London open: Admiral leads market higher early on
Market Movers
- techMARK 2,216.97 -0.06%
- FTSE 100 6,167.70 +0.22%
- FTSE 250 12,933.70 -0.10%
The FTSE 100 edged higher in early trading on Monday morning ahead of
key meetings in Japan and Europe, though volumes are said to be light
given a national holiday in the US.
"We could see some choppy markets today, with trading volumes severely reduced as US markets shut in observance of Martin Luther King Day," said market analyst Craig Erlam from Alpari.
"The holiday also brings a brief break from corporate earnings season,
however this will pick up again on Tuesday when Google and IBM both
report. Just as last week was huge for banks, similarly this week is
going to be all about the tech companies with Apple and Microsoft also
due to report later this week."
As for today, markets are likely to focus on a two-day Bank of Japan meeting with expectations high for a bond-buying announcements. According to a Bloomberg survey, most analysts expect a 10tn-yen increase in asset purchases.
Meanwhile, Eurozone finance ministers
(the Eurogroup) are to meet in Brussels later today. Members are
expected to elect the new head of the group, as Luxembourg Prime
Minister Jean-Claude Juncker steps down from the post after having served for eight years. Holland's finance minister Jeroen Dijsselbloem is expected to take the helm.
Finance ministers will be examining Cyprus
as the results of the review for the country's bank restructuring are
expected to be available today. However, doubts over Mediterranean
country's debt sustainability remain and final decisions on aid will
probably be delayed until after the country's presidential elections in
February.
FTSE 100: Insurers, IAG lead gains early on
Insurance giant Admiral
surged this morning, leading the Footsie higher early on, after Goldman
Sachs upped its view on the shares from 'neutral' to 'buy' and hiked
its price target from 1,160p to 1,500p. Admiral was followed closely by
sector peer Aviva.
Airline giant IAG was also performing well after Credit Suisse upgraded the stock to 'outperform'. In contrast, drinks group Diageo was lower after UBS cut its recommendation to 'neutral'.
"Learning company" Pearson sunk after saying that 2012 operating profits would be flat at £935m.
United Utilities and Centrica
were in the blue after Seymour Pierce said that despite the utility
sector's outperformance in 2012, "there is still some very good value
there, backed up by solid yields".
Gold miner Randgold
gained after saying that production has returned to norma at its Tongon
mine after a fire in the mills section of plant three weeks ago.
FTSE 250: Afren up after record performance
Oil and gas group Afren
was a high riser after saying that production levels last year hit a
record-high as it labelled its exploration and appraisal campaign a
"significant success". Net production in 2012 totalled 42,830 barrels of
oil equivalents per day (boepd), in line with the guidance range of
42,000-46,000 boepd given at the half-year results statement in August.
Transport and logistics group Stobart also rose after saying that Non-Executive Chairman Rodney Baker-Bates is to retire.
| UK Event Calendar |
Monday January 21
INTERIMS
City of London Investment Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Producer Price Index (GER) (07:00)
Martin Luther King Holiday in US
SPECIAL DIVIDEND PAYMENT DATE
Polymetal International
EGMS
Alpha Bank GDR (Reg S) USD
AGMS
Cambria Automobiles, IPSO Ventures, John Lewis of Hungerford, Lowland Investment Co
TRADING ANNOUNCEMENTS
Afren
UK ECONOMIC ANNOUNCEMENTS
Rightmove house price survey
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| UK Event Calendar |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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European Stocks Seen Higher On Debt Ceiling Hopes
European
stocks may rise on Monday, benefiting from a late-day rebound on Wall
Street Friday after Republicans proposed a three-month increase to the
borrowing limit in order to allow the U.S. to pay its bills. Trading
volumes may remain relatively thin due to the Martin Luther King Jr.
holiday in the United States.
Asian
stocks are turning in a mixed performance, with Japanese shares leading
the declines, as investors turned their focus to the two-day policy
meeting of the Bank of Japan which concludes tomorrow. The yen bounced
back from its lowest level against the dollar in 2 1/2 years in choppy
trading ahead of the policy meeting.
Japan's Nikkei index is losing 1.5 percent, Hong Kong's Hang Seng index is down 0.15 percent and South Korea's Kospi average edged down marginally, while Australia's S&P/ASX 200 edged up 0.1 percent and China's Shanghai Composite index is moving up 0.2 percent.
