Stocks rise ahead of Osborne's Autumn Statement
Market Movers
techMARK 2,115.34 +0.34%
FTSE 100 5,899.85 +0.53%
FTSE 250 12,118.45 +0.54%
Equity markets rose on Wednesday morning after strong gains for Asian markets overnight with the focus in the UK turning to George Osborne ahead of his budget statement.
"In a week dominated by Europe and the on-going to-ing and fro-ing in
the US with respect to the fiscal cliff, markets will be turning their
attention to the tribulations of the UK economy today when the
Chancellor of the Exchequer stands up to give the annual Autumn
Statement," said market analyst Michael Hewson from CMC Markets.
Whitehall departments will be asked to cut day-to-day spending by 1% -
around £950m - in 2013/14 and 2% - about £2.5bn - in 2014/15. Most of
these savings will come from cuts to back office functions, a government
spokesman said.
Osborne will also update Parliament on the
nation's finances, with expectations high that figures from Office for
Budget Responsibility will show growth forecasts pared back.
Stocks were also tracking Asian markets higher as sentiment was lifted by increasing optimism about China.
Markus Huber, the head of German HNW trading at ETX Capital, said:
"Recent changes having taken place in Chinese politics have not only
removed a lot of uncertainty in regard where China and the Chinese
economy will be heading in the years to come, but traders are also
increasingly optimistic that the change in political leadership will be
leading to a sharp increase in ‘urbanisation’ which should lead to an
increase in consumption and investment and consequently provide a strong
boost to the economy as a whole."
FTSE 100: Investors celebrate Tesco's plans for US division
Supermarket titan Tesco
was a high riser after announcing that it is considering a sale of its
loss-making US division, Fresh & Easy, as it revealed that the
frontman of the unit, Tim Mason, will leave the company after 30 years'
service.
To accompany the group's third-quarter trading
statement, in which it revealed a decline in like-for-like (LFL) sales
in the domestic UK market, Tesco Chief Executive Officer Philip Clarke
said that he would be conducting a strategic review of Fresh & Easy.
Mining peers Vedanta, ENRC, Kazakhmys, Anglo American, Antofagasta, Rio Tinto and BHP Billiton
were on the rise in spite of economic figures from China showing that
the services sector slowed down in November. While the HSBC China
services PMI fell from 53.5 to 52.1 last month, November marked the
first simultaneous increase in levels of activity in both the
manufacturing and service sectors since July.
Precious metals giant Polymetal also gained after saying it was giving $191m dollars back to shareholders by way of a special dividend.
Global banking giant HSBC
was higher after saying that it is to receive $9.39bn from the sale of
its 15.57% stake in Chinese insurance giant Ping An Insurance.
Accountancy software group Sage
fell after reporting that it had grown revenues slightly over the past
year but was keeping a close eye on conditions in Europe, particularly
France.
Leading the fallers on the Footsie were Aberdeen Asset Management, SABMiller and Severn Trent after going ex-dividend.
FTSE 250: Petropavlovsk and Stagecoach provide a lift
Petropavlovsk
has said that on Tuesday it signed a share purchase agreement for the
transfer of 65% of its issued shares in Omchak to Susumanzoloto in four
tranches for $21.65m.
Public transport firm Stagecoach
was wanted after saying that like-for-like revenue grew 5.9% in the half
year to October and revenue growth in the second half is expected to be
"relatively modest".
Online gaining firm Bwin.party rose after saying that Jim Ryan, its co-CEO, is to retire from the role in January and return to Canada with his family.
Wealth management firm Brewin Dolphin gained after reporting growth in funds under management after equity markets remained "surprisingly resilient".
Student accommodation group UNITE edged higher after hitting its disposal targets for 2012 after completing the sale of two assets in London and Glasgow.
