ADVFN III Morning Euro Markets Bulletin February 11, 2013.

ADVFN III Morning Euro Markets Bulletin

Daily world financial news Monday, 11 February 2013

London Market Report

FTSE 100 Euronext Dax perf CAC 40 Please click on the images to view our interactive charts

London open: Markets lack direction early on Market Movers techMARK 2,282.23 -0.33% FTSE 100 6,269.08 +0.08% FTSE 250 13,358.39 -0.13% The FTSE 100 opened flat on Monday morning with volumes thin as Asian markets close for the Lunar New Year holidays. Market strategist Ishaq Siddiqi from ETX Capital said that there was "a lack of direction from Asia overnight" with Japan's Nikkei and Hong Kong's Hang-Seng indices both closed. "At the same time, no meaningful economic data due in Monday leaves the market without a clear catalyst to energise direction." Eurozone finance ministers are to meet today to discuss the current crisis at the monthly meeting of the Eurogroup. This will be followed by the Ecofin gathering tomorrow that includes the rest of the European Union (EU) finance ministers. One of the main topics on the agenda will be the Cyprus bailout, but no final decision will be made as policymakers have already indicated that they prefer to wait until after the February 17th presidential elections. Cyprus is estimated to need approximately €17.5bn to wade through its current financial sector crisis and EU officials have expressed that a final agreement probably won't come through until some time in March. FTSE 100: Barclays rises ahead of results Banking group Barclays was making gains ahead of its full-year results and conclusion of its strategic review out tomorrow. Media reports suggest that the lender plans to reduce costs by at least £2.0bn and cut 2,000 jobs in investment banking. Supermarket giant Tesco was on shopping lists early on after Exane BNP Paribas upgraded the stock to 'neutral' and lifted its target from 320p to 375p. Oilfield services group Petrofac also rose after Oriel Securities raised its rating to 'hold'. Power systems company Rolls-Royce was in demand after saying that it has been awarded a contract worth nearly £100m from the US Air Force. Mining firm Rio Tinto was in the red despite the Australian Competition Tribunal ruling that its Hamersley and Robe rail network should not be opened up to other users. Real estate firm British Land edged higher after expanding its London portfolio with the purchase of a number of properties from Dutch group Weraldhave for £183.8m, including the Ealing Broadway Shopping Centre. FTSE 250: Fidessa up despite flat results Trading systems developer Fidessa gained despite reporting that profits and revenues were hardly changed during 2012 due to tough market conditions. Both revenue and adjusted pre-tax profit fell 1.0%. Third-quarter power generation at Essar Energy almost doubled, causing shares to rise this morning. Power generation rose 93% to 2,862m units compared to 1,481m units in the same quarter a year earlier. Utilities services prover Telecom Plus edged higher after saying that it plans to increase its total dividend by 15% to 31p per share in the current financial year.

UK Event Calendar

Monday February 11 INTERIMS Avation INTERNATIONAL ECONOMIC ANNOUNCEMENTS Harmonised Competitiveness Indicators (EU) (09:00) SPECIAL DIVIDEND PAYMENT DATE Rexam EGMS Ruukki Group (DI) AGMS African Potash Ltd, GCP Infrastructure Investments Ltd, RWS Holdings FINAL DIVIDEND PAYMENT DATE Dunedin Smaller Companies Inv Trust, ITE Group, Paragon Group Of Companies

Europe Market Report

FTSE 100 Euronext Dax perf CAC 40

Eurozone finance ministers studying possible ‘bail-in’ of Cyprus - Goldman Sachs lowers view on equities to neutral - Banks deposited 157.2bn euros overnight at ECB FTSE-100: 0.33% Dax-30: -0.09% Cac-40: 0.34% FTSE Mibtel 30: -0.08% Ibex 35: -0.40% Stoxx 600: -0.27% European stocks were seeing some slight selling pressure at the beginning of the day ahead of this evening´s meeting of the so-called Eurogroup. Eurozone finance ministers are expected to discuss the need – and possible modalities – of a bail-out of Cyprus and its banks. Also on the agenda may be the recent sharp moves in currency markets, especially ahead of this week´s meeting of G 20 finance ministers, where the matter is expected to be discussed. Particularly worth noting, according to The Financial Times a radical new option (one of three being studied) for the financial rescue of Cyprus would force losses on uninsured depositors in Cypriot banks, as well as investors in the country’s sovereign bonds. While such a solution may vex financial markets European leaders are described as weary of rescuing a banking system often seen as a money laundering centre for wealthy Russians. Of interest, the recent rise in periphery sovereign risk premiums has had a dampening effect on investor demand for Southern European equities, the latest data from EPFR Global shows. Thus, such funds saw $264m in redemptions last week. For its part, last Friday Goldman Sachs went neutral (from overweight) on global equities on a three month view, although it remains overweight on a 12 month view. According to their strategists, "Some US fiscal uncertainty remains and the European sovereign situation could deteriorate again, but we see risks as smaller than last year." Speaking over the weekend however ECB council member Jorg Asmussen was cited as saying that an agreement on how to rescue Cyprus is likely by the end of the March. On Friday ratings agency Fitch reaffirmed Spain´s long-term debt rating but also kept its outlook on the same at negative. Novo Nordisk plummets Novo Nordisk has failed to win approval from US regulatory authorities for a new insulin treatment as regulators seek to better assess heart risk. Shares of the company are now falling by 12%. Dutch retailer Ahold has sold its 60% stake in Swedish supermarket chain ICA for approximately 20bn Swedish crowns ($3.1bn) to Hakon Invest. Troubled Italian lender Monte Paschi di Siena is ready to clear the way to receiving €3.9bn ($5.2bn) in state backing in a "very short time", according to remarks from the Chairman. From a sector stand-point the worst performers today are: Automobiles (-1.07%), Travel (-0.93%) and Oil (-0.67%). Light data calendar French manufacturing sector output dropped by 0.1% month-on-month in December (Consensus: -0.2%). Other asset classes trading mixed The euro/dollar is now edging higher by 0.25% to 1.3400. Front month Brent crude futures are falling, by 0.321 dollars to the 118.52 dollar level on the ICE.