In
economic releases, British house prices increased marginally in
January, recovering from sharp declines in the past two months as new
sellers coming to market adopted a pragmatic pricing approach, a survey
by Rightmove revealed. House prices rose 0.2 percent in January from the
previous month following a 3.3 percent fall in December.
Separately,
an index of personal finances of U.K. households declined at a slower
pace in January, helped mainly by improved perceptions about inflation,
job security and credit availability, data from a survey by Markit
Economics showed.
In corporate news, HSBC Holdings
Plc has agreed to pay $249 million in cash and other assistance to help
mortgage borrowers, joining 12 other mortgage servicers to settle with
U.S. regulators over alleged foreclosure improprieties.
Bill Gates, along with other investors, agreed to invest $1 billion in OCI NV, a wholly-owned subsidiary of Cairo-based Orascom Construction Industries S.A.E. under a share-exchange offer.
British energy giant BP Plc.
gave a further update on the situation at the In Amenas joint venture
in Algeria and its response following the terrorist attack on the site
early on Wednesday morning.
Royal Imtech N.V. announced it recently obtained new orders in the Swedish industrial market with a total value of 45 million euros.
Richemont reported
third-quarter total sales of 2.86 billion euros compared to 2.62
billion euros prior year, helped by robust jewellery sales and continued
retail channel momentum.
European
stocks ended mostly lower on Friday, as a weak reading on U.S. consumer
confidence and mixed earnings results overshadowed better-than-expected
GDP data out of China. The Euro Stoxx 50 index of Eurozone bluechip stocks shed 0.3 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, eased 0.2 percent.
Around
Europe, benchmark indexes in France, Germany and Switzerland slipped
between 0.1 percent and 0.8 percent, while the U.K.'s FTSE 100 rose 0.4 percent.
U.S.
stocks showed a lack of direction before ending mostly higher on Friday
after House Republican leaders indicated they will hold a vote to
authorize a three-month temporary debt limit increase to give lawmakers
time to pass a budget that reduces spending.
Intel and Capital One
reported disappointing results and data showed consumer sentiment in
the U.S. unexpectedly fell in January, weighing on investor sentiment to
some extent. The Dow rose 0.4 percent and the S&P 500 advanced 0.3 percent to hit five-year closing highs, while the tech-heavy Nasdaq ended down marginally.
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| US Market Report |
US close: S and P 500 moves above last year's highs
- Republicans will propose temporary increase in debt ceiling
- Republicans will drop some of their demands
- S and P 500 closed above key resistance on weekly charts
- Volatility falls to levels of early 2007
Dow Jones Industrials: 0.39%
Nasdaq Comp.: -0.04%
S&P 500: 0.34%
The major US equity averages finished the session mixed but at their best levels of the day.
In a somewhat surreal manner, the turnaround seems to have come on the
heels of remarks from Congressional Republican majority leader Eric
Cantor, according to whom Congressmen will not get paid if an agreement
on the budget has not been reached by the time that a proposed three
month extension on the deadline for raising the federal debt ceiling has
expired.
That, at least, will be part of the proposal which
Republicans will bring to the floor next Wednesday. Yet that begs the
question of what the Democrats' response will be, although Republicans
have dropped their insistence that every dollar of increase in the debt
ceiling be matched by a dollar of reduction in spending.
"Of
potentially great importance for stock-market investors, the S&P 500
managed to clear last year's highs (at 1,474 points) on weekly charts,
and apparently by a sufficiently wide margin (usually considered to be
1%). That was a signal which many technical analysts had been waiting
for. The next area of resistance will be the upper part of the rising
price channel which it is now in," comment technical analysts at Digital Look.
All of the above followed the release of weaker than expected consumer
confidence data and the rather poor news-flow regarding the
fourth-quarter results from some of Wall Street's top-tier outfits, such
as Intel or Capital One Financial.
Of note,
volatility levels –as measured by the VIX gauge – retreated by over 8%
to 12.46, a level not seen since the Spring of 2007, just before markets
began their downwards spiral during the financial crisis. That means
that markets may be increasingly exposed to the risk of any negative
surprises.
