London close: Late rally not enough as stocks finish lower
Market Movers
techMARK 2,079.39 -0.23%
FTSE 100 5,769.68 -0.11%
FTSE 250 11,842.42 -0.45%
After
steep falls for most of the session, UK stocks picked up in afternoon
trade to finish only slightly lower by the close after a reading of US
consumer sentiment smashed expectations.
The FTSE 100 finished at 5,770 this evening, well off its intraday low of 5,717.
The University of Michigan consumer confidence index
from 82.6 to 91.3 points in November, marking the highest level since
July of 2007 when the S&P 500 hit its all-time high. Analysts's were
looking for a slight rise to just 83 points.
Nevertheless, it was a "rocky day" for European financial markets,
as market strategist Ishaq Siddiqi from ETX Capital explained: "Kicking
off positively on encouraging China economic data points only to see
pessimism take over once again as EU lawmakers playing a game of
brinkmanship with Greece’s financial future. This unnerved markets
considerably as the likelihood that we will see a signoff for the next
bailout tranche at Monday’s Eurogroup meeting seem to be waning."
Markets seemed to shrug off some decent economic data from China
this morning, where industrial production and retail figures came in
better than forecast. Meanwhile, consumer price index (CPI) inflation
was lower than expected in October, which "leaves the door wide open for
further stimulus", according to market analyst Craig Erlam from Alpari.
Worries about the impending US 'fiscal cliff' and Greece's bailout have taken their toll on stock markets this week.
While Greek policy-makers
voted in favour of the country's harsh austerity measures on Wednesday
night, sentiment has been shaken after reports suggested yesterday that
the decision on whether to release the next tranche of the country's
bailout won't come next week as expected.
An EU official has
said that ministers will not decide on the next €31.5bn of aid until
late November as they wait for a final report from the Troika on how
Greece is complying with the terms of its bailout.
In the UK, the Bank of England
today announced plans to transfer to the Exchequer excess cash held in
its quantitative easing (QE) facility in order to pay down debt. The
Bank of England will transfer interest payments it has received as part
of its asset purchases programme since 2009 to the Treasury.
FTSE 100: Admiral accelerates after upgrade
Car insurance giant Admiral
was the highest riser of the day today after Bank of America hiked its
rating on the stock by two notches from 'underperform' to 'buy'.
Analyst William Hardcastle said: "We are shifting our focus away from
the PE growth multiple (close to historical low at 10.7 times) to the
2013 estimated dividend yield of 9.1%. This is now the highest in the
sector (and FTSE 100) following 18 percentage point relative
underperformance since 2011 results, and can't be ignored in our view.
We now see Admiral as an income rather than growth stock."
Tate & Lyle
shares were recovering after reporting a decline in first-half profits
on Thursday. Jefferies and UBS raised their target prices on the stock
today.
IAG was flying higher after revealing details of
a "transformation plan" to get its loss-making Spanish airline Iberia
back on track, which includes laying off 4,500 employees. To accompany
its third-quarter results, which showed a sharp decline in its bottom
line, the company said that a restructuring is needed to "save" Iberia
and return it to profitability.
Engine and power systems giant Rolls-Royce
edged higher after maintaining its outlook for the full year despite
lowering its assumptions for underlying growth in the Marine division.
Drinks behemoth Diageo gained after saying that it is to spend £1.285bn taking a majority stake (53.4%) in Indian spirits firm USL.
The banks were also out of favour today on concerns over the Eurozone; Barclays, RBS and Lloyds were among the worst performers. Meanwhile, HSBC
was being weighed down by reports that it is under investigation over
the alleged loss of data and that criminals have used accounts at its
operation in the tax haven of Jersey to evade tax and launder money.
| AIM/Small Cap Report |
FTSE 250: Talvivaara dives on leakage issues
Nickel miner Talvivaara
dropped on reports about leaks at its gypsum pond in Finland, later
confirmed by the company. The group issued a statement this afternoon
saying that the leak, first reported on Monday, was completely stemmed
this morning but a "further small leakage has occurred, and work to stem
it continues".
