London open: Italian political uncertainty dampens stocks
Market Movers
- techMARK 2,116.39 -0.31%
- FTSE 100 5,896.79 -0.30%
- FTSE 250 12,142.59 -0.37%
Political uncertainty in Italy and an economic contraction in Japan
weighed on stock markets on Monday morning, as investors shrugged off
some better-than-expected industrial production figures from China.
A close eye will be kept on Italian bond yields today after the weekend's news that Prime Minister Mario Monti
is to step down at the end of the year once the 2013 budget has been
passed. This follows last week's move by Silvio Berlusconi to withdraw
his party's (PDL) support for Monti's technocratic government.
"On top of this, Silvio Berlusconi, the man responsible for getting
Italy into the mess it was in 12 months ago, has decided to run for
office again," said market analyst Craig Erlam from Alpari. "At this
stage a Berlusconi victory appears very unlikely, however he may gather
some support with his plan to offer a vote on euro membership."
Japanese gross domestic product
(GDP) fell at a annual rate of 3.5% in the three months to the end of
September, in line with the preliminary reading. This follows the
revised 0.1% decrease in the second quarter. While the market was
expecting a contraction in the third quarter, the 3.5% rate of decline
was worse than the 3.3% fall pencilled.
Elsewhere, industrial production figures in China
were strong last month, rising at an annual rate of 10.1%, up from
October's 9.6% gain and the 9.8% increase expected. However, the
country's exports rose by less than forecast in November, by 2.9%
month-on-month (consensus estimate: +9%).
Markets were also
digesting the news that US President Barack Obama and House Speaker John
Boehner had an unscheduled face-to-face meeting yesterday to discuss
the 'fiscal cliff'. "Thus, investors will be hoping for an early
Christmas present this week in the form of announcement, which is backed
by tangible evidence, that US policy officials are close to agreeing a
deal to avoid the cliff," said financial trader Shavaz Dhalla.
"Despite the possibility of an early Christmas rally, courtesy of US
policy officials hopefully moving closer to agreeing a deal to avoid the
cliff, there is still a sombre mood hanging over the markets caused by
poor trade balance figures from China. This, partnered with data last
week showing poor industrial production figures from Germany as well as a
growth downgrade for 2013, is a clear sign that the global economy is
still struggling with the impact of the recent financial crisis," he
said.
FTSE 100: ENRC and Rolls-Royce provide a drag
Mining titan Eurasian Natural Resources Corporation (ENRC),
fell after saying that it is to buy the remaining 49.5% stake in
Democratic Republic of the Congo (DRC) focused group Camrose Resources
for $550m. The acquisition is an attempt to simplify its organisational
structure and consolidate its position within the DRC.
Power systems group Rolls-Royce
was still under pressure after Thursday's news that it was under
investigation by the Serious Fraud Office (SFO) after matters of bribery
and corruption involving so-called "intermediaries" were discovered in
Indonesia and China.
According to media reports this weekend,
Rolls-Royce has been accused of giving $20m and a new car to the son of
the former Indonesian President to help the company win an engine
contract.
Advertising and media giant WPP was under the
weather this morning after Deutsche Bank lowered its rating for the
stock to 'hold' and cut its target for the share from 945p to 930p.
FTSE 250: Greggs hit by CEO departure
Ken McMeikan, the Chief Executive Officer of bakery and hot snacks retailer Greggs,
is to leave the company for catering firm Brakes Group. Shares fell
early on after the CEO of four years said that he would leave as soon as
a successor could be found. Shore Capital cut its recommendation for
the shares to 'hold' this morning.
Oil and gas group Salamander Energy gained after has announcing that it has started drilling at its Bontang project in the North Kutei basin in Indonesia.
Irn-Bru maker AG Barr was
flat after posting a 9% increase in revenue in the 18 weeks to the
start of December and says it remains confident of delivering on
full-year expectations. Numis downgraded its rating on the stock this
morning to 'hold'.