US Market Report

US close: Stocks rise on US trade deficit data – Reduction in US trade deficit points to improving global demand - Wholesale inventories data lower than consensus forecasts - Positive sentiment from Chinese data and EU policy buoys US stocks Dow Jones: 13,993 (0.35%) Nasdaq: 3,194 (0.91%) S&P 500: 1,518 (0.57%) US stocks rose on Friday after unexpected data showed that the nation's trade deficit contracted by more than had been expected. The Department of Commerce released data showing the trade deficit had fallen almost 21% in December to $38.5bn, marking the biggest drop in four years, as exports rose and imports softened. Wholesale inventories dip The positive news was slightly dampened however by the release of data from the Commerce Department showing a 0.1% decrease in stockpiles. Barclays analyst Peter Newland commented that the decline "much weaker than Barclays' forecast which was for growth of 0.5% and the consensus of 0.4%." He added: "Alongside a downward revision to November, this subtracted 0.3pp from our fourth quarter Gross Domestic Product tracking estimate, which now stands at 0.3% quarter-on-quarter seasonally adjusted annual rate." Chinese data and European policy decisions hopeful Meanwhile, markets across Europe were making gains today after China's trade surplus came in ahead of forecasts, with both imports and exports jumping in January. The trade surplus fell by less than expected from $31.6bn to $29.2bn, above the $26.6bn forecast. And US stocks were buoyed by increasing signs of stability in the Eurozone. After two days of talks, EU leaders agreed to cut the budget limit for 2014-2020. By 3% to 908bn euros. The decision marks the first reduction in the EU's multi-annual budget in its history Boeing shares slip Boeing's shares fell 1.12% after the company warned customers awaiting delivery of new 787 Dreamliners to expect delays, amid a continuing investigation into their safety. The entire fleet of 787s was grounded last month after a battery on one plane caught fire and a malfunction on another plane caused it to make an emergency landing. Meanwhile LinkedIn's shares soared by nearly 17% as the company beat Wall Street estimates. The group reported a fourth quarter profit of $11.5m, or 10 cents per share, compared with a profit of $6.92m, or 6 cents per share in the corresponding period in the previous year. Revenue almost doubled over the comparable time frame to $303.62m. Hewlett-Packard topped the Dow Jones Industrial Average, rising 2.62% while Microsoft was hot on its heels, coming in as the fourth biggest gainer on the index. Soft-drinks company Coco-Cola's shares fell 1.12% to $76.56 S&P 500 - Risers Microchip Technology Inc. (MCHP) $36.39 +7.22% Dollar Tree Stores Inc. (DLTR) $41.06 +4.21% SLM Corp. (SLM) $18.66 +4.19% Apartment Investment & Management Co. (AIV) $28.57 +3.63% Pioneer Natural Resources Co. (PXD) $128.97 +3.56% News Corp. Class A (NWSA) $28.46 +3.27% International Game Technology (IGT) $16.79 +3.20% Marathon Petroleum Corporation (MPC) $81.43 +3.05% Wynn Resorts Ltd. (WYNN) $126.52 +3.00% Electronic Arts Inc. (EA) $17.37 +2.96% S&P 500 - Fallers Moody's Corp. (MCO) $43.37 -7.70% Alpha Natural Res (ANR) $8.23 -3.29% Monster Beverage Corp (MNST) $46.84 -2.72% McGraw-Hill Companies Inc. (MHP) $42.67 -2.60% Avon Products Inc. (AVP) $16.85 -2.49% Juniper Networks Inc. (JNPR) $21.84 -2.37% First Solar Inc. (FSLR) $30.40 -2.28% Republic Services Inc. (RSG) $31.12 -2.26% Best Buy Co. Inc. (BBY) $15.29 -1.86% Fossil Inc. (FOSL) $103.90 -1.78% Dow Jones I.A - Risers Hewlett-Packard Co. (HPQ) $16.87 +2.62% Unitedhealth Group Inc. (UNH) $57.74 +1.21% Home Depot Inc. (HD) $67.01 +1.06% Microsoft Corp. (MSFT) $27.55 +0.98% International Business Machines Corp. (IBM) $201.68 +0.97% Intel Corp. (INTC) $21.00 +0.91% JP Morgan Chase & Co. (JPM) $48.63 +0.83% Caterpillar Inc. (CAT) $96.85 +0.77% Johnson & Johnson (JNJ) $75.48 +0.56% Walt Disney Co. (DIS) $54.66 +0.55% Dow Jones I.A - Fallers Boeing Co. (BA) $76.56 -1.12% Bank of America Corp. (BAC) $11.76 -0.68% American Express Co. (AXP) $61.80 -0.55% Procter & Gamble Co. (PG) $75.75 -0.53% Coca-Cola Co. (KO) $38.77 -0.36% Travelers Company Inc. (TRV) $78.86 -0.33% Pfizer Inc. (PFE) $26.88 -0.30% Verizon Communications Inc. (VZ) $44.35 -0.25% AT&T Inc. (T) $35.27 -0.00% Nasdaq 100 - Risers Activision Blizzard Inc. (ATVI) $13.41 +11.19% Microchip Technology Inc. (MCHP) $36.39 +7.22% Dollar Tree Stores Inc. (DLTR) $41.06 +4.21% News Corp. Class A (NWSA) $28.46 +3.27% Wynn Resorts Ltd. (WYNN) $126.52 +3.00% Analog Devices Inc. (ADI) $45.70 +2.95% Adobe Systems Inc. (ADBE) $39.12 +2.76% Equinix Inc. (EQIX) $219.71 +2.63% Altera Corp. (ALTR) $35.38 +2.61% Texas Instruments Inc (TXN) $34.29 +2.60% Nasdaq 100 - Fallers Nuance Communications Inc. (NUAN) $20.00 -18.53% Catamaran Corp (CTRX) $51.48 -3.27% Monster Beverage Corp (MNST) $46.84 -2.72% Fossil Inc. (FOSL) $103.90 -1.78% Stericycle Inc. (SRCL) $96.80 -1.42% Staples Inc. (SPLS) $12.98 -1.37% Intuit Inc. (INTU) $61.51 -1.19% Mondelez International Inc. (MDLZ) $27.76 -1.00% Randgold Resources Ltd. Ads (GOLD) $94.21 -1.00% Sirius XM Radio Inc (SIRI) $3.12 -0.95%

