London close: FTSE 100 edges closer to 6,300 after recent strong run
Market Movers
- techMARK 2,257.04 -0.03%
- FTSE 100 6,294.41 +0.16%
- FTSE 250 13,132.49 -0.03%
Improving newsflow in China and some better-than-expected economic data from the US helped the FTSE 100 come close to the 6,300 barrier on Monday, a level not seen since mid-2008.
"What seems to be an unrelenting grind higher has continued today,
with fund manager's chatter of the big rotation being matched by
positive data points and the market's appetite for risk," said David
White, a financial trader from Spreadex.
The impressive 6.8%
rise for the Footsie so far this month puts it on course to record its
best January in 13 years, according to the Financial Times. However, there are some concerns that this rally may be short-lived, with the index's relative strength indicator already at technically 'overbought' levels.
Nevertheless, markets were able to hold on to recent gains with confidence about China's industrial profit potential
providing some support. Stephen Green, the head of research for Greater
China at Standard Chartered, said that Chinese industrial profits
should rise by 30% in 2013 on average as a result of investment in
infrastructure and real estate, improvements in export demand and looser
monetary conditions. Meanwhile, economist Lu Ting from Bank of America
Merrill Lynch expects profits to grow by 25% in the first half of this
year.
Meanwhile, US durable goods orders increased by 4.6% in December, above the 0.7% gain the month before and well ahead of the 2.0% consensus forecast.
Markets rallied on the back of the release, as traders shrugged off
disappointing US pending home sales figures this afternoon. Earnings
figures from Wall Street heavyweight Caterpillar also came in
below estimates, though a bullish outlook for the second half saw the
shares edge higher after the US opening bell.
FTSE 100: Banks gain after Goldman lifts targets
Banking stocks were performing well on Monday afternoon after Goldman Sachs raised targets across the sector. Goldman labelled HSBC as a 'conviction buy' and upped its target from 820p to 860p. Even RBS
was making gains despite the US bank downgrading the stock to 'sell'.
Nevertheless, the target was still lifted from 325p to 340p.
Barclays
was also higher after Goldman raised its target for the shares from
320p to 350p and kept its 'buy' rating. The latter, which is due to
present its new strategic plans on February 12th, was shrugging off some
gloomy comments from Credit Suisse today, which said it believes that
it will be difficult for the bank to "transform" profitability.
Other financial stocks, such as Aberdeen Asset Management, Schroders and Standard Life were also registering decent gains today.
Heading the other way were resource stocks as traders looked to book
profits after a decent performance over winter. Since the start of
December, share prices in the FTSE 350 mining sector have risen by
around 10% on average (including today's fall). Fresnillo and Kazakhyms were both in the red by the close.
Outsourcing group Capita
was a heavy faller this morning after Canaccord Genuity downgraded its
rating for the stock from 'hold' to 'sell'. The broker said that the
attractions of Capita's investment case have "diminished".
Similarly, sweeteners and food products firm Tate & Lyle
was also down after Investec reduced its stance from 'buy' to 'hold'
following a 29% share-price jump since mid-September. Tate's
third-quarter results are due on February 1st.
FTSE 250: Home Retail hit by downgrade
Home Retail Group fell after Morgan Stanley downgraded the stock from 'overweight' to 'equal-weight', with a target of 140p. Sector peer Debenhams was also lower after Morgan Stanley reduced its target from 115p to 110p, downgrading it from 'overweight' to 'equal-weight'.
New World Resources
also slumped today after saying that the price it could sell its
thermal coal in 2013 had tumbled as the market was hit by oversupply.
The company managed to negotiate an average price of €60 per tonne for
2013 thermal coal deliveries, representing a 19% fall on 2012 prices.
Meanwhile, software solutions group Anite
jumped after acquiring the Propism channel emulation product set of
Elektrobit Corp for €31m. Christopher Humphrey, Anite's Chief Executive
said: "The product line we are buying is an excellent addition and a
good fit with Anite's Handset Testing business and the acquisition is
expected to be enhancing to adjusted earnings."
