.33%
Whitbread (WTB) 2,355.00p -0.21%
Tullow Oil (TLW) 1,393.00p -0.21%
Rio Tinto (RIO) 3,006.50p -0.12%
Serco Group (SRP) 555.50p -0.09%
Associated British Foods (ABF) 1,450.00p -0.07%
Sage Group (SGE) 307.70p -0.03%
FTSE 250 - Risers
New World Resources A Shares (NWR) 233.00p +4.06%
Home Retail Group (HOME) 110.30p +3.18%
Stobart Group Ltd. (STOB) 110.40p +2.70%
Paragon Group Of Companies (PAG) 248.40p +2.64%
Ruspetro (RPO) 85.95p +2.32%
Pace (PIC) 185.10p +2.32%
Diploma (DPLM) 478.30p +1.96%
Bumi (BUMI) 264.70p +1.89%
TR Property Inv Trust (TRY) 163.00p +1.88%
Electrocomponents (ECM) 212.60p +1.77%
FTSE 250 - Fallers
Kenmare Resources (KMR) 30.33p -6.27%
Savills (SVS) 424.80p -3.01%
NMC Health (NMC) 169.80p -2.64%
Lonmin (LMI) 291.40p -2.57%
Perform Group (PER) 395.00p -2.47%
Hochschild Mining (HOC) 475.50p -2.42%
Renishaw (RSW) 1,777.00p -2.36%
RPS Group (RPS) 210.70p -2.32%
Sports Direct International (SPD) 391.20p -2.13%
Carpetright (CPR) 661.00p -2.07%
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| European broker round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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European Markets Finished In The Green Friday
The European markets
ended Friday's session in positive territory, following a day of mostly
directionless trading. The markets bounced back and forth between gains
and losses after indications that the EU meeting in Brussels on the
region's long-term budget may not reach a deal due to disagreement among
member states. The return of the U.S. markets to active trading,
following the Thanksgiving holiday, provided a boost in the afternoon.
Investors were also pleased with the unexpected increase in German
business confidence.
Discord among EU member states on the
region's long-term budget is threatening to delay a deal on crucial
spending plans for the coming years, deepening the economic crisis that
has engulfed most of Europe.
German Chancellor Angela Merkel has
warned that there may not be a final deal at this meeting. "Positions
are quite far apart," she told reporters after the first session of the
meeting on Thursday. There should be some progress, but may need to push
the talks further to a second stage for a final agreement, Merkel said.
French President Francois
Hollande said it is more likely that the meeting will not reach a deal
on Friday. There are signs of a relative return of confidence in the
euro area due to decisions taken by the European leaders as well as the
central bank, the European Central Bank President Mario Draghi said Friday.
Speaking at the 22nd Frankfurt European Banking Congress, Draghi said
the decision by the European leaders to form a "financial union" by
creating a single bank supervisor around the ECB and the proposal that
European banks would receive direct capital support from the European
Stability Mechanism, helped to calm markets. Further, the ECB had
announced another round of bond purchases called Outright Monetary
Transactions or OMTs.
The ECB stands ready to implement
OMTs as and when required, he reiterated. The central bank has said that
it will intervene in the market to buy government bonds if Spain places
a request to the EU-IMF for a bailout. Such intervention will be aimed
at lowering the borrowing costs for the country.
Standard and Poor's
on Friday affirmed France's AA+ rating, citing the government's
commitment to budgetary and structural reforms which would improve the
country's growth potential.
The rating agency confirmed
its long-and short-term sovereign credit ratings on France at
'AA+/A-1+'. It also maintained its long-term outlook at 'negative', and
said that there is at least a one-in-three chance that the ratings could
be lowered in 2013.
The European Council on Thursday named
Luxembourg's Yves Mersch to the Executive Board of the European Central
Bank, after months of battle with the European Parliament which wanted a
woman to occupy the post.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.73 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.57 percent.
