Evening Euro markets Bulletin.

ADVFN III Evening Euro Markets Bulletin

Daily world financial news Friday, 13 September 2013

London Market Report

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

Markets trim losses to finish flat The FTSE 100 trimmed losses on Friday afternoon but markets still finished broadly flat as traders scaled back risk appetite ahead of the weekend with the focus now turning to the Federal Reserve meeting next week. London's benchmark index closed down just 5.18 points at 6,583.80, pulling back slightly after hitting a one-month high on Thursday. "Global markets were lifeless today as a raft of potential problems, including ambiguity over a solution to the Syrian conflict as well as fears that the Fed will begin reducing its stimulus measures at the end of its two-day policy meeting on Wednesday, resulted in investors stay on the side lines today," said Financial Trader Shavaz Dhalla from Spreadex. Data from the States was in focus this afternoon as markets gear up for the all-important Federal Open Market Committee two-day meeting which concludes next Wednesday. The Thomson Reuters/University of Michigan’s preliminary reading of its consumer sentiment index fell to 76.8 in September from 82.1 in August, its lowest reading since April. Separately, the Commerce Department revealed that the rate of growth in US retail sales slowed in August to a 0.2% increase from a 0.4% rise in July. The was the smallest rise in four months. Economic figures have been mixed over the last week with analysts having to digest worse-than-expected non-farm payrolls in August as well as a fall in jobless claims to a seven-year low, meaning that the Fed decision on whether or not to taper stimulus still remains up in the air. Brenda Kelly, Senior Market Strategist at IG said that falls this morning may also have been fuelled by rumours that former Treasury Secretary and well-known hawk Larry Summers will succeed Fed Chairman Ben Bernanke in January. Syria meanwhile continues to be closely watched as the US and Russia continued their talks in Geneva over a plan to have Bashar al-Assad hand over chemical weapons to international control in exchange for avoiding US military action. FTSE 100: Reckitt, ITV and Tate gain on improved outlooks Consumer products group Reckitt Benckiser rallied after its Chief Executive Officer Rakesh Kapoor said the company would be a major player in a coming pick-up of the consumer health industry. Terrestrial broadcaster ITV was high riser after Nomura raised its target from 170p to 200p and reiterated a ‘buy’ rating for the stock. The broker said that a continuing improvement in the UK economic outlook prompted it to raise its advertising forecasts for 2013 and 2014. Sweeteners manufacturer Tate & Lyle jumped after analysts at Berenberg said fears about falling sucralose prices were overdone. Falling gold, silver and copper prices hit mining stocks today. Gold and silver in particular looked set to register their worst weekly drops since June. Anglo American, Vedanta, BHP Billiton, Antofagasta and Rio Tinto were all suffering losses by the close of trade. Glencore Xstrata was also lower after announcing a revised scope for its Zanaga iron ore project with a changed budget and efforts to finance work. The company said the project feasibility study is now being advanced on the basis of a staged development, substantially reducing the initial capital requirement and including the potential for initial production using existing infrastructure. Vodafone edged higher after winning enough shareholder support for its €7.7bn takeover of German cable company Kabel Deutschland to go ahead. The British mobile network giant has received the backing of more than 75% of Kabel shareholders. FTSE 250: Imagination rises on licence deal Imagination Technologies has signed a new licence agreement with MediaTek, a semiconductor company for wireless communications and digital multimedia, causing shares to jump on friday. Under the multi-year agreement, MediaTek will continue to deliver products to the group’s PowerVR Series6 division including graphical features such as OpenGL ES 3.0 support, while maintaining the low-power profile essential to mobile devices. MediaTek will be given access to graphics technology. Utilities group Pennon was out of favour after Credit Suisse downgraded the stock to 'underperform', saying it is increasingly concerned that pricing pressure could materialise on energy-from-waste facilities at its waste-management business Viridor.