"Talvivaara re-iterates its opinion that the
re-start of the plant is an important step in the overall environmental
risk management of the mine," the company said.
Inter-dealer broker Tullett Prebon tanked after reporting a big drop in revenue in the four months to October on subdued market activity.
Waste management firm Shanks
made a good recovery after it revealed on Thursday that half-year
profit fell 29% as markets in the UK and Netherlands are hit by
recession and record lows on construction output.
Shares in recruitment firm Michael Page International
were also on the up today after UBS upgraded its rating on the stock
from 'neutral' to 'buy', saying that there is a more favourable
risk/reward balance. With MPI still trading close to the bottom of its
two-year share price range, UBS says that the risk/reward balance is now
"skewed to the upside".
FTSE 100 - Risers
Admiral Group (ADM) 1,054.00p +3.43%
Croda International (CRDA) 2,271.00p +2.76%
Tate & Lyle (TATE) 747.00p +2.33%
Smith & Nephew (SN.) 656.50p +2.18%
Rolls-Royce Holdings (RR.) 877.00p +1.86%
International Consolidated Airlines Group SA (CDI) (IAG) 170.60p +1.55%
BG Group (BG.) 1,057.00p +1.25%
Fresnillo (FRES) 1,929.00p +0.99%
CRH (CRH) 1,140.00p +0.89%
Tesco (TSCO) 324.80p +0.81%
FTSE 100 - Fallers
Barclays (BARC) 230.15p -2.73%
Evraz (EVR) 236.40p -2.48%
G4S (GFS) 253.40p -2.24%
National Grid (NG.) 689.00p -1.57%
Royal Bank of Scotland Group (RBS) 270.10p -1.57%
Eurasian Natural Resources Corp. (ENRC) 290.00p -1.56%
Aviva (AV.) 325.40p -1.48%
Tullow Oil (TLW) 1,382.00p -1.36%
United Utilities Group (UU.) 650.50p -1.29%
Pennon Group (PNN) 669.50p -1.18%
FTSE 250 - Risers
Shanks Group (SKS) 87.00p +4.82%
Perform Group (PER) 420.20p +3.75%
Computacenter (CCC) 344.80p +2.93%
AZ Electronic Materials SA (DI) (AZEM) 362.10p +2.46%
Michael Page International (MPI) 366.50p +2.32%
ITE Group (ITE) 187.50p +2.18%
Dunelm Group (DNLM) 675.00p +1.96%
International Personal Finance (IPF) 364.00p +1.79%
Grainger (GRI) 115.30p +1.59%
Stobart Group Ltd. (STOB) 108.80p +1.49%
FTSE 250 - Fallers
Talvivaara Mining Company (TALV) 103.50p -14.88%
Tullett Prebon (TLPR) 240.00p -8.40%
Man Group (EMG) 81.00p -6.03%
New World Resources A Shares (NWR) 253.00p -4.56%
Centamin (DI) (CEY) 71.25p -4.30%
Atkins (WS) (ATK) 652.00p -3.76%
Bank of Georgia Holdings (BGEO) 1,085.00p -3.56%
Anite (AIE) 136.80p -3.18%
Brewin Dolphin Holdings (BRW) 175.30p -2.93%
Jupiter Fund Management (JUP) 269.30p -2.92%
|
| Europe Market Report |
 |
| FTSE 100 | Euronext | Dax perf | CAC 40 |
 |  |  |  |
|
European Markets Closed Mixed With Weakness In Banks
The European markets ended
Friday's trading session with mixed results. Shares of European banks
were under pressure throughout the day. A number of Eurozone concerns
continued to weigh on sentiment, as well as concerns over the fiscal
cliff in the U.S. A series of positive economic releases from China was
unable to provide a boost to the markets.
A report from the Bank
of France stated that fourth quarter economic activity in France is
expected to decrease by 0.1 percent, which means the French economy will
enter recession. A meeting of European finance ministers will be held
on Monday, which is no longer expected to result in a determination on
when the next aid payment to Greece will be delivered.