US markets will remain closed on January 21st, in observance of the anniversary of Martin Luther King Jr.'s birthday.
GE and Morgan Stanley impress; Intel and Capital One do not
General Electric rose after announcing adjusted earnings of 44 cents a share which narrowly beat the 43 cent analyst estimate.
Banking giant Morgan Stanley was also higher after swinging to a higher-than-expected profit in the fourth quarter.
That release followed on from the mixed results from other banking heavyweights seen earlier in the week. Both Goldman Sachs and JPMorgan smashed expectations on Wednesday, while Bank of America and Citigroup disappointed markets on Thursday.
However, semiconductor manufacturing titan Intel was lower after its fourth-quarter results, which were released after the market-close last night.
The chipmaker reported its second consecutive quarter of falling sales.
The company seems to be finding it difficult to achieve a transition
towards the mobile sector.
Capital One Financial plummeted after disclosing lower than forecast fourth quarter profits.
State Street moved sharply higher after the custodian's quarterly results showed a 15% rise in earnings.
Analysts at Robert W.Baird downgraded Visa to 'neutral' from 'outperform'.
Piper Jaffray upgraded Caterpillar to 'overweight' from 'neutral.'
The latest edition of The Economist calls attention to the importance for GM
(or Government Motors as some now call it) of the line-up of new models
that it will bring to the market over the next year or so.
From a sector stand-point the best performance was seen in the following
sectors: Coal (3.1%), Investment Services (2.58%) and Oil Equipment
(2.52%).
Don't lower my salary
The
University of Michigan's preliminary sentiment index for the month of
January came in at 71.3, versus a reading of 72.9 for the previous month
and a consensus estimate of 75. The expectations sub-index dropped to
62.7, after 63.8 in the previous month (Consensus: 65.2).
The
fall was ascribed by observers to the forthcoming expiry of the payroll
tax holiday. Nevertheless, "it is only a slight fall, but consumers'
sentiment is being watched for signs that spending may retrench,"
commented economists at Digital Look. Small falls in yields and oil futures
10 year US Treasury yields fell by 4 basis points to 1.84%.
Front month West Texas crude futures were down by 0.27% to the 95.22 dollar per barrel level on the NYMEX.
S&P 500 - Risers
Life Technologies Corp. (LIFE) $60.79 +10.59%
Morgan Stanley (MS) $22.38 +7.86%
State Street Corp. (STT) $53.36 +5.92%
Schlumberger Ltd. (SLB) $76.50 +4.27%
CONSOL Energy Inc. (CNX) $31.88 +4.22%
J.C. Penney Co. Inc. (JCP) $18.87 +4.02%
Nabors Industries Ltd. (NBR) $15.67 +3.98%
Baker Hughes Inc. (BHI) $44.30 +3.67%
Fastenal Co. (FAST) $48.60 +3.60%
General Electric Co. (GE) $22.04 +3.47%
S&P 500 - Fallers
Advanced Micro Devices Inc. (AMD) $2.46 -10.22%
Capital One Financial Corp. (COF) $56.99 -7.47%
Intel Corp. (INTC) $21.25 -6.31%
Whirlpool Corp. (WHR) $102.31 -4.74%
Monster Beverage Corp (MNST) $47.82 -4.05%
JDS Uniphase Corp. (JDSU) $13.20 -3.01%
Johnson Controls Inc. (JCI) $31.01 -2.97%
First Horizon National Corp. (FHN) $9.97 -2.92%
Tesoro Corp. (TSO) $42.49 -2.72%
People's United Financial Inc. (PBCT) $12.39 -2.52%
Dow Jones I.A - Risers
General Electric Co. (GE) $22.04 +3.47%
Caterpillar Inc. (CAT) $97.62 +2.01%
E.I. du Pont de Nemours and Co. (DD) $46.99 +1.36%
Verizon Communications Inc. (VZ) $42.54 +0.97%
AT&T Inc. (T) $33.44 +0.72%
3M Co. (MMM) $98.74 +0.67%
Alcoa Inc. (AA) $9.00 +0.67%
Exxon Mobil Corp. (XOM) $90.80 +0.67%
Home Depot Inc. (HD) $65.47 +0.65%
United Technologies Corp. (UTX) $86.95 +0.64%