FTSE 100 - Risers Reckitt Benckiser Group (RB.) 4,554.00p +2.29% ITV (ITV) 183.40p +2.12% Land Securities Group (LAND) 922.00p +1.49% British Land Co (BLND) 582.50p +1.48% Capita (CPI) 1,003.00p +1.47% Tate & Lyle (TATE) 793.00p +1.34% RSA Insurance Group (RSA) 123.10p +1.15% Serco Group (SRP) 574.50p +1.14% Marks & Spencer Group (MKS) 511.50p +1.09% Babcock International Group (BAB) 1,203.00p +1.09% FTSE 100 - Fallers Anglo American (AAL) 1,568.50p -3.21% Morrison (Wm) Supermarkets (MRW) 295.30p -2.38% BHP Billiton (BLT) 1,885.00p -1.98% Wood Group (John) (WG.) 807.00p -1.94% Vedanta Resources (VED) 1,160.00p -1.86% Antofagasta (ANTO) 849.50p -1.68% easyJet (EZJ) 1,300.00p -1.59% Petrofac Ltd. (PFC) 1,390.00p -1.56% ARM Holdings (ARM) 972.00p -1.47% Barclays (BARC) 301.60p -1.41% FTSE 250 - Risers Imagination Technologies Group (IMG) 339.70p +10.51% Fenner (FENR) 407.40p +5.19% Barratt Developments (BDEV) 330.90p +5.05% Bwin party Digital Entertainment (BPTY) 115.00p +4.64% Crest Nicholson Holdings (CRST) 337.20p +3.75% TalkTalk Telecom Group (TALK) 257.50p +3.41% Brewin Dolphin Holdings (BRW) 278.10p +3.00% Bodycote (BOY) 680.50p +2.79% Ashtead Group (AHT) 652.50p +2.76% Wetherspoon (J.D.) (JDW) 752.00p +2.31% FTSE 250 - Fallers Pennon Group (PNN) 699.50p -3.72% Polymetal International (POLY) 709.50p -3.47% Kenmare Resources (KMR) 27.50p -2.55% Lonmin (LMI) 335.10p -2.45% esure Group (ESUR) 227.70p -2.27% African Barrick Gold (ABG) 164.20p -2.03% Diploma (DPLM) 633.00p -2.01% Dairy Crest Group (DCG) 483.40p -1.99% AZ Electronic Materials SA (DI) (AZEM) 311.00p -1.89% ICAP (IAP) 405.80p -1.81%

Europe Market Report

FTSE 100 Euronext Dax perf CAC 40

Stocks mixed after US economic data FTSE 100: -0.08% DAX: 0.22% CAC 40: 0.24% FTSE MIB: 0.19% IBEX 35: 0.22% Stoxx 600: 0.15% European stocks ended the week mixed after US economic reports showed consumer confidence fell unexpectedly and retail sales rose less than forecast. The Thomson Reuters/University of Michigan’s preliminary reading of its consumer sentiment index fell to 76.8 in September from 82.1 in August, its lowest reading since April. Economist had pencilled in a reading of 82. The report said the decline reflected growing fears that higher interest rates would hamper economic growth. Separately, the Commerce Department revealed that the rate of growth in US retail sales slowed in August to a 0.2% increase from a 0.4% rise in July. The increase was less than the 0.4% growth the market was looking for and marked the smallest rise in four months. The disappointing data came as economists weighed whether the Federal Reserve would announce a tapering of stimulus at its two-day meeting starting September 17th. Some economists forecast bond-buying will be reduced by $10bn to $75bn. BOE urged to control house prices The Bank of England (BoE) should cap annual house price inflation at 5% to take the “froth” out of future housing market booms and to prevent an unsustainable rise in debt, The Royal Institute of Chartered Surveyors (Rics) has declared. It argued that such a limit would help put a lid on price expectations and therefore discourage households from taking on excessive debt out of fear of missing the next price boom. Meanwhile, BoE Chief Economist Spencer Dale warned of responding too soon to signs of improvement in the UK economy. “There is a risk that households, businesses and financial-market participants overreact to signs of a recovery,” Dale wrote in a co-authored article with the central bank’s James Talbot published on the VoxEU.org website on Friday. “Forward guidance provides a robust framework within which the Monetary Policy Committee can explore the scope for economic expansion without putting either price stability or financial stability at risk.” Mining stocks drag on falling commodities A gauge of mining companies dropped, including BHP Billiton and Anglo American, as the price of commodities fell. Wetherspoon slumped after reporting a flat dividend as it released its annual results. Fresenius and Rhoen-Klinikum gained as the boards of the German companies endorsed the deal for Fresenius’s Helios unit to buy 43 hospitals from Rhoen-Klinikum. Carlsberg rallied after the brewer said it expects to sustain the 5% organic sales growth in the China from the first half. TDC plunged as a group of private-equity firms sold a 4.17bn-krone interest in the company. Kabel Deutschland increased after Vodafone said at least 75% of the German company’s shares supported its €7.7bn bid before Thursday’s deadline expired. Other asset classes decline Brent crude futures fell $0.491 to $112.080 per barrel on the ICE. The euro dropped 0.24% to 1.3267 US dollars.