China's
inflation dropped to its weakest level in nearly three years in October
amid slowing growth in food prices, leaving ample room for policymakers
to continue policy easing to stimulate economic growth. Growth in
China's industrial production accelerated more than expected in October
and retail sales also grew more than expected in October.
Investors will be watching President Barack Obama's speech
later today, for any comments regarding a potential resolution to the
fiscal cliff in the U.S. This will be Obama's first public comments
since winning a second term in Tuesday's election.
The Euro Stoxx 50
index of eurozone bluechip stocks increased by 0.18 percent, while the
Stoxx Europe 50 index, which includes some major U.K. companies,
finished unchanged.
The DAX of Germany dropped by 0.58 percent and the FTSE 100 of the U.K. fell by 0.11 percent. The SMI of Switzerland climbed by 0.02 percent and the CAC 40 of France rose by 0.47 percent.
In Frankfurt, Commerzbank declined by 6.27 percent and Deutsche Bank fell by 2.08 percent. EON decreased by 1.05 percent. Exane BNP downgraded the stock to "Neutral" from "Outperform."
JPMorgan
reduced its rating on HeidelbergCement. The stock finished lower by
2.82 percent. Allianz lost 0.68 percent, after reporting a surge in
third-quarter profit.
Rheinmetall declined by 5.43 percent, after its third quarter profit decreased. The company also lowered its forecast for the full year.
In Paris, Credit Agricole
dropped by 5.85 percent after reporting a hefty loss for the third
quarter. Nomura upgraded Societe Generale to "Buy" from "Reduce." The
stock closed down by 1.50 percent.
Lafarge, which
announced third-quarter financial results, finished higher by 1.63
percent. In London, Eurasian Natural Resources lost 1.56 percent and
Anglo American fell by 0.96 percent.
Barclays dropped by 2.73 percent and Lloyds Banking Group tumbled by 0.89 percent. Royal Bank of Scotland declined by 1.57 percent and HSBC fell by 0.33 percent.
International Consolidated Airlines climbed
by 1.55 percent. The airline is cutting 4,500 jobs in the Iberia unit
that ''continues to cause concern'' and ''is in a fight for survival.''
Diageo rose by 0.78 percent. The company has agreed to acquire a 27.4 percent stake in Indian spirits company USL.
Luxury
goods company Richemont reported higher profits for its first half and
also announced that its CEO Johann Rupert would leave the company next
year. The stock gained 0.31 percent in Zurich.
Germany's harmonized inflation came in at 2.1 percent in October, in line with flash estimate, final data from the Federal Statistical Office showed Friday. The annual rate also remained unchanged from September.
French
industrial production contracted more than forecast in September, the
latest figures from the statistical office Insee showed Friday. Total
industrial production fell 2.1 percent year-on-year in September, faster
than the 0.1 percent decline forecast by economists. Month-on-month,
output dipped 2.7 percent while expectations were for a 1 percent fall.
U.K. trade
improved in September underscoring the fact that exports played a major
role in economic rebound in the third quarter. Largely due to an
increase in exports, the trade in goods resulted in a smaller deficit of
GBP 8.4 billion in September compared to a GBP 10 billion shortfall in
August, a report published by the Office for National Statistics showed
Friday. It fell below a GBP 8.9 billion deficit forecast by economists.
British construction output
declined 2.6 percent quarter-on-quarter in the third quarter, the
latest figures from the Office for National Statistics showed Friday.
Data released along with the preliminary estimate for the third quarter
gross domestic product had shown a decline of 2.5 percent in
construction output. Therefore, this variation is estimated to have a
negligible impact on GDP, the statistical office said.
|
| US Market Report |
Stocks Moving Mostly Higher Following Recent Weakness
Stocks have
moved mostly higher over the course of the trading day on Friday,
regaining some ground after ending the two previous sessions sharply
lower. The markets have benefited from some bargain hunting following
the recent weakness.