| AIM/Small Cap Report |
FTSE 100 - Risers
Vedanta Resources (VED) 1,107.00p +3.85%
Anglo American (AAL) 1,800.50p +3.66%
Eurasian Natural Resources Corp. (ENRC) 279.50p +3.29%
Tesco (TSCO) 336.90p +3.14%
Kazakhmys (KAZ) 736.00p +3.08%
Rio Tinto (RIO) 3,223.50p +2.97%
Evraz (EVR) 239.60p +2.83%
BHP Billiton (BLT) 1,998.50p +2.41%
Polymetal International (POLY) 1,075.00p +2.38%
Antofagasta (ANTO) 1,306.00p +2.11%
FTSE 100 - Fallers
Severn Trent (SVT) 1,590.00p -1.43%
Associated British Foods (ABF) 1,470.00p -1.08%
SABMiller (SAB) 2,797.50p -0.80%
Aberdeen Asset Management (ADN) 335.60p -0.71%
British American Tobacco (BATS) 3,297.50p -0.65%
Land Securities Group (LAND) 811.50p -0.61%
Kingfisher (KGF) 272.70p -0.44%
Standard Life (SL.) 323.50p -0.28%
Sage Group (SGE) 310.40p -0.26%
Imperial Tobacco Group (IMT) 2,529.00p -0.20%
FTSE 250 - Risers
Home Retail Group (HOME) 121.10p +6.88%
Ruspetro (RPO) 86.65p +4.97%
JD Sports Fashion (JD.) 724.50p +4.24%
Ophir Energy (OPHR) 519.00p +3.18%
EnQuest (ENQ) 116.50p +3.10%
NMC Health (NMC) 180.00p +2.86%
New World Resources A Shares (NWR) 273.00p +2.82%
Ocado Group (OCDO) 72.95p +2.75%
Stagecoach Group (SGC) 299.30p +2.64%
Kenmare Resources (KMR) 30.66p +2.34%
FTSE 250 - Fallers
Centamin (DI) (CEY) 55.05p -3.59%
Britvic (BVIC) 391.20p -2.20%
Cranswick (CWK) 769.00p -1.85%
PayPoint (PAY) 845.00p -1.74%
Brown (N.) Group (BWNG) 364.50p -1.70%
Halfords Group (HFD) 333.50p -1.42%
Big Yellow Group (BYG) 341.40p -1.33%
De La Rue (DLAR) 957.50p -1.24%
Shanks Group (SKS) 78.55p -1.20%
Electrocomponents (ECM) 205.30p -1.16%
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INTERIMS
First Property Group, Stagecoach Group
INTERIM EX-DIVIDEND DATE
Alliance Pharma, Atkins (WS), Big Yellow Group, Brown (N.) Group, Cello
Group, Chamberlin, City of London Group, Cranswick, Creston, De La Rue,
Dee Valley Group, Dee Valley Group (Non-Voting), Edge Performance VCT
'C' Shares, Electrocomponents, Energy Technique, Establishment Inv
Trust, European Residual Income Investments Cell, Fuller Smith &
Turner, Headlam Group, Hogg Robinson Group, Homeserve, London Stock
Exchange Group, Majestic Wine, Management Consulting Group, MDM
Engineering Group Ltd. (DI), Norcros, Northern 3 VCT, PayPoint, Phoenix
IT Group, Plastics Capital, Rensburg AIM VCT, SABMiller, Severn Trent,
Shanks Group, Slingsby H.C, Tarsus Group, TR Property Inv Trust, TR
Property Inv Trust Sigma Shares, UK Mail Group , Value and Income Trust,
Victoria, VP
QUARTERLY EX-DIVIDEND DATE
Bank of America Corp., Land Securities Group, Real Estate Credit Investments PCC Ltd
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
ABC Consumer Confidence (US) (22:00)
Crude Oil Inventories (US) (15:30)
Goods Orders (US) (15:00)
ISM Non-Manufacturing (US) (15:00)
ISM Services (US) (15:00)
MBA Mortgage Applications (US) (12:00)
PMI Composite (EU) (09:00)
PMI Composite (GER) (08:55)
PMI Services (EU) (09:00)
Retail Sales (EU) (10:00)
FINALS
Brewin Dolphin Holdings, Innovation Group, Jelf Group, Sage Group, Silverdell
ANNUAL REPORT
Grainger
SPECIAL EX-DIVIDEND PAYMENT DATE
British Empire Securities & General Trust, Carnival, Renaissance
Russia Infrastructure Equities Ltd, Rights & Issues Inv Trust
Capital Shares, Wolseley
EGMS
Ablon Group Ltd., Middlefield Canadian Income PCC
AGMS
Asia Digital Holdings, International Biotech Trust, K3 Business Technology Group
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (12:00)
BRC Shop Price Index (00:01)
Official Reserves (09:30)
PMI Services (09:30)
FINAL DIVIDEND PAYMENT DATE
Regenersis
FINAL EX-DIVIDEND DATE
Aberdeen Asset Management, Associated British Foods, British Empire
Securities & General Trust, Conygar Investment Company, CVS Group,
Debenhams, Grainger, Greencore Group, Local Shopping REIT, Northamber,
Renewable Energy Generation Ltd., YouGov
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| US Market Report |
Wall
Street finished with moderate losses on Tuesday as politicians continue
to disagree over ways to tackle the 'fiscal cliff'.
