Footsie jumps one per cent as economic data impresses
Market Movers
techMARK 2,246.01 +0.71%
FTSE 100 6,264.91 +1.09%
FTSE 250 13,066.44 +1.02%
Better-than-expected economic data
lifted the FTSE 100 over one per cent higher on Thursday afternoon, as
markets shrugged off disappointing results from the world’s largest
technology company, Apple.
American jobless claims and a US manufacturing
survey from Markit came in better than forecasts today, sending
London’s benchmark index surge in afternoon trade. Meanwhile, the
Conference Board’s composite index of leading indicators increased by 0.5% in December, better than the +0.4% expected.
“All three releases have fuelled hopes for a strong recovery in the US
allied with growing optimism that US lawmakers do have the will to
agree on spending cuts and raise the debt ceiling without playing the
same game of brinkmanship they participated in before the end of 2012,”
said market strategist Ishaq Siddiqi from ETX Capital.
The S&P 500 in New York topped 1,500
following the news, the first time it has reached that level since
2007. The Dow also rose strongly, though the tech-heavy Nasdaq was being
weighed down by a 10% drop from iPhone maker Apple after both revenues and profits missed forecasts.
Better-than-expected economic figures from Europe and China
also lifted the mood today: the Chinese HSBC flash manufacturing
purchasing managers' index (PMI) rose from 51.5 to a two-year high of
51.9 in January (consensus: 51.7); meanwhile, the Eurozone composite PMI
increased from 47.2 to 48.2 in December (consensus: 47.5).
ETX Capital’s Siddiqi highlighted this afternoon that the FTSE 100 was
outperforming other European indices today. He said: “Traders are citing
rumours around tomorrow's Q4 GDP figures but it must be noted
that the FTSE100 did underperform its European peers in 2012 so
technically, there is plenty of room for upside. We are likely to see
the index catch up with European peers through this year, especially if
we continue to see more encouraging signs from China, the world's
biggest consumer of commodities.”
Consensus forecasts are for a 0.1% quarter-on-quarter contraction in the UK economy in the fourth quarter of 2012, compared with the 0.9% growth seen in the third.
FTSE 100: CRH gains on US exposure
Building materials group CRH
surged this afternoon on the back of the strong data from the US. The
company is highly exposed to the US economy, with just under 50% of its
first-half sales coming from the Americas region.
International Consolidated Airlines Group
(known as IAG) was up following reports yesterday that it may ask its
Spanish airline Iberia to stay firm on a tough cost-cutting programme.
According to Spanish daily El Economista, IAG will provide a framework
for Iberia to stay on course in a board meeting scheduled for Thursday.
Utilities stocks were also providing a lift today after a series of broker upgrades. HSBC upped its rating for Centrica to 'overweight', while Bank of America Merrill Lynch raised its recommendation for both Severn Trent and United Utilities to 'neutral'.
Polymetal International rose
on news it has completed the acquisition of 100 per cent of Olymp, a
Russian legal entity holding the mining and exploration licence for the
Olcha gold-silver deposit. The mining sector on the whole was performing
well after the strong manufacturing figures from China. However, ENRC bucked the trend after it was reported yesterday that the group approached several banks to refinance an existing loan.
| AIM/Small Cap Report |
FTSE 250: Gambling firms gain after Opap development
Sports betting groups bwin.party and Ladbrokes
were in demand after peer Opap’s gambling monopoly was ruled illegal by
the European Court of Justice. Ladbrokes also impressed with its
acquisition of Global Betting Exchange Alderney (GBEA) for €30m, which
will see it get its hands on the Betdaq exchange, accelerating the
firm's strategy to grow digital revenues through technology investment.
Defence tech group Chemring
was on the rise after presenting its full-year results. While the
company recorded a sharp drop in profits, they were in line with
expectations which 'counts as a positive given the recent history',
according to analysts at Investec.
Transport firm FirstGroup
rose after it said third quarter trading at the group, excluding the
one-off effect of Hurricane Sandy, was in line with company
expectations.
Budget airline easyJet was flying high
after total revenue jumped 9.2% to £833m in the first quarter. CEO
Carolyn McCall said: "easyJet has made a strong start to the year due to
a combination of management action, competitor capacity reductions and
the benign operating environment."
