London open: BoJ disappoints, markets down
Market Movers
- techMARK 2,223.06 0.00%
- FTSE 100 6,176.03 -0.08%
- FTSE 250 12,976.53 -0.14%
UK stocks opened flat on Tuesday morning ahead of some key economic data in Germany later on.
According to market analyst Craig Erlam from Alpari, trading volumes are expected to pick up today "as traders return to their desks in the US following Martin Luther King Day".
He noted that corporate earnings season will resume on Wall Street with heavyweight groups Verizon Communcations and Johnson & Johnson
reporting before the opening bell. "Both companies tend to report
better-than-expected earnings about half the time, so a higher figure
today should see a positive reaction in the stocks shortly after the
open in the US," Erlam said.
On this side of the Pond, markets will be keeping a close eye on the German ZEW economic sentiment survey this morning, which is expectated to improve from 6.9 to 12.0 in January.
"After a subdued European session yesterday saw modest gains investors
will be turning their attention back to the state of the German economy,
after last week's disappointing annualised gross domestic product
numbers," said Michael Hewson, the senior market analyst at CMC Markets.
"Today's January German ZEW survey is likely to give clues as
to investor sentiment, however it would be a mistake to place too much
stock in it given it is largely a reflection of market trading
conditions which have been relatively benign of late."
Traders were also digesting news out of Japan overnight, where the Bank of Japan
(BoJ) has set a 2.0% inflation target and pledged to embark on a
Fed-style unlimited asset purchase programme. Meanwhile, the central
bank left its benchmark rate unchanged at the prior range of zero to
0.1%. However, the promised increase in asset repurchases will not come
until January 2014, later apparently than at least some had hoped.
Somewhat ironically, just this morning strategists at Credit Suisse
announced their decision to trim their overweight in UK equities to pay
for their recent upgrade to Japan. The FTSE 100 is a defensive market
(by sector composition) and thus tends to underperform when economic
lead indicators and global equity markets rise (we remain positive on
equities and the global economy on a 3- to 6-month view)," they added.
Nevertheless, they continue to overweight the UK.
FTSE 100: SABMiller impresses with Q3 results
Beverages
giant SABMiller, the company famous for Miller Lite and Foster's
brands, said that trading in the third quarter was in line with
expectations with revenue growth accelerating from the first six months
of the year, causing shares to edge higher.
Fresnillo
was in the red despite exceeding production forecasts in 2012: gold
output totalled 473,034 ounces, up 5.4% year on year, was above the
460,000-ounce target.
InterContinental Hotels gained
after saying that it is to receive $31m in damages from FelCor Lodging
Trust, which is removing eight of its hotels from the chain's control.
Oil titan Tullow
was in demand after completing the purchase of Spring Energy Norway AS.
The company announced that the acquisition had already brought success
for Tullow: last week, the company was awarded 13 licenses, of which
four were operated in Norway's 2012 Awards in Predefined Areas licensing
round.
FTSE 250: Ocado gains with management change
Online food company Ocado
was a high riser after unveiling Sir Stuart Rose, who was formerly the
Executive Chairman of the British retailer Marks & Spencer, as its
new independent Non-Executive Director and Chairman Designate, effective
from March 11th. Two months later the City grandee will become
Chairman, following the group's annual general meeting on May 10th.
Residential landlord Grainger
rose after creating the GRIP unit trust with APG Strategic Real Estate
Pool to acquire a residential property portfolio worth £349.4m.
Gold miner African Barrick Gold rose after completing the financing for the expansion of its Bulyanhulu process plant in Tanzania. |
| UK Event Calendar |
Tuesday January 22
INTERIMS
Ideagen
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Existing Home Sales (US) (15:00)
ZEW Survey (EU) (10:00)
ZEW Survey (GER) (10:00)
Q4
Nord Gold NV GDR (Reg S)
FINALS
Nord Gold NV GDR (Reg S)
EGMS
eServGlobal Ltd.
AGMS
EastPharma Ltd GDR (Reg S), European Investment Trust, JPMorgan Chinese Inv Trust, Keystone Inv Trust, Marston's
TRADING ANNOUNCEMENTS
SABMiller, Cairn Energy
UK ECONOMIC ANNOUNCEMENTS
CBI Industrial Trends Surveys (11:00)
UK Public Sector Net Cash Requirement (09:30)
Sir Mervyn King speaks at CBI Northern Ireland Mid-Winter dinner (19:45)
FINAL DIVIDEND PAYMENT DATE
Conygar Investment Company
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
German ZEW Economic Sentiment Index (Jan.)