In a letter to President Barack Obama, House Speaker John Boehner
presented a deficit-reduction proposal that included $1.4tn in spending
cuts and $800bn in new revenue. However, the plan was rejected by the
Obama administration as it didn't include higher tax rates for top
earners.
Meanwhile, speaking today to Bloomberg TV, Obama said that the Republican plan wouldn't raise the revenue needed to reduce the deficit by $4tn over the next decade.
“We’re going to have to have higher rates for the wealthiest [...] It’s just a matter of math," he said.
Brian Moynihan, the Chief
Executive Officer of Bank of America, said that uncertainty over
'cliff' is already affecting investments for 2013 as people are becoming
"more conservative".
In an interview with CNBC, he
said: "I think that's had an impact on what the growth will be in 2013.
And I think we're in danger if this thing begins to string out in 2013,
you may begin to have problems about what 2014 begins to look like"
Markets were also still digesting weak manufacturing figures which
dampened equities on Monday. The US Institute for Supply Management
(ISM) purchasing managers' index fell from 51.7 to 49.5 in November,
well below the 51.4 forecast. Any figure below 50 represents a
contraction.
Company movements
Online video streaming firm Netflix soared after signing a distribution agreement with Walt Disney from 2016.
Tech giant Apple
was under the weather after UBS said that "significant P/E expansion"
is unlikely for the stock, which is trading at 11.2 times earnings.
Analyst Steven Milunovich said: "The experience of Google and Microsoft
suggests that P/E expansion largely is over once margins peak and
earnings growth moderates […] Even bursts of faster revenue growth don’t
tend to boost the multiple.”
Baxter International fell after saying that it is to purchase Swedish group Gambro, which specialise in kidney dialysis products, for $4bn.
Discount retailer Big Lots jumped after posting lower-than-expected quarterly losses and lifting its full-year forecast.
S&P 500 - Risers
Netflix Inc. (NFLX) $86.65 +14.01%
Big Lots Inc. (BIG) $31.27 +11.52%
Apollo Group Inc. (APOL) $20.53 +7.71%
First Solar Inc. (FSLR) $29.61 +7.68%
Edwards Lifesciences Corp. (EW) $91.50 +5.76%
Hewlett-Packard Co. (HPQ) $13.53 +5.13%
Seagate Technology Plc (STX) $26.46 +4.34%
KLA-Tencor Corp. (KLAC) $47.19 +3.97%
Noble Corp (NE) $35.59 +3.91%
Cliffs Natural Resources Inc. (CLF) $29.40 +3.52%
S&P 500 - Fallers
Gap Inc. (GPS) $30.94 -10.34%
Darden Restaurants Inc. (DRI) $47.40 -9.58%
Metropcs Communications Inc. (PCS) $9.96 -7.52%
Best Buy Co. Inc. (BBY) $12.15 -5.96%
Pitney Bowes Inc. (PBI) $11.03 -5.24%
Advanced Micro Devices Inc. (AMD) $2.26 -4.24%
VF Corp. (VFC) $156.19 -3.02%
AutoZone Inc. (AZO) $366.80 -2.97%
Wynn Resorts Ltd. (WYNN) $110.12 -2.89%
Southwestern Energy Co. (SWN) $33.98 -2.86%
Dow Jones I.A - Risers
Hewlett-Packard Co. (HPQ) $13.53 +5.13%
Intel Corp. (INTC) $19.97 +2.20%
Bank of America Corp. (BAC) $9.91 +1.12%
Wal-Mart Stores Inc. (WMT) $72.12 +1.09%
Cisco Systems Inc. (CSCO) $19.17 +0.73%
United Technologies Corp. (UTX) $80.14 +0.43%
Mondelez International Inc. (MDLZ) $25.75 +0.31%
Johnson & Johnson (JNJ) $69.86 +0.30%
Pfizer Inc. (PFE) $25.17 +0.30%
E.I. du Pont de Nemours and Co. (DD) $42.48 +0.21%
Dow Jones I.A - Fallers
Home Depot Inc. (HD) $64.24 -1.14%
Verizon Communications Inc. (VZ) $43.67 -0.98%
Chevron Corp. (CVX) $103.96 -0.67%
AT&T Inc. (T) $33.92 -0.64%
Coca-Cola Co. (KO) $37.15 -0.62%
Travelers Company Inc. (TRV) $70.53 -0.59%
JP Morgan Chase & Co. (JPM) $40.57 -0.59%
Exxon Mobil Corp. (XOM) $87.19 -0.48%
Caterpillar Inc. (CAT) $84.16 -0.39%
Procter & Gamble Co. (PG) $69.31 -0.39%
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| Wednesday newspaper round-up |
George Osborne, Banking union, Philip Green...