FTSE 100 - Risers
Tate & Lyle (TATE) 763.50p +0.59%
GlaxoSmithKline (GSK) 1,356.50p +0.56%
Associated British Foods (ABF) 1,491.00p +0.40%
Reckitt Benckiser Group (RB.) 3,973.00p +0.28%
Rio Tinto (RIO) 3,264.50p +0.26%
Royal Dutch Shell 'B' (RDSB) 2,169.00p +0.25%
Petrofac Ltd. (PFC) 1,690.00p +0.24%
Burberry Group (BRBY) 1,308.00p +0.23%
Severn Trent (SVT) 1,553.00p +0.19%
Royal Dutch Shell 'A' (RDSA) 2,095.00p +0.12%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 879.00p -1.95%
Eurasian Natural Resources Corp. (ENRC) 277.70p -1.87%
Aviva (AV.) 359.80p -1.77%
Admiral Group (ADM) 1,110.00p -1.77%
Evraz (EVR) 239.00p -1.40%
Aggreko (AGK) 2,214.00p -1.34%
WPP (WPP) 858.50p -1.27%
Weir Group (WEIR) 1,813.00p -1.20%
Melrose Industries (MRO) 221.80p -1.03%
Fresnillo (FRES) 1,949.00p -1.02%
FTSE 250 - Risers
Ruspetro (RPO) 85.95p +3.06%
Grainger (GRI) 114.90p +1.68%
Daejan Holdings (DJAN) 2,975.00p +1.54%
Raven Russia Ltd (RUS) 62.65p +1.46%
BH Macro Ltd. GBP Shares (BHMG) 1,950.00p +1.35%
Halfords Group (HFD) 342.80p +1.30%
Centamin (DI) (CEY) 50.50p +1.10%
Stobart Group Ltd. (STOB) 98.00p +1.03%
Interserve (IRV) 362.70p +0.97%
COLT Group SA (COLT) 101.70p +0.89%
FTSE 250 - Fallers
AZ Electronic Materials SA (DI) (AZEM) 365.50p -3.89%
Greggs (GRG) 472.00p -2.98%
KCOM Group (KCOM) 69.20p -2.74%
Perform Group (PER) 370.50p -2.50%
Betfair Group (BET) 739.00p -2.38%
Hochschild Mining (HOC) 464.20p -2.27%
Dunelm Group (DNLM) 631.00p -1.94%
Sports Direct International (SPD) 391.30p -1.93%
RPS Group (RPS) 208.00p -1.89%
UK Event Calendar
Monday December 10
INTERIMS
Angel Biotechnology Holdings, Polar Capital Technology Trust
INTERIM DIVIDEND PAYMENT DATE
Nippon Telegraph & Telephone Corp.
QUARTERLY PAYMENT DATE
Canaccord Financial Inc., IBM Corp., Lilly (Eli) & Co
QUARTERLY EX-DIVIDEND DATE
Canadian General Investments Ltd.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (GER) (07:00)
Current Account (GER) (07:00)
Factory Orders (GER) (11:00)
Harmonised Competitiveness Indicators (EU) (09:00)
Retail Price Index (GER) (07:00)
Q3
Integra Group GDR (Reg S)
GMS
Fastnet Oil & Gas, Ram Active Media
FINALS
Alternative Networks, Andor Technology, Interbulk Group, Treatt
IMSS
Barr (A.G.)
SPECIAL DIVIDEND PAYMENT DATE
Renaissance Russia Infrastructure Equities Ltd
SPECIAL EX-DIVIDEND PAYMENT DATE
Wolseley
EGMS
Alcentra Euorpean Floating Rate Income Fund Ltd Red Ord Shs
AGMS
Baobab Resources, Starvest
| Europe Market Report |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Europe open: Italian political manouvering dents periphery stocks
-Italian 10 year bond yields up 27 basis points to 4.8 per cent
FTSE-100: -0.14%
Dax-30: -0.38%
Cac-40: -0.49%
FTSE Mibtel 30: -2.33%
Ibex 35: -2.15%
Stoxx 600; -0.36%
For the most part the main European equity benchmarks began the week
with small losses, following some mixed economic reports out over the
weekend and this morning in China.
On the periphery however it
was a whole other matter, following Italian Prime Minister Mario
Monti's unexpected announcement that he will hand in his resignation at
year's end. That came after Silvio Berlusconi's party's– which has lost a
large part of its following - decision to withdraw support from the
government last week, he said, which means that the next elections will
have to be brought forward slightly.
While it may just be a
case of political manouvering, even analysts who believe that stability
will eventually be restored are warning that: "Overall, Italy should be
very careful not to erode the credibility capital accumulated by PM
Monti's government so far."
On a more positive note, speaking
to The Wall Street Journal the head of the country's largest political
formation, Pier Luigi Bersani, indicated that he would honour all of the
commitments made by his predecessor, should he win. That may assuage
worries of the reform-friendliness of any centre-left government or
coalition that might coalesce.
Greece extended the deadline
for its debt buy-back offer until tomorrow, so as to allow the country's
banks time to make up for a small short-fall in the amount of debt
offered. The government however is expected to be successful in its bid
to lower the country's debt load by repurchasing the now cheaper debt on
the secondary market. In turn, that will open the way for the
Mediterranean nation to receive the next tranche of aid from its
international lenders.
