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Stocks edge higher after Greece votes on austerity
Market Movers
techMARK 2,096.66 +0.41%
FTSE 100 5,813.04 +0.37%
FTSE 250 11,974.85 +0.11%
Stocks rebounded on Thursday morning, albeit only slightly, following steep falls the day before, after Greece voted in favour of its strict austerity measures.
Wednesday's session started strongly after Barack Obama was re-elected as the US President, sparking speculation that easing measures would continue under his leadership.
However, stocks sank in afternoon trade after the European Commission
cut its forecasts for gross domestic product (GDP) growth in the
Eurozone this year to 0.1% from 1% before. The FTSE 100 lost 1.58% of
its value by the end of trade last night.
"European headline shares opened firmly this morning as opportunistic buyers exploited yesterday’s sharp sell-off
in equities owing to the completion of the US elections which led to
investors focusing their attention back on the dire state of the global
economy resulting in investor’s sentiment being brought down from cloud
nine," said financial trade Shavaz Dhalla from Spreadex.
As for Greece,
153 policymakers last night voted in favour of the country's proposed
austerity measures, just above the 151 votes needed. "The vote came at a
political cost, with the vote taking place against a backdrop of tear
gas and unrest in the capital and prompted 18 policymakers to abstain
from voting," explains market analyst Michael Hewson from CMC Markets.
Next on Athens's agenda will be the parliamentary vote on next year's
budget on Sunday, which will unlock the next round of the EU bailout if
passed.
Investors had a flood of corporate results to digest this morning, as dozens of FTSE 350 heavy hitters updated the market. However, the focus of today's session will likely be on the Bank of England and European Central Bank policy decisions scheduled for this afternoon.
FTSE 100: IAG falls on Vueling takeover speculation
IAG
was lower after saying that is thinking about making an offer to take
over Spanish airline Vueling, buying up the remaining stake that it does
not already own.
Publishing and exhibitions firm Reed Elsevier
gained after reporting that it remains on track to perform in line with
full-year expectations after it posted underlying revenue growth 4% for
the first nine months.
Sweeteners firm Tate & Lyle
declined despite beating consensus estimates in the first half on the
group level. Jefferies highlighted that Speciality Food Ingredients
profits were slightly below its forecasts "but underlying trends remain
robust which support a strong H2 performance".
Mining group ENRC
fell after saying that revenue declined in the first nine months of
2012 due to lower selling prices for its principal commodities.
Supermarket group Morrisons
was off the shopping list after lower-than-anticipated sales in the
third quarter, though it did say that its full-year performance will be
in line with expectations.
Insurance group Aviva was
wanted after saying that it nearing the sale of its US life and
annuities business, as it reported a slight rise in net asset value.
Experian
fell despite hiking its dividend and reporting strong revenue grout in
the first half. The company also announced an efficiency programme
designed to save the firm $75m a year.
Asset manager Schroders
rose after reporting a slight gain in assets under management in the
third quarter to £202.8bn, up from £194.6bn at the end of June.
Real estate investment trust Land Securities was lower after earnings per share fell 10.2% in the first half.
| AIM/Small Cap Report |
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FTSE 100 - Risers
Tesco (TSCO) 328.30p +1.86%
Compass Group (CPG) 701.00p +1.67%
Aviva (AV.) 333.60p +1.55%
Burberry Group (BRBY) 1,214.00p +1.25%
Smiths Group (SMIN) 1,084.00p +1.21%
Schroders (SDR) 1,582.00p +1.09%
Randgold Resources Ltd. (RRS) 7,025.00p +1.08%
Tullow Oil (TLW) 1,407.00p +1.00%
Reed Elsevier (REL) 621.00p +0.98%
BHP Billiton (BLT) 1,975.50p +0.97%
FTSE 100 - Fallers
Tate & Lyle (TATE) 714.00p -2.72%
Eurasian Natural Resources Corp. (ENRC) 301.10p -1.28%
Kazakhmys (KAZ) 694.00p -1.21%
Land Securities Group (LAND) 801.50p -1.17%
Lloyds Banking Group (LLOY) 44.26p -0.49%
Morrison (Wm) Supermarkets (MRW) 266.40p -0.41%
WPP (WPP) 812.50p -0.37%
Severn Trent (SVT) 1,532.00p -0.33%
Sage Group (SGE) 314.00p -0.29%
GKN (GKN) 210.70p -0.19%
FTSE 250 - Risers
Ruspetro (RPO) 108.40p +8.40%
Yule Catto & Co (YULC) 164.70p +6.40%
BTG (BTG) 346.60p +5.80%
Imagination Technologies Group (IMG) 497.00p +3.76%
Supergroup (SGP) 680.50p +3.18%
Bumi (BUMI) 286.90p +3.05%
Cable & Wireless Communications (CWC) 36.99p +2.95%
Micro Focus International (MCRO) 589.50p +2.70%
Petra Diamonds Ltd.(DI) (PDL) 102.00p +1.69%
Rightmove (RMV) 1,616.00p +1.64%
FTSE 250 - Fallers
Balfour Beatty (BBY) 271.50p -11.27%
Chemring Group (CHG) 240.00p -6.98%
Dialight (DIA) 1,104.00p -6.60%
Carillion (CLLN) 299.10p -3.52%
New World Resources A Shares (NWR) 263.20p -3.34%
Interserve (IRV) 381.50p -2.13%
Spirent Communications (SPT) 136.40p -2.01%
Genus (GNS) 1,423.00p -1.86%
Kier Group (KIE) 1,210.00p -1.79%
ITE Group (ITE) 182.60p -1.67%
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| European broker round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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ArcelorMittal: UBS downgrades to SELL from neutral and lowers price target to $3.42 from $6.01.
