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Stocks flat despite upbeat data from China
Market Movers
techMARK 2,085.86 +0.08%
FTSE 100 5,775.93 -0.00%
FTSE 250 11,888.43 -0.06%
Cyclical
stocks such as miners and banks were limiting gains on the FTSE 100 on
Friday morning as the benchmark index attempted to recover from a
two-day sell-off on the back of concerns for the global economy.
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.
An EU official has said that
ministers will not decide until late November as they wait for a final
report from the Troika on how Greece is complying with the terms of its
bailout.
Nevertheless, helping to offset the gloom this morning was economic data from China
where industrial production and retail figures came in better than
forecast, "providing further evidence that the Chinese economy might be
in the early stages of a turnaround," said Markus Huber, head of German
HNM trading at ETX Capital.
"Furthermore consumer prices
continue to fall giving China some more leeway to put in place
additional measures like rate cuts and economic growth programmes to
boost growth in the months ahead," he said.
FTSE 100: Investors pleased with IAG's plan for Iberia
IAG
rose was flying higher after revealing details of a "transformation
plan" to get its loss-making Spanish airline Iberia back on track, which
includes the laying off of 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.
Mining and financial stocks were among the worst performers this morning, with ENRC, EVRAZ, Aviva and Old Mutual providing a drag.
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.
Real estate investment trust Hammerson
was flat after saying it remains "cautious" about the economic outlook
in the UK and Europe, even as it completed its strategic move from
office landlord to retail landlord.
Shares in water group Pennon were on the up after HSBC upgraded its rating on the stock to 'overweight'. In contrast, accountancy software firm Sage was hit by a downgrade from Investec to 'sell'.
FTSE 250: Michael Page lifted by upgrade
Recruitment company Michael Page International
was performing well this morning after UBS raised its recommendation
for the shares to 'buy' and hiked its target price from 400p to 450p.
Pest control firm Rentokil
declined after saying that "challenging conditions across Europe"
limited revenue growth in the third quarter. Sales were up just 1.6% in
the three months to the end of September.
Inter-dealer broker Tullett Prebon tanked after reporting a big drop in revenue in the four months to October on subdued market activity.
| AIM/Small Cap Report |
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FTSE 100 - Risers
Admiral Group (ADM) 1,060.00p +4.02%
Croda International (CRDA) 2,251.00p +1.86%
International Consolidated Airlines Group SA (CDI) (IAG) 170.50p +1.49%
Burberry Group (BRBY) 1,228.00p +1.15%
Smith & Nephew (SN.) 649.50p +1.09%
Tate & Lyle (TATE) 737.00p +0.96%
SABMiller (SAB) 2,678.50p +0.89%
Experian (EXPN) 1,057.00p +0.86%
British American Tobacco (BATS) 3,200.50p +0.83%
Bunzl (BNZL) 1,024.00p +0.79%
FTSE 100 - Fallers
Eurasian Natural Resources Corp. (ENRC) 287.50p -2.41%
Evraz (EVR) 239.60p -1.16%
Anglo American (AAL) 1,862.50p -1.14%
Aviva (AV.) 326.70p -1.09%
Old Mutual (OML) 167.00p -0.95%
BP (BP.) 426.50p -0.87%
British Land Co (BLND) 520.50p -0.86%
Kazakhmys (KAZ) 681.00p -0.80%
Resolution Ltd. (RSL) 236.00p -0.72%
Polymetal International (POLY) 1,110.00p -0.72%
FTSE 250 - Risers
Michael Page International (MPI) 376.20p +5.03%
Bumi (BUMI) 284.00p +3.76%
Renishaw (RSW) 1,798.00p +1.93%
Moneysupermarket.com Group (MONY) 153.50p +1.66%
JD Sports Fashion (JD.) 750.21p +1.38%
Diploma (DPLM) 440.00p +1.15%
Rotork (ROR) 2,361.00p +0.98%
Berendsen (BRSN) 575.50p +0.96%
TalkTalk Telecom Group (TALK) 192.20p +0.89%
Sports Direct International (SPD) 396.00p +0.89%
FTSE 250 - Fallers
Talvivaara Mining Company (TALV) 113.40p -6.74%
Tullett Prebon (TLPR) 247.80p -5.42%
Rentokil Initial (RTO) 84.95p -3.52%
Redrow (RDW) 157.80p -2.35%
Anite (AIE) 138.00p -2.34%
New World Resources A Shares (NWR) 259.10p -2.26%
IP Group (IPO) 110.30p -1.96%
Savills (SVS) 402.70p -1.92%
Dixons Retail (DXNS) 24.30p -1.70%
Bank of Georgia Holdings (BGEO) 1,106.00p -1.69%
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| European broker round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Alstom: Morgan Stanley reiterates OVERWEIGHT rating with a price target of €38. Banco Popular: AlphaValue upgrades to BUY from add with a price target of €1.40. EADS: RBS upgrades to ADD from neutral and raises price target to €32 from €31. Renault: AlphaValue upgrades to ADD from reduce and lowers price target to €37.50 from €37.70.