FX and Commodities round-up

FX round-up: Yen leaps after currency remark The Japanese yen rose strongly against the dollar on Friday after Japan's finance minister Taro Aso's said the currency's fall had been steeper than the government expected. The Japanese ministry later shrugged off the comment. They said Aso had meant to say that the yen's sharp decline was 'fast paced' rather than a surprise. Nevertheless, the remarks fuelled speculation that the Bank of Japan will not take aggressive policy action and sent the yen lower. Against the yen, the dollar changed hands at a peak of ¥93.70 early Friday before later trading at ¥92.75 compared to ¥93.41 on Thursday. The euro bought ¥123.93 compared to ¥125.32 the previous session. The single currency was down against the dollar on Friday after European Central Bank President Mario Draghi said policy makers should keep an eye on the euro, for any signs that it is hurting the Eurozone's inflation outlook. He added there are more negative risks than positive and said the exchange rate was key for growth and stability. However Draghi also noted, the euro's recent ascent stemmed from fresh confidence in the single currency. The dollar index, which measures the US currency against a basket of six other currencies, rose to 80.234 from around 79.722 on Thursday. The British pound rose to $1.5794 from $1.5697 previously. Commodities: Supply glut sends oil lower Crude oil futures settled lower on Friday on fresh concern about surplus supplies in a key delivery hub in Cushing, Okla, while the stronger dollar also eroded demand. Crude oil for March delivery settled down 11 cents at $95.72 a barrel on the New York Mercantile Exchange. Oil prices came under pressure on concern that the key Seaway pipeline is struggling to reduce the supply glut at Cushing, the trading hub for NYMEX oil. The pipeline's flows have been cut to 175,000 barrels because of terminal capacity issues where the pipeline ends in Texas. Markets also took fright at reports from IIR Energy that Phillips 66's Wood River refinery in Illinois would close late February for heavy maintenance. The closure will add to the glut of oil supplies already in storage at Cushing. Meanwhile on the ICE Futures exchange in London, March Brent crude struck a high of $119.17 before settling up 1.4% at $118.90 a barrel on Friday. Among precious metals gold retreated 0.3%, closing below $1,670 for the first time since the end of January. Gold for April delivery lost $4.40 to settle at $1,666.90 an ounce on the Comex division of the New York Mercantile Exchange.