The DAX of Germany climbed by 0.89 percent and the CAC 40 of France gained 0.87 percent. The FTSE 100 of the U.K. rose by 0.49 percent and the SMI of Switzerland advanced by 0.54 percent.
In Frankfurt, SMA Solar finished unchanged. The stock was upgraded to ''Neutral'' from ''Underweight'' at HSBC.
Infineon Technologies increased by 0.14 percent, after a broker downgrade. Nomura downgraded Metro to ''Neutral'' from ''Buy.'' The stock finished
higher by 1.62 percent. The downgrade also weighed on shares of Wm.
Morrison in the U.K. and Carrefour in France. Wm. Morrison declined by
0.65 percent, while Carrefour lost 0.26 percent. Fraport dropped by 2.41 percent, after HSBC downgraded the stock to "Underweight'' from ''Neutral.''
In Paris, EADS declined by 1.37 percent, on reports that Germany will buy the company's shares from France. Berenberg downgraded Danone to ''Sell'' from ''Hold.'' The stock finished higher by 0.09 percent.
In London, SABMiller rose by 1.18 percent. Nomura upgraded
its rating on the stock to "Neutral" from "Reduce." The brewer gained
6.4 percent yesterday, after the company reported an increase in net
profit.
Glencore International climbed by 0.63 percent and Xstrata added 0.59 percent. The stocks extended their gains from Thursday, after their merger received approval from European Union regulators.
Hotels and
pubs operator Fuller, Smith & Turner reported increases in profit
and revenue for the first half of the year, and hiked its dividend. The stock gained 3.24 percent.
Sweett Group
surged by 10.91 percent. The property and infrastructure professional
services firm reported a turnaround to profit in its first half, helped
by disposal of investments.
Confidence among German businesses
improved unexpectedly in November as firms were less pessimistic about
future developments and expressed greater satisfaction with their
current work, results of a survey by the Ifo Institute revealed on
Friday.
The headline business climate index for the German
industry and trade rose to 101.4 in November from 100 in the previous
month. Economists had expected the reading to fall to 99.5. The
improvement came after six consecutive declines.
The German economy
expanded in the third quarter of 2012 in line with the preliminary
estimates, largely supported by foreign demand as well as domestic
consumption, a detailed report from the Federal Statistical Office
showed Friday.
The seasonally adjusted gross domestic product rose
0.2 percent quarter-on-quarter in the third quarter, unrevised from the
preliminary estimate. Nonetheless, it was the weakest growth rate
recorded so far this year after a 0.3 percent increase in the second
quarter and 0.5 percent gain in the first three months of the year.
New orders received by Germany's construction firms decreased from last year in September, data released by the Federal Statistical Office
showed Friday. The total value of new construction orders, on a
price-adjusted basis, fell 3.8 percent year-on-year in September.
France's
business confidence improved more than economists expected in November,
but the overall industrial economic situation remained negatively
oriented, data from statistical office Insee showed Friday.
The
headline business confidence index rose to 88 in November from 85 in
October, which was lower than September's reading of 90. Economists were
looking for a more modest rise to 87 in November.
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| US Market Report |
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Stocks Seeing Considerable Strength In Abbreviate Session
Stocks
have moved sharply higher over the course of the trading day on Friday,
extending the upward move seen earlier in the week. The markets are
benefiting from broad based buying interest despite below average
volume.
The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 107.40 points or 0.8 percent at 12,944.29, the Nasdaq is up 32.44 points or 1.1 percent at 2,958.99 and the S&P 500 is up 11.98 points or 0.9 percent at 1,403.01.
The
strength that has emerged on Wall Street comes as traders continue to
pick up stocks at reduced levels following the sell-off that was seen in
the weeks following the elections.
Positive sentiment has also
been generated by a report from the Ifo Institute showing an unexpected
improvement in German business confidence in the month of November.
The headline German business climate index rose to 101.4 in November from 100 in October, while economists had expected the index to fall to 99.5.
Investors are
also keeping an eye on developments in the retail sector, attempting to
gauge the strength of the holiday shopping season on reports regarding
the Black Friday crowds.