US Existing Home Sales (Dec.)
BoJ policy meeting ends
| Europe Market Report |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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European Stocks To See Cautious Opening
European stocks may see a cautious opening after the Bank of Japan
said it would buy about 13 trillion yen ($145 billion) in assets per
month starting January 2014. Asian stocks are turning in a mixed
performance, with Japan's Nikkei index losing 0.4 percent as the yen
turned volatile following the outcome of the central bank's policy
meeting. China's Shanghai Composite index is down 0.6 percent, reversing early gains, dragged down by consumer-staples producers and drug makers.
The
Bank of Japan adopted a two percent inflation target advocated by Prime
Minister Shinzo Abe and launched an open-ended asset purchases program
in an attempt to lift the world's third-biggest economy out of
recession. The central bank said it would conduct open-ended asset
purchases from next year, disappointing investors who expected bolder
monetary action with immediate effect.
Closer home, Dutch Finance
Minister Jeroen Dijsselbloem has been elected as the head of the
Eurogroup, replacing Luxembourg Prime Minister Jean-Claude Juncker, who
held the post for the past eight years. After being elected to the post,
Dijsselbloem said the role of Eurogroup in the preparation and
follow-up of euro area summits needs to be developed further. He also
promised to examine the need to update the Eurogroup working methods as
the current methods date back to 2008.
German economic confidence
survey results and public sector finances data from the U.K. are due to
be released in the European session, while the Spanish government aims
to raise between EUR 1.5 billion and EUR 2.5 billion from the auction of
3 and 6 months treasury bills.
Across the Atlantic, investors will likely focus on a slew of earnings reports from DuPont, Apple, McDonald's, IBM, Microsoft, Honeywell and Procter & Gamble due this week for directional cues.
In
corporate news, French eyecare products maker Essilor said it has
created partnerships with local leaders in Colombia, Turkey and China,
all key markets in the company's development plan.
Speed-train maker Alstom SA reported increases in sales and order intake for the third quarter despite a challenging environment.
Interactive entertainment and licensing company Atari SA said it has decided to file for Chapter 11 protection in the U.S. for the US entities of the Atari group, which has been done with immediate effect.
Nokia Siemens Networks B.V.
may sell as much as 750 million euros or about $1 billion of bonds to
support its finances, media reports said, citing people familiar with
the plans.
European stocks rose broadly on Monday, with
encouraging comments from the German Bundesbank on the economy and signs
of progress in U.S. debt ceiling talks underpinning sentiment.
Benchmark indexes in France, Germany and the U.K. rose between 0.6
percent and 0.8 percent, while Switzerland's SMI slid 0.4 percent on
profit taking following recent sharp gains. The U.S. markets were shut
overnight for the Martin Luther King, Jr. Day.
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| US Market Report |
The US Markets was closed for Martin Luther King, Jr. Day
| FX and Commodities round-up |
FX round-up: Dollar holds ground in light trading
The
dollar held its position against most major currencies but pulled off
highs against the yen in lighter than usual foreign exchange.
Trading volumes were much lower than normal with US markets closed on Monday for the Martin Luther King holiday.
The dollar index, which measures the US currency against a basket of
six major currencies, slipped to 80.046 from 80.050 on Friday.
Against the yen, the dollar fell below the ¥90 level to change hands at
¥89.71 compared to ¥90.09 on Friday as traders gear up for aggressive
action from the Bank of Japan.
The BoJ two-day rate setting
meeting started on Monday and the central bank is widely expected to
double its inflation target to 2% and hike its asset purchase programme.
The euro traded at ¥119.56 versus ¥120.01 on Friday as
Eurozone finance ministers met in Brussels to discuss the region's debt
problems.
Commodities: Lack of momentum takes crude lower
Crude oil futures fell on Monday in electronic trading, with normal US floor trading closed for Martin Luther King Day.
Crude oil for February delivery declined 9 cents, in thin trading, to
$95.47 a barrel in electronic trading on the New York Mercantile
Exchange.
With news headlines thin on the ground, focus turned
to Monday's meeting of Eurozone finance ministers in Brussels to
discuss the region's debt problems. French Finance Minister Pierre
Moscovici said ministers are expected to agree on a new President of the
Eurogroup.
Focus also remained on the US budget and plans to raise the debt ceiling.
On London's ICE futures exchange the March Brent contract traded 39 cents lower at $111.48.
Among precious metals gold turned 0.2% higher on Monday in lighter than usual holiday trading in the US.
Gold for February advanced $2.70 to $1,689.7 an ounce on the Comex in New York.
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