L'Oréal: Nomura reiterates UNDERWEIGHT rating and raises price target by 1% to €85.
Thales: UBS reiterates NEUTRAL rating and raises price target to €27 from €25.
UK Event Calendar
INTERIMS
3i Infrastructure, BTG, Cable & Wireless Communications, Charles
Stanley Group, Dairy Crest Group, Electrocomponents, Experian, Flybe
Group, Shanks Group, Tate & Lyle
INTERIM DIVIDEND PAYMENT DATE
British American Inv Trust, Petropavlovsk, Yule Catto & Co
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (GER) (07:00)
Balance of Trade (US) (13:30)
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
Current Account (GER) (07:00)
ECB Interest Rate (EU) (12:45)
Initial Jobless Claims (US) (13:30)
Retail Price Index (GER) (07:00)
Q3
Coca-Cola HBC S.A., Corio NV, Lancashire Holdings, Talvivaara Mining Company
ANNUAL REPORT
Associated British Foods
IMSS
Aviva, Balfour Beatty, Bumi, Eurasian Natural Resources Corp.,
Hammerson, Hardy Oil & Gas, Howden Joinery Group, Morrison (Wm)
Supermarkets, Reed Elsevier, Rightmove, RSA Insurance Group, Schroders,
Schroders (Non-Voting), Spirent Communications, Supergroup, Trinity
Mirror, Wetherspoon (J.D.), Yule Catto & Co
EGMS
Palmaris Capital
AGMS
Craneware, Genus, IndigoVision Group, Macau Property Opportunities Fund Ltd., New Star Investment Trust, Wetherspoon (J.D.)
UK ECONOMIC ANNOUNCEMENTS
Balance of Trade (09:30)
BoE Interest Rate Decision (12:00)
FINAL DIVIDEND PAYMENT DATE
Edge Performance VCT 'D' Shares, Edge Performance VCT 'E' Shares, Edge
Performance VCT 'F' Shares, Edge Performance VCT G Shares, Penna
Consulting
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| US Market Report |
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Stocks battered as fiscal cliff fears loom
Market movers
Dow Jones Industrials: -313 at 12,933
NASDAQ Composite: -75 at 2,937
S&P 500: -34 at 1,395
There
were no risers to be found among the constituents of the Dow Jones
industrial average as the benchmark index endured its worst day of 2012.
Most market commentary is attributing this to fears regarding
the looming ‘fiscal cliff’ and the crisis in the Eurozone, with the
emphasis on the former.
Ratings agency Fitch added fuel
to the fire, warning that President Obama will have to move swiftly if
he wishes to avoid a ratings downgrade, from AAA, next year.
Coal and life assurance sectors pummelled
From
a sector stand-point, it was precisely those stocks which stood to gain
most had Mitt Romney won yesterday's presidential election that got
hammered hardest: Coal, Life assurance, Investment services & banks
and Defence.
Renewable products company Amyris defied the weaker trend after announcing a third quarter loss that was not as bad as feared.
Media giant Time Warner
was also in favour after third quarter results came in ahead of
expectations. Earnings per share of 86 cents were four cents higher than
the market had been expecting.