George Osborne
will announce he is to raise taxes on banks for the fifth time today as
he sets out the need for deeper and longer-lasting spending cuts in a
bleak mini-budget. In an attempt to convince voters that he intends to
share the pain of austerity evenly, the Chancellor will risk accusations
of hypocrisy from the City by again turning to the
banking sector. Mr Osborne told Cabinet colleagues yesterday that he
was cutting most of their budgets heavily to help to find five billion
pounds for new schools, transport schemes and science funding. [ The Times]
Plans to create a eurozone Banking union
hit a brick wall on Tuesday after Germany’s influential finance
minister cautioned over moving too quickly, casting doubts over whether
the EU would seal a deal by the end of the year. The objections from
Wolfgang Schäuble come just a week before a summit of EU leaders and
raise the prospect of a significant delay to establishing a single
eurozone banking
supervisor, a reform billed as critical to rebuilding confidence in the
bloc’s shaky financial sector. Some of Mr Schäuble’s counterparts at a
gathering in Brussels warned that markets could be spooked by any sign
that the EU was backing away from consolidating banking oversight, just
five months after agreeing to pursue it. [ Financial Times]
Sir Philip Green
is close to selling a 25pc stake in Topshop and Topman to an American
private equity firm in a move that will generate a multi-million pound
windfall for the retail tycoon. The colourful billionaire is in advanced
talks to sell the stake in the high street chains to Leonard Green
& Partners for as much as £250m. A source close to the deal which is
not finalised but is expected to be announced tomorrow, said it would
give Sir Philip a powerful war chest to “buy, deal and expand around the
world”. The retailer, estimated to be worth £3bn, is driving an
ambitious international expansion programme in America and Asia. [ The Telegraph]
David Cameron is ready to give voters the chance of rejecting Britain’s
membership of the European Union in a landmark referendum. In his
gamble, Mr Cameron would urge the public to support a looser
relationship with Brussels that he hopes to negotiate over the coming
years. But he is ready to give the country the chance to say “no” to
such a deal, a result that would effectively be seen as a vote to quit
the EU, at least on the proposed terms. [ The Times]
Flour mills
have been forced to order the biggest wheat imports in more than 30
years after the spring weather hit British farmers' crops. The
Department for the Environment, Food and Rural Affairs said millers were
expected to import 2m tonnes of mostly German wheat to make up for a
13% shortfall in the homegrown crop. It will be the biggest wheat import
since 1980, and is expected to lead to a substantial increase in the
price of bread next year. [ The Guardian]
Warren Buffett’s Berkshire Hathaway
is claiming as much as $1bn in damages from Swiss Re, the reinsurer it
propped up during the financial crisis with an emergency capital
injection.
Swiss Re quietly disclosed in its 104-page earnings
report last month that Berkshire was making various allegations that the
reinsurer said were “without merit”. The dispute relates to losses
Berkshire has endured in its deal to provide what Swiss Re described as
retrocession –– in effect, reinsurance for reinsurance – to the
Zurich-based company’s US life and health arm. [ Financial Times]
Roman Abramovich,
the billionaire owner of Chelsea football club, is seeking to end a
four-year power struggle between two fellow Russian resources
heavyweights after agreeing to buy a $2bn (£1.2bn) stake in their
company Norilsk Nickel. Mr Abramovich is buying 7.3 per cent of the
world's largest nickel and palladium miner, in which he is expected to
play the role of a "white knight", acting as a buffer between the
Russian tycoons Vladimir Potanin and Oleg Deripaska, who each control
about a quarter of Norilsk Nickel. [ The Independent]
Britain's biggest travel company paid no UK corporation tax in its last
financial year despite posting record annual profits. Thomson and First
Choice operator Tui Travel hailed a “renaissance” of the package
holiday as it reported an 8 per cent leap in underlying pre-tax profits
to £390 million. Profits at its UK and Ireland division grew 32 per cent
to £197m as customers opted for its highly profitable range of “unique”
branded holidays. But its UK corporation tax bill was zero as a result
of losses incurred following a restructuring launched five years ago. It
said it would start paying tax again once those losses have been
carried forward and that it was paying the “right amount of corporation
tax” in the countries in which it operates.[ The Scotsman]
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