FTSE 100 - Risers
Barclays (BARC) 305.85p +1.71%
Aberdeen Asset Management (ADN) 422.00p +1.59%
Schroders (SDR) 1,942.00p +1.36%
Standard Life (SL.) 350.00p +1.24%
BAE Systems (BA.) 346.90p +1.08%
Reckitt Benckiser Group (RB.) 4,238.00p +1.02%
HSBC Holdings (HSBA) 717.10p +0.96%
RSA Insurance Group (RSA) 131.00p +0.77%
Royal Dutch Shell 'A' (RDSA) 2,281.00p +0.77%
Prudential (PRU) 954.50p +0.74%
FTSE 100 - Fallers
Evraz (EVR) 293.70p -2.10%
GKN (GKN) 241.50p -2.07%
Fresnillo (FRES) 1,663.00p -2.06%
BG Group (BG.) 1,142.00p -2.02%
ITV (ITV) 114.10p -1.47%
International Consolidated Airlines Group SA (CDI) (IAG) 220.00p -1.35%
Hargreaves Lansdown (HL.) 701.00p -1.27%
Petrofac Ltd. (PFC) 1,709.00p -1.21%
Tate & Lyle (TATE) 824.00p -1.20%
Tullow Oil (TLW) 1,169.00p -1.18%
FTSE 250 - Risers
Menzies(John) (MNZS) 727.00p +6.13%
Afren (AFR) 148.50p +3.77%
Atkins (WS) (ATK) 816.00p +3.62%
Anite (AIE) 145.80p +3.55%
Laird (LRD) 231.80p +3.48%
Telecom Plus (TEP) 973.50p +3.34%
Britvic (BVIC) 463.00p +3.23%
Wetherspoon (J.D.) (JDW) 512.50p +3.22%
SDL (SDL) 513.00p +2.76%
SIG (SHI) 136.90p +2.39%
FTSE 250 - Fallers
Home Retail Group (HOME) 124.00p -7.19%
Centamin (DI) (CEY) 56.35p -3.43%
BTG (BTG) 320.00p -3.21%
Debenhams (DEB) 102.20p -2.94%
Regus (RGU) 115.80p -2.85%
Petropavlovsk (POG) 359.50p -2.79%
Micro Focus International (MCRO) 616.00p -2.76%
Dignity (DTY) 1,162.00p -2.60%
New World Resources A Shares (NWR) 304.90p -2.56%
International Personal Finance (IPF) 405.20p -2.50%
| Europe Market Report |
 |
| FTSE 100 | Euronext | Dax perf | CAC 40 |
 |  |  |  |
|
Europe midday: Nomura goes neutral on equities, although still bullish
- Nomura goes tactical neutral on equities
- Eurozone money supply data distorted by Spanish figures
- Italian long-term bonds slightly lower after debt auctions
- Deposits at Greek Banks rose by 4 per cent in December
FTSE-100: 0.01%
Dax-30: -0.11%
Cac-40: 0.02%
FTSE Mibtel 30: 0.45%
Ibex 35: -0.13%
Stoxx 600: -0.07%
The main European equity indices were still trading slightly lower at
the midday point of the session despite the latest gains seen in
equities on Wall Street and in Asia. That ahead of this afternoon´s
economic data releases Stateside.
Of interest, inflows into
equity funds – mostly into emerging markets, admittedly - sustained a
seventh consecutive rise ahead of bond oriented ones last week although the rate of flows moderated, according to the latest data from EPFR.
The currently high levels of 'bullishness' reached by equity investors has prompted Nomura´s
Global Quantitative Strategy Team to issue a short-term tactical
neutral position on the market, although they remain fundamentally
bullish on equities.
Just released Eurozone money supply data
revealed an unexpected contraction, but they appear to have been
distorted by the financial system restructuring in Spain.
Out in the corporate patch, Monte dei Paschi di Siena, announced yesterday that it is looking for a 'white knight' investor to help revive its ailing fortunes.
Discount airline Ryanair sees net income coming in at about €540m euros for the year ending March 31st, outlook which may disappoint some investors.
Italian bonds are trading slightly lower following this morning´s debt auctions.
Back on the equity front, and from a sector stand-point, the worst
performing industrial groups are: Travel (-0.68%), Utilities (-0.61%)
and Basic resources (-0.56%). Banks and Insurers are leading gains.
Eurozone money supply below forecasts
The growth rate of Eurozone money supply, as measured by its three
month moving average, accelerated to 3.7% from 3.4% a year ago
(Consensus: 3.8%). However, the monthly data for December actually
slowed notably, falling to a 3.3% year-on-year pace after 3.8% in the
previous month.