UK Event Calendar
INTERIM DIVIDEND PAYMENT DATE
Capital Lease Aviation, Cobham, Huntsworth, Hydrogen Group, Johnson
Service Group, Maven Income & Growth 2 VCT, office2office,
Rightmove, Spectris, Spirax-Sarco Engineering, Staffline Group, Unite
Group
QUARTERLY PAYMENT DATE
British Land Co
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Price Index (GER) (07:00)
Import and Export Price Indexes (US) (13:30)
U. of Michigan Confidence (Prelim) (US) (15:00)
Wholesales Inventories (US) (15:00)
Q3
Hellenic Telecom Industries SA ADS, International Consolidated Airlines Group SA (CDI)
GMS
Tangent Communications
IMSS
Beazley, EnQuest, Rolls-Royce Holdings, Tullett Prebon
SPECIAL DIVIDEND PAYMENT DATE
TR European Growth Trust
AGMS
Amur Minerals Corporation NPV, Jupiter Energy Ltd
TRADING ANNOUNCEMENTS
Rentokil Initial
FINAL DIVIDEND PAYMENT DATE
Daejan Holdings, JPMorgan Mid Cap Inv Trust, TR European Growth Trust
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| US Market Report |
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S&P 500 testing major technical support
Dow Jones Industrial: -0.94%
Nasdaq Comp.: -1.42%
S&P 500: -1.22%
The main US benchmarks finished the day firmly lower. The slight bounce
seen at the start of trading petered away as news broke that the
Eurozone may delay any new aid for Greece until the end of the month,
roughly two weeks later than had been expected.
Across the pond, markets were also digesting this afternoon’s decisions by the Bank of England and European Central Bank to leave their monetary policy unchanged.
Further weighing on sentiment today, a report from the Congressional
Budget Office warned that unless Congress reaches an agreement then a
recession will likely take place in the first half of 2013.
Not only that, some market commentary also suggests that selling ahead
of an expected increase in capital-gains taxes next year is a major
factor behind stock market declines.
Mc.Donald´s sales drop
Mc.Donald´s,
on the other hand, announced its first monthly decline in same-store
sales in nine years; these dropped by 1.8% versus the fall of a little
over 1% which was expected.
Bank stocks put in a decent performance this morning after the Federal Reserve approved JPMorgan Chase & Co´s plan to buy back $3bn in common stock in the first quarter of 2013. Sector peers Citigroup and Bank of America were also wanted.
Also of interest, Think bank reached a settlement with the Securities and Exchange Commission to resolve investigations into mortgage-backed securities.
Meantime, analysts at Oppenheimer believe that shares of Apple are oversold, they have said today.
TV network group CBS rose after third-quarter earnings beat analysts’ forecasts, up 16% year-on-year. In contrast, drinks company Monster Beverage tumbled after missing estimates.
From a sector stand-point the day´s worst performers were: Alternative
energies (-4.44%), Cloting&Accessories (-3.69%) and Computer
hardware (-2.98%). Airlines led on the upside (2.93%).
Of the
440 S&P 500 companies that have reported earnings 63.4% have so far
beat their consensus estimates, while 26.4% have missed. Conversely,
37.6% of reported S&P 500 companies have topped revenue
expectations, while 62.4% have missed, Reuters I/B/E/S data shows.