Meantime, and in Spain, reports
indicate that the main business lobby –CEOE- shifted its support in
favour of the Prime Minister's cautiousness on formally asking the
European Central Bank (ECB) for aid in lowering the country's financing
costs. It is worried that in exchange for their help European
governments may ask for an excessively rapid decline in borrowing.
ST Microelectronics moves sharply higher
Chip-marker ST Microelectronic's shares were climbing after saying it will exit its joint venture with Ericsson AB.
RWE dropped, weighed down by a downgrade out of analysts at Bank of America.
From a sector stand-point the worst performance was to be seen in
shares of the following groups of companies: Banks (-1.58%), Insurance
(-1.18%) and Construction&Materials (-0.76%).
Larger than expected decline in French and Italian production
Italian industrial production contracted at a 1.1% month-on-month pace in October (Consensus: -0.3%).
French manufacturing output declined by 0.9% in October (Consensus: 0.2%).
The Eurozone Sentix index of investor confidence dropped to -16.8 in
December (Consensus: -16.9), after a reading of -18.8 in the month
before.
Germany's trade balance improved to €15.8bn in October (Consensus: €15.5bn). Small drop in single currency
The euro/dollar is now off by 0.15% to the 1.2907 dollar mark.
Front month Brent crude futures are rising by 0.53 dollars to the 107.59 dollar mark on the ICE. |
| US Market Report |
US close: Jobs data provides a boost, but Apple drags Nasdaq lower
The
Dow and S&P 500 finished Friday's session with moderate gains after
a better-than-expected US jobs report, though the Nasdaq was dragged
lower by tech giant Apple.
The closely-watched US employment report
provided a boost to markets across the globe after non-farm payrolls
rose by 146,000 in November, versus the 85,000 expected by the
consensus. Meanwhile, the unemployment rate dropped from 7.9% to 7.7%
over the month, compared with forecasts for no change.
Markets were expecting a lesser rise in payrolls as a number of headwinds – most specifically Hurricane Sandy
– were predicted to have distorted the headline figure. Therefore, the
mood was cautious as the superstorm was said to have had little impact
on the data.
"It was claimed that Sandy had no effect on the
figure, which rather than being taken as a positive, suggests that there
will be major revisions lower in the coming months," said market
analyst Craig Erlam from Alpari.
However, gains were limited after the University of Michigan consumer confidence index (released at 14:55) dropping from 82.7 to 74.5 in December, much worse than the expected fall to 82.0.
Financials on the up; Apple falls
Banking peers JPMorgan Chase & Co and Bank of America were high risers on the Dow after the better-than-expected jobs data. Meanwhile, insurance group AIG was in demand as it announced that it would offload a big chunk of its plane-leasing division.
Tech giant Apple was providing a drag on the Nasdaq, falling 2.6% as it registered its worst weekly performance since May 2010.
Freeport-McMoRan Copper & Gold was in demand after Oracle Investment upgraded the stock from 'buy' to 'strong buy'.
Retailing giant Macy's pleased investors after its board raised its share buy-back.
S&P 500 - Risers
Sears Holdings Corp. (SHLD) $42.96 +6.73%
Avon Products Inc. (AVP) $14.62 +5.33%
McGraw-Hill Companies Inc. (MHP) $56.53 +4.16%
Alpha Natural Res (ANR) $8.29 +3.50%
Citrix Systems Inc. (CTXS) $62.03 +3.30%
Owens-Illinois Inc. (OI) $19.81 +3.23%
Newfield Exploration Co (NFX) $25.79 +3.16%
Genworth Financial Inc. (GNW) $6.61 +3.12%
Aetna Inc. (AET) $44.71 +2.95%
Freeport-McMoRan Copper & Gold Inc. (FCX) $31.70 +2.89%
S&P 500 - Fallers
Big Lots Inc. (BIG) $28.18 -5.72%
Best Buy Co. Inc. (BBY) $11.99 -2.99%
First Solar Inc. (FSLR) $29.91 -2.64%
Apple Inc. (AAPL) $533.25 -2.56%
CenturyLink Inc. (CTL) $37.94 -2.29%
Alexion Pharmaceuticals Inc. (ALXN) $91.50 -2.23%
Fidelity National Information Services Inc. (FIS) $36.16 -2.19%
Noble Corp (NE) $34.85 -1.94%
TripAdvisor Inc. (TRIP) $38.59 -1.78%
AvalonBay Communities Inc. (AVB) $133.68 -1.69%
Dow Jones I.A - Risers
JP Morgan Chase & Co. (JPM) $42.56 +2.63%