Canned cheese maker Kraft Foods,
which carried off confectionery company Cadbury in 2009 in a
smash-and-grab raid, has released its first set of results since
spinning off its Mondelez International business. Earnings per share of
79 cents were well up on the 40 cents racked up in the third quarter of
last year.
Department store Macy's topped market
expectations with its third quarter earnings per share (EPS) of 36
cents; analysts covering the stock had pencilled in a figure of 29
cents.
Canadian lager brewer Molson Coors also beat expectations with underlying EPS of $1.37 versus expectations of $1.34.
S&P 500 - Risers
Tenet Healthcare Corp. (THC) $27.34 +9.58%
JDS Uniphase Corp. (JDSU) $11.15 +4.89%
Time Warner Inc. (TWX) $44.91 +4.18%
Best Buy Co. Inc. (BBY) $15.47 +3.48%
Hospira Inc. (HSP) $31.37 +2.65%
American Tower Corp (Reit) (AMT) $75.24 +1.99%
Netflix Inc. (NFLX) $77.68 +1.72%
Public Storage (PSA) $143.34 +1.64%
News Corp. Class A (NWSA) $24.67 +1.61%
Juniper Networks Inc. (JNPR) $17.77 +1.31%
S&P 500 - Fallers
Alpha Natural Res (ANR) $8.45 -12.16%
Peabody Energy Corp. (BTU) $26.24 -9.64%
Morgan Stanley (MS) $16.63 -8.58%
Humana Inc. (HUM) $70.16 -7.88%
Lincoln National Corp. (LNC) $23.79 -7.83%
Bank of America Corp. (BAC) $9.23 -7.14%
Devon Energy Corp. (DVN) $55.41 -7.06%
MetLife Inc. (MET) $32.59 -6.97%
Goldman Sachs Group Inc. (GS) $117.98 -6.55%
CONSOL Energy Inc. (CNX) $33.28 -6.44%
Dow Jones I.A - Risers
None
Dow Jones I.A - Fallers
Bank of America Corp. (BAC) $9.23 -7.14%
JP Morgan Chase & Co. (JPM) $40.48 -5.60%
Hewlett-Packard Co. (HPQ) $13.69 -4.93%
Intel Corp. (INTC) $20.91 -3.77%
Exxon Mobil Corp. (XOM) $88.18 -3.74%
Caterpillar Inc. (CAT) $85.02 -3.47%
AT&T Inc. (T) $33.64 -3.34%
Merck & Co. Inc. (MRK) $44.46 -3.18%
Alcoa Inc. (AA) $8.48 -2.97%
United Technologies Corp. (UTX) $77.68 -2.86%
Nasdaq 100 - Risers
Netflix Inc. (NFLX) $77.68 +1.72%
News Corp. Class A (NWSA) $24.67 +1.61%
Henry Schein Inc. (HSIC) $78.30 +1.42%
Warner Chilcott Plc (WCRX) $11.44 +0.79%
F5 Networks Inc. (FFIV) $88.35 +0.78%
Starbucks Corp. (SBUX) $51.81 +0.19%
Nasdaq 100 - Fallers
Research in Motion Ltd. (RIMM) $8.24 -9.05%
Apollo Group Inc. (APOL) $19.89 -6.18%
Randgold Resources Ltd. Ads (GOLD) $114.39 -5.82%
Perrigo Company (PRGO) $109.65 -4.96%
Applied Materials Inc. (AMAT) $10.95 -4.45%
Nuance Communications Inc. (NUAN) $21.74 -4.27%
Apple Inc. (AAPL) $558.00 -4.26%
KLA-Tencor Corp. (KLAC) $46.92 -4.05%
Lam Research Corp. (LRCX) $36.17 -4.03%
Altera Corp. (ALTR) $30.57 -3.98%
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| Wednesday newspaper round-up |
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Republicans, IAG, Xstrata, BAE
American
financial markets plunged as a re-elected President Obama returned to
the White House to face a looming crisis over the nation’s finances, and
a Congress still divided over how to fix them. Hours after Mr Obama’s
decisive win, markets in New York began to slide at the prospect of a
return to gridlock in Washington and a severe cut in the forecast for
European growth. Republicans smarting from their defeat said that they
were “ready to work with” Mr Obama on tax reform and deficit reduction,
but billions had already been wiped off the value of big US defence
companies as the Dow Jones fell by 312 points in the worst day’s trading
this year. In London the FTSE 100 closed down 93.27 points, or 1.6 per
cent. The sell-off came after a terse initial statement from John
Boehner, the Republican House Speaker, who said that his party’s
continued control of the House of Representatives meant that Mr Obama
had “no mandate for raising tax rates,” according to The Times.