However, the ECB notes that the December 2012
figures were partly affected by the Spanish banking sector restructuring
that that had a sizeable downward impact even on loan flows corrected
for sales and securitisation, Barclays Research points out.
ISAE´s Italian business confidence index for the month of January slipped to 84.6 from 85.7 a month before (Consensus: 86.1).
Other asset classes lower
The euro/dollar is now falling by 0.12% to the 1.3440 dollar mark.
Front month Brent crude futures are now lower by 0.053% to the 113.22 dollar mark on the ICE.
| US Market Report |
US open: Yield curve steepening continues
- Durable goods orders ahead of forecasts
- Pending home sales figures misleading, NAR says
- Interest rate curve continues steepening, 10 year above 2 per cent
Dow Jones Industrials: -0.02%
Nasdaq Comp.: 0.33%
S&P 500: -0.16%
US equity benchmarks are now trading in a 'mixed' fashion. That follows
the release of what at first glance might be taken – erroneously
apparently – for similarly mixed economic indicators.
Also worth highlighting are the positive comments from ratings agency Fitch
as regards the very short-term outlook for the United States´ AAA
credit rating. The temporary suspension of the US federal government's
debt limit removes the near-term risk to the AAA rating, Fitch said.
Of interest as well, the Financial Times
reported today on how shale 'boom' is firing up opposition from
environmental groups, but also investors, with US gas flaring nowadays
clearly visible from outer space and with a luminosity rivalling that of
cities such as Chicago.
Earth moving machinery giant Caterpillar said Monday it expects 2013 earnings per share of between $7 to $9, compared to the consensus estimate of $8.54 a share.
Goldman Sachs has lowered its recommendation on AK Steel to 'sell' from `neutral'.
Goldman Sachs is expected to raise $1bn from the sale of a stake in Chinese lender ICBC.
Durable goods orders ahead of expectations
US
durable goods orders spiked higher in December, rising at a 4.6%
month-on-month clip, versus the 2.0% increase which was forecast.
The critical 'core' series for durable goods, which excludes both
Defense and civil aircraft, came in comfortably ahead of economists´
expectations, when revisions to November´s data are taken into account
(although they are weak when compared with levels from a year ago).
US pending home sales fell by 4.3 per cent month-on-month in December, coming in far below the 0.0 per cent reading expected.
Lawrence Yun, the National Association of Realtors´s (NAR) Chief
Economist, said there is an uneven uptrend. "The supply limitation
appears to be the main factor holding back contract signings in the past
month. Still, contract activity has risen for 20 straight months on a
year-over-year basis," he said. "Buyer interest remains solid, as
evidenced by a separate survey which shows that buyer foot traffic is
easily outpacing seller traffic," Yun added.
"The broad trend
in pending home sales mirrors that of the broader housing market and
does not alter our view that the recovery in US housing has sustained
momentum," commented analysts at Barclays Research chipped in.
Yield curve continues 'bull steepening'
10 year US Treasury yields are now rising by 4 basis points, to the 1.97% mark.
Front month West Texas crude futures were moving higher by 0.27% to the 96,14 dollar per barrel mark on the NYMEX.