Bank of America Corp. (BAC) $10.64 +1.72%
Caterpillar Inc. (CAT) $86.99 +1.21%
International Business Machines Corp. (IBM) $191.95 +1.19%
Wal-Mart Stores Inc. (WMT) $72.29 +0.98%
Boeing Co. (BA) $74.64 +0.89%
Coca-Cola Co. (KO) $37.71 +0.88%
American Express Co. (AXP) $56.61 +0.87%
Hewlett-Packard Co. (HPQ) $13.94 +0.80%
E.I. du Pont de Nemours and Co. (DD) $43.18 +0.72%
Dow Jones I.A - Fallers
Microsoft Corp. (MSFT) $26.45 -1.01%
Alcoa Inc. (AA) $8.50 -0.82%
Cisco Systems Inc. (CSCO) $19.33 -0.74%
Pfizer Inc. (PFE) $25.56 -0.20%
Verizon Communications Inc. (VZ) $44.41 -0.09%
Intel Corp. (INTC) $20.16 -0.02%
Nasdaq 100 - Risers
Sears Holdings Corp. (SHLD) $42.96 +6.73%
Citrix Systems Inc. (CTXS) $62.03 +3.30%
Check Point Software Technologies Ltd. (CHKP) $46.33 +2.86%
Broadcom Corp. (BRCM) $34.23 +2.61%
Sandisk Corp. (SNDK) $42.25 +2.25%
Viacom Inc. Class B (VIAB) $53.55 +1.98%
Monster Beverage Corp (MNST) $52.78 +1.79%
NetApp Inc. (NTAP) $33.42 +1.53%
Altera Corp. (ALTR) $31.58 +1.35%
PACCAR Inc. (PCAR) $43.84 +1.27%
Nasdaq 100 - Fallers
Apple Inc. (AAPL) $533.25 -2.56%
Avago Technologies Ltd. (AVGO) $34.25 -2.48%
Alexion Pharmaceuticals Inc. (ALXN) $91.50 -2.23%
Dollar Tree Stores Inc. (DLTR) $39.82 -1.42%
Apollo Group Inc. (APOL) $20.17 -1.32%
Sirius Satellite Radio Inc. (SIRI) $2.76 -1.25%
Wynn Resorts Ltd. (WYNN) $110.26 -1.07%
Microsoft Corp. (MSFT) $26.45 -1.01%
Google Inc. (GOOG) $684.21 -1.00%
Warner Chilcott Plc (WCRX) $11.13 -0.98% |
| FX and Commodities round-up |
FX round-up: Dollar firms after US payrolls data
The dollar gathered pace against the euro on Friday as investors read over a mixed bag of US economic data.
The closely watched US employment report gave an early boost to
sentiment after non-farm payrolls rose by 146,000 in November compared
to expectations of 85,000. Meanwhile the unemployment rate rose to 7.9%
to 7.7% over the month.
However the University of Michigan
consumer confidence index dampened market sentiment later in the session
after it fell from 82.7 to a much worse than expected 74.5 in December.
The ICE dollar index, which measures the greenback against a
basket of six major currencies, advanced to 80.408 compared to 80.251 on
Thursday. Over the week the index was up 0.3%.
The euro changed hands at $1.2933 from $1.2967 the previous session Thursday. Over the week it was down 0.4%.
The single currency was weighed down by the German Bundesbank's
reduction of its 2013 forecast for the German economy, sparking concern
about growth in Europe's largest economy.
Against the yen, traded at ¥82.44 from ¥82.38 on Thursday following an earthquake in the northeast coast of Japan.
Sterling bought $1.6042 from $1.6054 before. The pound showed little
reaction to UK data showing factory output in October fell at the
sharpest rate since June.
Commodities: Crude falls for fourth straight day
Crude
oil futures fell for the fourth day running on Friday as investors
worried about a glut in supplies and the weak demand outlook.
Crude for January delivery fell 33 cents to settle at $85.93 a barrel on the New York Mercantile Exchange.
Earlier in the week government weekly data showed gasoline stockpiles
rose the most in 11 years. Crude supplies fell but distillates also
rose.
Investors also mulled the day's economic data for the
latest snapshot of the US economy. Figures from the Labor Department
said the US added a stronger than expected 146,000 jobs last month. The
unemployment rate declined to 7.7% from 7.9%.
However
disappointing consumer confidence data pressured oil prices. The
preliminary University of Michigan-Thomson Reuters consumer sentiment
index slipped to 74.5 in December from 82.7 the month before.
Meanwhile over on the ICE futures exchange, Brent crude settled one cent lower at $107.02 a barrel.
It was a good day for gold futures which pushed higher on Friday as investors digested the mixed US economic data.
Gold for February delivery gained $3.70 to settle at $1,705.50 an ounce
on the Comex division of the New York Mercantile Exchange.
Silver for March delivery bulked up 2 cents to $33.13 an ounce Friday.
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