Dow Jones I.A - Fallers
Intel Corp. (INTC) $21.25 -6.31%
American Express Co. (AXP) $59.78 -1.58%
Bank of America Corp. (BAC) $11.14 -1.24%
Pfizer Inc. (PFE) $26.54 -1.08%
Boeing Co. (BA) $75.04 -0.29%
Walt Disney Co. (DIS) $52.34 -0.13%
Hewlett-Packard Co. (HPQ) $17.11 -0.00%
Nasdaq 100 - Risers
Life Technologies Corp. (LIFE) $60.79 +10.59%
Fastenal Co. (FAST) $48.60 +3.60%
BMC Software Inc. (BMC) $43.81 +2.46%
Sears Holdings Corp. (SHLD) $46.66 +2.30%
Applied Materials Inc. (AMAT) $12.65 +2.02%
Xilinx Inc. (XLNX) $37.17 +2.00%
Celgene Corp. (CELG) $100.03 +1.87%
Staples Inc. (SPLS) $13.00 +1.60%
Cerner Corp. (CERN) $81.19 +1.55%
CA Inc. (CA) $24.57 +1.45%
Nasdaq 100 - Fallers
Intel Corp. (INTC) $21.25 -6.31%
Monster Beverage Corp (MNST) $47.82 -4.05%
Amgen Inc. (AMGN) $82.08 -2.22%
Check Point Software Technologies Ltd. (CHKP) $48.12 -2.14%
F5 Networks Inc. (FFIV) $96.89 -1.65%
Facebook Inc. (FB) $29.66 -1.59%
Citrix Systems Inc. (CTXS) $67.65 -1.40%
Starz Class A (STRZA) $15.69 -1.26%
Dollar Tree Stores Inc. (DLTR) $38.52 -1.18%
Intuitive Surgical Inc. (ISRG) $508.33 -1.14% |
| FX and Commodities round-up |
FX round-up: Dollar perks up after Chinese data
The
greenback made headway against major currencies on Friday as markets
reacted to data showing China, the world's second largest economy, grew
faster than expected forecast in the final quarter of 2012.
Data out Friday showed Chinese economic growth rose to 7.9% in the three
months ending in December as a steady economic recovery continues. The
figure is up from 7.4% the previous quarter and ahead of expectations
for 7.8% growth during the quarter.
The dollar index, which
measures the US currency against a basket of six others, traded at
79.994 from 79.691 the session before.
The euro dropped below $1.33 before later recovering to around $1.3318 compared to $1.3376 the previous session.
Meanwhile the yen slumped to a 31-month low against the dollar on
Friday on heightened expectations that the Bank of Japan will introduce
aggressive monetary policy action at its upcoming meeting.
The euro changed hands at ¥120.01 from ¥119.43 before while the dollar advanced to ¥90.09 versus ¥89.98 on Thursday.
Sterling fell to $1.5872 from $1.6003 before as markets mulled a weaker than expected UK retails sales report.
Commodities: Modest gain after IEA lifts demand forecast
Crude
oil futures managed a small advance on Friday as the stronger dollar
diluted headway driven by upbeat Chinese economic data and as the
International Energy Agency raised its global oil demand forecast for
2013.
The EIA increased its forecast for oil demand this year,
citing expectations of higher demand from China, the world's second
biggest oil consumer.
It raised its forecast for oil demand by 240,000 barrels a day for 2013 to 90.8m barrels a day.
Crude for February added 7 cents to settle at $95.56 a barrel on the
New York Mercantile Exchange. Normal floor trading will be closed Monday
for the Martin Luther King holiday.
Meanwhile China reported a
quarterly growth rate of 7.9%, up from 7.4% the previous quarter. The
figure is ahead of expectations for 7.8% growth for the quarter and
fuelled hopes that the Chinese economy is recovering steadily.
Otherwise the stronger dollar dented good demand for crude on Friday.
The dollar index, traded at 79.994 from 79.691 the session before. A
stronger makes oil more expensive for holders of other currencies.
Among precious metals gold settled lower on Friday as the stronger dollar chipped away at demand.
Gold for February delivery fell $3.80 to settle at $1,687 an ounce on the Comex division of the New York Mercantile Exchange.
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