S&P 500 - Risers
Hess Corp. (HES) $62.36 +5.87%
Western Union Co. (WU) $14.09 +4.14%
Biogen Idec Inc. (BIIB) $151.62 +3.71%
Xerox Corp. (XRX) $8.18 +3.09%
TripAdvisor Inc. (TRIP) $47.35 +3.02%
Chipotle Mexican Grill Inc. (CMG) $312.52 +2.98%
Apple Inc. (AAPL) $452.33 +2.83%
Cablevision Systems Corp. (CVC) $15.59 +2.57%
E*TRADE Financial Corp. (ETFC) $10.58 +2.42%
Valero Energy Corp. (VLO) $38.95 +2.23%
S&P 500 - Fallers
PPG Industries Inc. (PPG) $138.66 -3.85%
Southwestern Energy Co. (SWN) $33.48 -3.32%
Whirlpool Corp. (WHR) $106.14 -3.23%
United States Steel Corp. (X) $23.79 -3.02%
CONSOL Energy Inc. (CNX) $31.13 -2.96%
Bed Bath & Beyond Inc. (BBBY) $58.12 -2.78%
LyondellBasell Industries (LYB) $61.04 -2.73%
Alpha Natural Res (ANR) $8.97 -2.58%
Weyerhaeuser Co. (WY) $30.25 -2.26%
Gannett Co. Inc. (GCI) $19.70 -2.23%
Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $97.54 +2.05%
Microsoft Corp. (MSFT) $28.18 +1.08%
General Electric Co. (GE) $22.43 +0.63%
Intel Corp. (INTC) $21.08 +0.57%
Hewlett-Packard Co. (HPQ) $17.08 +0.53%
McDonald's Corp. (MCD) $94.17 +0.48%
Cisco Systems Inc. (CSCO) $21.25 +0.47%
Unitedhealth Group Inc. (UNH) $56.30 +0.46%
AT&T Inc. (T) $34.17 +0.44%
Procter & Gamble Co. (PG) $73.55 +0.41%
Dow Jones I.A - Fallers
Alcoa Inc. (AA) $8.92 -1.22%
Boeing Co. (BA) $74.30 -0.97%
Exxon Mobil Corp. (XOM) $90.92 -0.88%
JP Morgan Chase & Co. (JPM) $46.81 -0.74%
E.I. du Pont de Nemours and Co. (DD) $47.98 -0.72%
American Express Co. (AXP) $59.09 -0.69%
Bank of America Corp. (BAC) $11.54 -0.69%
Travelers Company Inc. (TRV) $77.82 -0.68%
Home Depot Inc. (HD) $67.38 -0.65%
Merck & Co. Inc. (MRK) $43.25 -0.48%
Nasdaq 100 - Risers
Biogen Idec Inc. (BIIB) $151.62 +3.71%
Facebook Inc. (FB) $32.49 +3.01%
Apple Inc. (AAPL) $452.33 +2.83%
Baidu Inc. (BIDU) $110.87 +2.65%
NetApp Inc. (NTAP) $36.91 +2.10%
Maxim Integrated Products Inc. (MXIM) $32.29 +2.09%
Staples Inc. (SPLS) $13.23 +2.00%
Nuance Communications Inc. (NUAN) $23.99 +1.74%
Microchip Technology Inc. (MCHP) $33.88 +1.73%
Western Digital Corp. (WDC) $48.90 +1.71%
Nasdaq 100 - Fallers
Bed Bath & Beyond Inc. (BBBY) $58.12 -2.78%
Amazon.Com Inc. (AMZN) $277.76 -2.20%
Priceline.Com Inc. (PCLN) $706.40 -1.73%
Vertex Pharmaceuticals Inc. (VRTX) $46.08 -1.64%
Catamaran Corp (CTRX) $52.37 -1.62%
Perrigo Company (PRGO) $101.80 -1.28%
Regeneron Pharmaceuticals Inc. (REGN) $172.51 -1.13%
Akamai Technologies Inc. (AKAM) $40.69 -1.12%
Celgene Corp. (CELG) $98.71 -1.05%
Equinix Inc. (EQIX) $223.16 -0.93% |
| Broker Tips |
Broker tips: SSE, GKN, Tate & Lyle
Despite SSE underperforming the wider UK utility sector on the news that its Chief Executive Officer (CEO) is leaving, Credit Suisse has kept its 'outperform' recommendation for the shares, saying that value-creation is expected to continue.
Credit Suisse said it expects no change in the SSE business strategy
despite Marchant's departure, "nor does there need to be". It noted
that the board's criteria for selecting a new frontman was a "commitment
to the dividend".
UBS has reiterated its 'buy' rating for engineering giant GKN and raised its target for the stock from 230p to 270p, saying that "life should get better" after a difficult fourth quarter.
The broker reckons that in six to nine months' time, European auto production growth should be positive
- global production should growth would by 4.0% in the fourth quarter -
and other industrial markets should also return to growth. Meanwhile,
reducing integration costs at Volvo would also help.
Investec has cut its rating for sweeteners and food products group Tate & Lyle
from 'buy' to 'hold' after reducing its forecasts ahead of the group's
third-quarter results, saying it's time to "pause for a breather" after
shares have jumped 29% since mid-September.
"We had been
arguing for a re-rating and an 850p 12 month price target in November.
But Tate's virtual arrival within just three months sends a cautionary signal to us," said analyst Martin Deboo.
|
| | | | | | | |
|
No comments:
Post a Comment