Drinks group A.G. Barr rose after saying that sales in the final quarter of the year are expected to rise 5%, with full-year sales up 7%.
Interdealer broker ICAP
fell after it confirmed that one of its subsidiaries has become subject
to an Financial Services Authority (FSA) investigation, but refused to
make any further comment, saying that it is 'confidential'.
FTSE 100 - Risers
CRH (CRH) 1,342.00p +5.34%
International Consolidated Airlines Group SA (CDI) (IAG) 218.40p +4.85%
United Utilities Group (UU.) 747.50p +4.18%
Croda International (CRDA) 2,437.00p +3.35%
Vodafone Group (VOD) 168.65p +3.18%
Wolseley (WOS) 2,983.00p +3.00%
Polymetal International (POLY) 1,090.00p +2.93%
Lloyds Banking Group (LLOY) 53.48p +2.81%
Aberdeen Asset Management (ADN) 405.50p +2.27%
ARM Holdings (ARM) 867.50p +2.12%
FTSE 100 - Fallers
Aggreko (AGK) 1,761.00p -3.19%
Wood Group (John) (WG.) 824.50p -1.32%
Morrison (Wm) Supermarkets (MRW) 257.00p -0.85%
Capita (CPI) 793.00p -0.81%
British Sky Broadcasting Group (BSY) 794.00p -0.75%
Melrose Industries (MRO) 241.70p -0.74%
Evraz (EVR) 306.90p -0.65%
BT Group (BT.A) 249.20p -0.60%
Eurasian Natural Resources Corp. (ENRC) 339.20p -0.56%
Smiths Group (SMIN) 1,229.00p -0.41%
FTSE 250 - Risers
Bwin.party Digital Entertainment (BPTY) 113.80p +12.34%
London & Stamford Property (LSP) 117.10p +6.45%
FirstGroup (FGP) 203.80p +6.15%
Heritage Oil (HOIL) 206.50p +6.06%
ITE Group (ITE) 273.40p +5.40%
Chemring Group (CHG) 296.90p +5.10%
Barr (A.G.) (BAG) 546.50p +5.10%
easyJet (EZJ) 898.50p +5.09%
Euromoney Institutional Investor (ERM) 951.50p +4.45%
Britvic (BVIC) 446.80p +3.88%
FTSE 250 - Fallers
Laird (LRD) 223.40p -3.54%
Betfair Group (BET) 668.00p -2.27%
Imagination Technologies Group (IMG) 457.10p -1.51%
Alent (ALNT) 331.00p -1.40%
Carpetright (CPR) 660.50p -1.27%
Kenmare Resources (KMR) 33.92p -1.25%
Enterprise Inns (ETI) 95.00p -1.04%
Hochschild Mining (HOC) 438.60p -1.04%
Polar Capital Technology Trust (PCT) 377.10p -1.02%
Bumi (BUMI) 334.00p -1.01%
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| UK Calendar |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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European Markets Climbed On Economic Data
The European markets
finished Thursday's session in positive territory. Positive Chinese
manufacturing data helped to overshadow some of the weakness caused by
the disappointing earnings report from Apple in the United States. The
Euro area private sector activity result also lifted hopes for a modest
recovery in the region.
China's manufacturing sector activity
rose to its highest level in two years in January as factory production
picked up momentum, preliminary results of a survey by Markit Economics
showed Thursday. The headline HSBC/Markit purchasing managers' index rose to 51.9 in January from 51.5 in December.
The
marked improvement in Eurozone consumer confidence, as latest data
showed, adds to hopes that the region's economy could at least stabilize
in the first quarter, following an almost certain third successive
quarter of contraction in the fourth quarter, IHS Global Insight Chief
European and UK Economist Howard Archer said Thursday.
IHS Global
Insight noted that the appreciable improvement in sentiment shows that
Eurozone consumers are starting to become more upbeat about the economic
outlook, although they still clearly have serious concerns over jobs.
The
upturn adds to the evidence that the economic environment in the
single-currency bloc has improved, and growth prospects are brightening
following recent policy initiatives that have resulted in a substantial
easing in sovereign debt tensions, the firm noted.
Bank of Canada Governor Mark Carney,
next chief of the Bank of England said the governor should not
overshadow the decisions of the central bank. At a press conference,
Carney said he aims to ensure that the policy decisions do not rely too
much on any particular individual.