A number of retailers opened their doors
even earlier than usual this year in order to increase sales on what is
already one of the busiest shopping days of the year.
However,
the upward move may be being exaggerated by the light volume, which
comes as many traders remain away from their desks amid the abbreviated
trading session.
Sector News
Networking stocks have shown a strong move to the upside, driving the NYSE Arca Networking
Index up by 3.2 percent. With the gain, the index is currently poised
to end the session at its best closing level in over a month.
Alcatel-Lucent
(ALU) has helped to lead the networking sector higher, with the
communications equipment maker up by 13 percent after Bloomberg said the
company is in talks with Goldman Sachs (GS) about obtaining a loan to
strengthen its balance sheet.
Significant strength has also emerged among computer hardware stocks, as reflected by the 2.9 percent gain being posted by the NYSE Arca Computer Hardware Index. Lexmark (LXK) and Dell (DELL) are turning in two of the sector's best performances.
Most of the other major sectors have also moved to the upside on the day, with semiconductor, software, gold, and brokerage stocks posting notable gains.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Friday, although the Japanese market was closed for a public holiday. Hong Kong's Hang Seng Index and China's Shanghai Composite Index advanced by 0.8 percent and 0.6 percent, respectively.
In the bond market, treasuries continue
to turn in a lackluster performance despite the rally on Wall Street.
Subsequently, the yield on the benchmark ten-year note, which moves
opposite of its price, is down by less than a basis point at 1.685
percent.
| Friday broker round-up |
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African Minerals: Citigroup reduces target from 500p to 470p, buy recommendation reiterated.
Alpha Real Trust: Panmure Gordon reduces target from 77p to 76p, hold recommendation kept.
Antofagasta: Alphavalue raises target from 1073.30p to 1346.40p and upgrades to add.
British Land: Espirito Santo moves target from 571p to 578p, buy recommendation remains unchanged.
Close Brothers Group: UBS raises target from 830p to 850p, neutral rating kept.
Cobham: Jefferies raises target from 230p to 240p, buy recommendation maintained.
Daily Mail and General Trust:
Barclays Capital raises target from 550p to 560p, equal weight rating
unchanged. Panmure Gordon raises target from 635p to 700p, buy
recommendation maintained.
Darty: Alphavalue moves target from 57.20p to 57.90p and downgrades to add.
easyJet:Nomura raises target from 650p to 850p, buy recommendation kept.
Earthport: Panmure Gordon reduces target from 28ß to 24p, buy recommendation remains unchanged.
Halfords Group: Citigroup raises target from 295p to 325p, neutral rating reiterated.
Hochschild Mining: Numis reduces target from 505p to 450p, hold recommendation maintained.
Lonmin: UBS reduces target from 260p to 240p, sell recommendation unchanged.
Majestic Wine: Espirito Santo reduces target from 470p to 460p and downgrades to neutral.
Pennon Group: Exane BNP Paribas reduces target from 700p to 660p and upgrades to neutral.
SABMiller:
Deutsche Bank raises target from 2700p to 2800p, hold recommendation
reiterated. JP Morgan raises target from 2770p to 2855p, overweight
rating kept. Credit Suisse raises target from 2950p to 3100p, outperform
recommendation maintained. Nomura raises target from 2600p to 2800p and
upgrades from reduce to neutral. Societe Generale raises target from
2800p to 2970p, hold recommendation remains unchanged.
Signet Jewelers: Deutsche Bank raises target from 3860p to 4000p, buy recommendation maintained.
Talk Talk Telecom: Berenberg raises target from 180p to 265p and upgrades to buy.
Tangent Communications: Canaccord raises target from 10p to 12.75p, buy recommendation kept.
Thomas Cook: Alphavalue moves target from 25.90p to 26.80p and downgrades to add. Investec raises target to 40p and reiterates buy.
Xchanging: JP Morgan raises target from 108p to 129p, neutral rating remains unchanged.
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