The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 43.20 points or 0.3 percent at 12,854.52, the Nasdaq is up 21.39 points or 0.7 percent at 2,916.97 and the S&P 500 is up 8.03 points or 0.6 percent at 1,385.54.
The strength that has emerged on Wall Street is partly due to the release of a report from Reuters and the University of Michigan showing a significant improvement in U.S. consumer sentiment in the month of November.
The
report showed that the preliminary reading on the consumer sentiment
index for November came in at 84.9 compared to the final October reading
of 82.6. Economists had been expecting the index to show a much modest
increase for the month, predicting a reading of 83.3.
With the
much bigger than expected increase, the consumer sentiment index rose
for the fourth straight month, reaching its highest level since July of
2007.
Jennifer Lee, senior economist at BMO Capital, said,
"Looks like U.S. consumers were feeling the warm fuzzies so far in
November (although I'm not sure about those without power in the
Northeast). But in general, that's good news for consumer spending and
economic growth."
Before the start of trading, the Labor
Department released a separate report showing that U.S. import prices
rose by more than expected in the month of October amid a continued
increase in fuel prices.
The Commerce Department also
released a report showing a bigger than expected increase in wholesale
inventories in September as well as notable jump in wholesale sales.
Despite
the upward move by the broader markets, shares of Disney (DIS) are
seeing continued weakness after the entertainment giant reported fourth
quarter earnings that met analyst estimates but on weaker than expected
revenues.
Groupon (GRPN) and J.C. Penney (JCP) are
also showing notable moves to the downside after reporting third quarter
revenues that came in below analyst estimates.
Sector News
Biotechnology stocks
are seeing significant strength in mid-day trading, with the NYSE Arca
Biotechnology Index up by 2.3 percent. With the gain, the index has
nearly offset the losses posted in the two previous sessions.
Sequenom (SQNM) has helped to lead the biotech sector higher, surging up by 20.5 percent after reporting its third quarter results.
Considerable strength has also emerged among steel stocks, as reflected by the 1.8 percent gain being posted by the NYSE Arca Steel Index. The index is regaining some ground after ending Thursday's trading at a one-month closing low.
Defense, networking, and banking stocks have also shown strong moves to the upside on the day, while moderate weakness remains visible among housing and gold stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both ended the day down by 0.9 percent, while Australia's All Ordinaries Index dipped by 0.4 percent.
Meanwhile, the major European markets
turned mixed over the course of the trading day. While the French CAC
40 Index ended the day up by 0.5 percent, the German DAX Index fell by
0.6 percent and the U.K.'s FTSE 100 Index edged down by 0.1 percent.
In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note is unchanged at 1.632 percent.
|
| Broker tips |
Rolls-Royce, Randgold, Michael Page
Investec has retained its 'buy' rating and 930p target for power systems group Rolls-Royce after the company's in-line third-quarter statement on Friday.
The broker labelled today's trading update as "typically brief" but
confirming full-year guidance for good growth in underlying revenues and
profit, as well as break-even cash. "So another 'tick-in-the-box
update' that is unlikely to materially move the shares," Investec said.
Nomura has cut its target for gold miner Randgold Resources
from 7,400p to 7,075p and retained its 'reduce' rating on the stock,
saying the business needs to execute to maintain its premium rating.
The broker now says that fourth-quarter figures are under pressure,
following the poorly-received third-quarter results. Nomura is
forecasting full-year production of 819,000 ounces of gold, below
Randgold's own guidance of 825,000 ounces, saying that while its
possible that the miner will meet targets, "it will be a challenge".
UBS has upgraded its recommendation for recruitment firm Michael Page (MPI) from 'neutral' to 'buy', saying that there is a more favourable risk/reward balance.
In a separate staffing sector research note published today, UBS says
highlighted many "structural challenges" that face the industry (such as
fragmentation, alternative models and regulation) but also
"opportunities" (like professional staffing).
The broker said:
"MPI is not immune to these pressures, but we continue to see it as
relatively well-positioned within its peer group."
|
|
No comments:
Post a Comment