"Part of my responsibility
when I am there is that as the Bank of England gets additional
responsibilities on the micro and macro prudential side, to ensure that
the committee structure, the new governance structure, the other
aspects, work to their full effect," he said.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.49 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.17 percent.
The DAX of Germany climbed by 0.53 percent and the CAC 40 of France advanced by 0.70 percent. The FTSE 100 of the U.K. rose by 1.09 percent and the SMI of Switzerland gained 0.89 percent.
In Frankfurt, Commerzbank rose
by 1.41 percent. The lender said it plans to slash 4000 to 6000 jobs at
the Group level until 2016, with the exact amount of the reduction to
be known after talks with the employee representatives.
BMW Group
increased by 0.39 percent. The company announced a long-term
collaboration agreement with Toyota Motor Corp. for the joint
development of a fuel-cell system, architecture and components for a
sport vehicle, and other technologies.
In Paris, Technip climbed
by 0.49 percent. The company won a contract for a 1.25 million tons per
year latest-generation purified terephthalic acid or PTA unit, to be
located in the Special Economic Zone in Mangalore, India.
CGG Veritas dropped by 2.02 percent, after Goldman Sachs downgraded the stock to "Sell" from "Neutral."
LVMH Moët Hennessy Louis Vuitton rose by 0.87 percent, after JP Morgan increased its price target on the stock.
In London, HSBC Holdings
is moving finished with a gain of 1.41 percent. Its wholly-owned
subsidiary HSBC Bank Plc entered into an agreement to sell its 73
percent shareholding in its mutual fund business in Greece.
Pearson climbed by 1.63 percent, after Barclays upgraded its rating on the stock to "Equal weight" from "Underweight."
Rio Tinto gained 2.11 percent, after Citigroup added the stock to its Focus List Europe.
Mining stocks were positive, due to the positive Chinese manufacturing data. Anglo American increased by 1.36 percent, Antofagasta added 0.47 percent and BHP Billiton gained 1.35 percent.
Novartis shares
finished higher by 0.08 percent in Zurich. The U.S. Food and Drug
Administration approved its drug Exjade to treat patients aged 10 years
and older who have chronic iron overload resulting from a genetic blood
disorder called non-transfusion-dependent thalassemia.
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| US Market Report |
Strength On Wall Street Lifts S&P 500 Above 1,500
Stocks are
extending a recent upward move during trading on Thursday, with the
S&P 500 climbing above 1,500 for the first time in over five years.
However, a sharp drop by shares of Apple (AAPL) has helped to keep the
tech-heavy Nasdaq in the red.
The major averages currently continue to turn in a mixed performance, with the Nasdaq posting a modest loss. While the Nasdaq is down 2.69 points or 0.1 percent at 3,150.98, the Dow is up 85.43 points or 0.6 percent at 13,864.76 and the S&P 500 is up 5.68 points or 0.4 percent at 1,500.49.
The modest loss being posted by the Nasdaq is due in large part to the steep loss being posted by Apple, with the iPad and iPhone maker down by 10.4 percent after reporting disappointing quarterly results.
After
the close of trading on Wednesday, Apple reported better than expected
first quarter earnings but on weaker than expected sales. The company
also reported iPhone sales that missed expectations and provided
disappointing second quarter revenue guidance.
Meanwhile, most stocks have
moved to the upside on the heels of the release of a report from the
Labor Department showing that initial jobless claims unexpectedly fell
to a new five-year low in the week ended January 19th.
The report showed that initial jobless claims dipped
to 330,000, a decrease of 5,000 from the previous week's unrevised
figure of 335,000. The drop surprised economists, who had expected
jobless claims to climb to 355,000.
With the unexpected decrease,
jobless claims fell to their lowest level since hitting 318,000 in the
week ended January 19, 2008.
While the Labor Department said
seasonal distortions are likely still in effect, Jennifer Lee, senior
economist at BMO Capital, said the news on the job front is encouraging
"even when you remove all of the noise."
Additionally, shares of Netflix (NFLX)
have moved sharply on the day after the online video service provider
reported an unexpected fourth quarter profit. Netflix is currently up by
38.7 percent.