International Airlines Group,
owner of British Airways and Iberia, is looking at mounting a full
takeover of Vueling, Spain's second biggest domestic airline. In a
statement released after the close of markets on Wednesday, IAG said its
board would discuss at a meeting on Thursday making an offer for 100%
of the share capital of the Barcelona-based low cost carrier. IAG’s
Spanish business, Iberia, already owns a 45.85% stake in Vueling,
acquired in 2009. The airlines group said “no decision to make an offer
has yet been reached nor, accordingly, on any of its potential terms,
including in particular the price”. "Further announcements will be made
in due course when a decision is made," IAG added. Vueling, which has a
market cap of €171m, carries about 12m passengers a year and made a
pre-tax profit of €14.8m (£11.m) in 2011, The Telegraph says.
Andrew Sentance, PricewaterhouseCoopers’ senior economic adviser and a member of the MPC
until earlier this year, set out his opposition to another round of
quantitative easing and said rates needed to rise to 3 per cent by 2015
to reduce the risk of “distorting” the economy. His comments came as the
European Commission warned that the Chancellor is likely to miss his
debt reduction target when the Office for Budget Responsibility updates
its forecasts next month. “It appears that the Government may miss its
target of having debt fall as a share of GDP by 2015-16 if no new
measures are introduced in the Autumn Statement on December 5th,” the EC
said in its economic update. While acknowledging the role quantitative
easing (QE) played “in stabilising the UK economy in 2009 and helping
bring about a return to growth”, Mr Sentance said the MPC should vote
against money printing at today’s meeting, The Telegraph explains.
One of Britain's leading shareholder advisory groups has urged Xstrata
investors to reject the commodities trader Glencore's $33bn (£21bn)
takeover offer. Pirc said it was concerned over the level of due
diligence carried out on Glencore and insufficient independent board
representation at Xstrata. It is also concerned about the "rather
lucrative package" for executives should the deal go through. Xstrata
investors will be able to vote on the merger and associated pay deals on
20 November, The Independent writes.
BAE Systems is on
the cusp of sealing a deal to sell 60 Typhoon fighter jets to the
United Arab Emirates. Reports on Wednesday said Prime Minister David
Cameron, who is on an trip to boost British exports across the Middle
East, had secured ‘political agreement’ to make the multi-billion pound
sale. Both countries said earlier this week they planned to strike up a
partnership over the Typhoon jet, which was used in combat operations by
the RAF over Libya and secured Britain's airspace during the London
Olympics, The Daily Mail reports.
UK pension funds are holding more bonds than equities for the first time since the so-called cult of equity
in the 1950s, say leading City fund managers. The switch into bonds,
which began in about 2002, is the most significant shift in market
allocation since the late George Ross Goobey made a landmark speech
praising equities as a way of generating inflation-linked growth in
1956. Alasdair MacDonald, head of investment strategy at consultants
Towers Watson, said: “This is a watershed moment for UK pensions.” Alan
Wilde, head of fixed income and currency at Barings, added: “The cult of
equity is dead or has at least been on life support since 2002/3
following the dotcom crash and corporate problems in the US with the
likes of Enron,” The Financial Times says.
Living more than a
century will soon be "the norm" and make ageing the greatest threat to
the UK's economic future, warned Otto Thoresen, director general of the
Association of British Insurers (ABI). "We are living longer, of which I
know you are all very aware. I know of several insurers, and you
may be among them, who are now modelling pensions and retirement
savings products on the assumption that customers could live to be 120
or 125 – and with very different patterns of retirement," he said in a
speech at an actuarial conference last night, The Telegraph reports.
Conservative and socialist lawmakers from Greece's
three-party coalition government voted to adopt the €18.5bn budget cuts
by 2016 despite protests earlier in the day by more than 70.000 people
who massed outside the parliament. Violent protesters threw fire bombs
and rocks at police, who responded with stun grenades, tear gas and the
first use of water cannon in Greece in years. Inside the building,
lawmakers interrupted the debate as Parliament employees went on strike
to protest wage cuts. According to Athanassios Nakos, second deputy
speaker of the parliament, 153 out of 299 lawmakers voted in favour of
the bill that includes spending cuts and reforms to be implemented by
2016, while 128 voted against, The Telegraph writes
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