Historically 38% miss.
Earnings are now forecast to decline by
0.2% in the third-quarter as a whole. This is better than the 2.1%
decline analysts had feared at the start of October, but still well
below the 3.0% growth they had hoped for at the start of July, the AAII
says.
Bullish sentiment amongst small investors rose by 2.8
points last week, to 38.5%, according to the latest AAII survey
readings.
Worth keeping an eye on too, the S&P 500 is now
at its 200 day moving average, although allowance must be made for a
filtre.
Strong rise in exports
The
October trade deficit improved to -$41.5bn from -$43.8bn in September
(Consensus: -45bn). That on the back of a 3.1% month-on-month jump in
exports.
Initial weekly unemployment claims dropped by 9,000 to 355,000 (Consensus: 365,000).
Analyst Dean Maki from Barclays Research said: “Our view is that claims
are likely to move higher over the next couple of weeks, given the
historical pattern that claims typically start to increase in the week
after [Hurricane Sandy]”.
Treasuries rise again
10 year US Treasuries rose by 20/32 dollars, with yields at 1.62%.
Front month West Texas crude futures are now down by 0.16% to the 84.95 dollar level on the NYMEX.
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| Friday newspaper round-up |
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Greece, Merkel, Comet...
Eurozone leaders face a new round of brinkmanship over Greece’s
€174bn bailout after international lenders failed to bridge differences
on how to reduce Athens’ burgeoning debt levels, pushing the country
perilously close to defaulting on a €5bn debt payment due next week.
Officials had hoped to finalise the new programme, which extends
Greece’s rescue two years to 2016, at a meeting of eurozone finance
ministers in Brussels on Monday. That would free up a long-delayed
€31.3bn aid payment desperately sought by Athens. [Financial Times]
Germany's Angela Merkel
on Wednesday warned Britain not to turn its back on Europe and urged
its Prime Minister David Cameron to work with her to avoid deadlock at
European Union budget talks later this month. The leaders met in London
to try to iron out differences over the EU's €1 trillion (£800.5bn)
budget that threaten to block a deal and fuel fears that London is
drifting away from the 27-nation union. Describing plans to increase the
EU budget as "ludicrous", Cameron has threatened to veto any deal he
thinks is not in Britain's interests and will push for a real-terms
freeze. [The Telegraph]
Shop Direct, the home
shopping group owned by the Barclay brothers, is considering acquiring
the brand and website of the failed electricals retailer, Comet,
which is to start closing some stores next week. A host of retailers –
including the discounter B&M Bargains, the single price retailer 99p
Stores, and the homewares chain Dunelm – are among those looking to buy
parcels of Comet's shops on both short and long-term leases from the
administrator, Deloitte. The 236-store chain collapsed into
administration last week just nine months after it had been acquired by
OpCapita, the private investment firm whose chief executive is Henry
Jackson, for a token £2. [The Independent]
Oil cartel Opec
acknowledged the growing importance of unconventional 'shale’ oil
reserves for the first time on Thursday - as it cut its oil demand
forecasts on fears over eurozone growth. In its annual world oil outlook
report, Opec - whose 12 members include Saudi Arabia, Iran, Iraq and
Venezuela - said: “Shale oil represents a large change to the supply
picture.” While in previous reports “no significant shale oil
contribution to liquids supply was envisaged,” this year “a rise in the
importance of shale oil is expected”, Opec said. [The Telegraph]
Pay has risen at a faster rate for Britain’s biggest earners
than for anyone else over the past 25 years, according to research
published yesterday. The top 1 per cent of full-time workers have
enjoyed a 117 per cent surge in between 1986 and 2011, according to the
Office for National Statistics. The top 10 per cent and bottom 10 per
cent received increases of 81 per cent and 47 per cent, respectively. [The Times]
The tax affairs of every Briton with an HSBC
bank account in Jersey are being examined by Revenue & Customs
after a whistleblower leaked a list of names, addresses and account
balances. HMRC officials are trawling through a list of more than 4,000
people based in Britain after it was handed over this week. The list is
understood to include serious criminals and celebrities. [The Times]
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