Xerox (XRX), United Continental (UAL), and Bristol-Myers Squibb (BMY) are also posting notable gains after reporting their quarterly results before the start of today's trading.
Sector News
Trucking stocks
have shown a particularly strong move to the upside over the course of
the trading day, resulting in a 3.6 percent gain by the Dow Jones
Trucking Index. With the gain, the index has reached its best intraday
level in well over a year.
Con-way (CNW), Arkansas Best (ABFS), and Knight Transportation (KNX) are turning in some of the trucking sector's best performances.
With
Netflix helping to lead the way higher, considerable strength has also
emerged among internet stocks. Reflecting the strength in the internet
sector, the NYSE Arca Internet Index has jumped 2.5 percent to a
twelve-year high.
Retail stocks are also seeing
significant strength in mid-day trading, as reflected by the 1.5 percent
gain being posted by the Dow Jones Retail Index. Kohl's (KSS) and Limited Brands (LTD) are posting notable gains on the day.
healthcare provider, software, and electronic storage stocks are also posting strong gains, while gold stocks remain under pressure amid a decrease by the price of the precious metal.
Other markets
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Thursday. While Japan's Nikkei 225 Index surged up by 1.3 percent, China's Shanghai Composite Index fell by 0.8 percent.
In the bond market, treasuries have
slid firmly into the red on the heels of the upbeat jobs data. As a
result, the yield on the benchmark ten-year note, which moves opposite
of its price, is up by 2.8 basis points at 1.861 percent.
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| Friday preview |
Anglo American reveals fourth-quarter results
Mining heavyweight Anglo American is expected to reveal a ‘disappointing’ drop in production when it posts its fourth quarter results Friday.
Citigroup analysts forecast “a disappointing 15% drop in copper equivalent volumes year-on-year".
It said operations were hit by labour issues, declining grades and/or weak markets.
The financial services company expects a 50% decline in equivalent
refined platinum year-on-year to 292,000 ounces, a 16% drop in diamonds
to 5.5m carats, a 9.0% slide in copper to 154,700 tonnes and a 14% fall
in iron ore to 10.7m tonnes.
JP Morgan this week noted Anglo was falling behind its rivals BHP Billiton and Rio Tinto in the past 10 years.
“We reduce our Dec-13 target to £16.30/shr (£16.70/shr previously) and
reiterate our 'underweight' [rating],” JPM’s Frasier Jamieson said.
The troubled miner made headlines this week as reports suggested it may
write down the value of its iron ore project in Brazil by as much as
$5bn following mismanagement of the project which led to a rapid
increase in costs.
The expected costs of the Minas-Rio mine,
one of Anglo's major projects, was revised higher several times
increasing from an initial estimate of $3.6bn to about $8bn. It is
understood the company will slash the value of the mine by $5bn before
issuing full year numbers on February 15th.
Meanwhile, the company's plans to restructure its platinum
division in South Africa last week were met with a backlash from
politicians and unions, as people expressed their anger at plans to cut
thousands of jobs.
Yet shares were up 1.34% to 1,894.00p at 16:05 one day ahead of the fourth-quarter statement.
Friday January 25
INTERIM DIVIDEND PAYMENT DATE
Aberdeen New Dawn Inv Trust, Betfair Group, Burberry Group, Cranswick,
Ensor Holdings, Falkland Islands Holdings, Greene King, Ground Rents
Income Fund, Halfords Group, Micro Focus International, RPC Group,
Speedy Hire, Vertu Motors
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
German IFO Business climate index (Jan.)(09:00)
US New Home Sales (Dec.)
Q4
Anglo American
Polski Koncern Naftowy Orlen S.A. GDR(Reg S)
GMS
Petards Group
FINALS
Polski Koncern Naftowy Orlen S.A. GDR(Reg S)
EGMS
Coal of Africa Ltd.
AGMS
Advanced Power Components, Caledonian Trust, Henderson European Focus Trust, Nasstar, Scottish Inv Trust
TRADING ANNOUNCEMENTS
William Hill
UK ECONOMIC ANNOUNCEMENTS
GDP (Preliminary) (09:30)
FINAL DIVIDEND PAYMENT DATE
Cambria Automobiles, Hargreave Hale AIM VCT 1, Jelf Group, Proactis Holdings
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