US Market Report

Consumers have growing concerns about rise in market rates Dow Jones Industrials: 0.28% Nasdaq Composite: -0.24% S&P 500: 0.03% US stocks are trading mixed after the release of an at best equally mixed bag of economic data out on Friday morning Stateside. August retail sales data undershot expectations, although upwards revisions to the prior month´s numbers seemed to have largely compensated for that. The report blamed higher payroll taxes, limited job gains and restrained income growth for discouraging consumers. Consumer spending accounts for about 70% of the economy. The University of Michigan Confidence index was even weaker. The suvey´s director put that down to growing concerns over what the impact of higher market interest rates on economic growth and job creation would be. The Federal Reserve is turning to such economic indicators ahead of its policy meeting on September 17th-18th when it will announce whether it deems the US has recovered enough to begin tapering its $85bn per month in bond purchases. Some economists forecast bond-buying will be reduced by $10bn, to $75bn, slightly less than most had been expecting roughly one month ago. White House dismisses report on Summers as Fed Chairman Japan’s Nikkei newspaper, quoting sources, said Obama was close to naming Summers as the successor to Ben Bernanke who steps down as the head of the central bank in January. However, Whitehouse spokeswoman, Amy Brunage, denied the claims saying the president was yet to make a decision on the new Fed Chair. Summers and Fed Vice Chair Janet Yellen are considered to be the top picks for the Fed job. US and Russia discuss Syria plans The US and Russia continued their second day of talks in Geneva over a plan to have Syria hand over its chemical weapons to international control in exchange for avoiding US military action. US Secretary of State John Kerry described his talks with Russian counterpart Sergei Lavrov, in which United Nations-Arab League envoy Lakhdar Brahimi participated, as “constructive.” Syria has agreed to Russia's proposal to give up its chemical weapons - but only if certain conditions are met. US President Barack Obama has insisted that if diplomacy failed he would support a move towards military strikes against Syria’s government for allegedly using chemical weapons against civilians on August 21st. “With the Federal Reserve meeting next week to discuss potential reductions to monthly bond purchases, and with developments in Syria moving along at a snail’s pace, it is understandable that investors are tempted to hold fire for the next week or so,” said Max Cohen, a trader at Spreadex. Miners slump as precious metals fall Barrick Gold and Cliffs Natural Resources tumbled as the price of commodities declined., with Goldman Sachs having indicated that gold prices may be headed down towards the $1,050/ounce mark. Intel advanced as Jefferies raised its recommendation on the chipmaker to ‘buy’ from ‘hold’. Safeway rallied as Credit Suisse upgraded the US supermarket chain to ‘outperform’ from ‘underperform’. Consumer confidence knocked back by rate fears The Thomson Reuters/University of Michigan's preliminary reading on US consumer confidence has printed at 76.8, versus 82.1 for the month of August and the 82.0 which had been expected by economists. The forward-looking expectations guage retreated to 67.2 from 73.7. US retail sales grew by 0.2% month over month in August, well below the 0.5% rise expected. However, at first glance upwards revisions to the previous month´s figures largely made up for that undershoot. Crude futures slip slightly 10-year US Treasury yields are off by 2 basis points to the 2.89% mark. Front month West Texas crude futures are down by 0.89% to the $107.63/barrel on the NYMEX. S&P 500 - Risers Safeway Inc. (SWY) $27.90 +4.93% Regeneron Pharmaceuticals Inc. (REGN) $284.38 +3.94% GameStop Corp. (GME) $51.07 +3.28% NRG Energy Inc. (NRG) $27.12 +2.88% Tenet Healthcare Corp. (THC) $39.31 +2.82% Intel Corp. (INTC) $23.25 +2.74% Aetna Inc. (AET) $67.16 +2.22% Dominion Resources Inc. (D) $61.03 +2.09% Marathon Petroleum Corporation (MPC) $68.23 +1.94% Electronic Arts Inc. (EA) $26.89 +1.89% S&P 500 - Fallers Micron Technology Inc. (MU) $15.70 -3.09% Peabody Energy Corp. (BTU) $18.04 -2.85% Yahoo! Inc. (YHOO) $28.97 -2.29% TripAdvisor Inc. (TRIP) $73.11 -1.85% QEP Resources Inc (QEP) $28.33 -1.58% Red Hat Inc. (RHT) $52.02 -1.57% News Corp Class A (NWSA) $16.84 -1.55% Cliffs Natural Resources Inc. (CLF) $22.08 -1.52% Textron Inc. (TXT) $28.00 -1.51% Pioneer Natural Resources Co. (PXD) $184.24 -1.38% Dow Jones I.A - Risers Intel Corp. (INTC) $23.25 +2.74% Procter & Gamble Co. (PG) $78.91 +0.83% Exxon Mobil Corp. (XOM) $88.65 +0.76% International Business Machines Corp. (IBM) $192.13 +0.73% Chevron Corp. (CVX) $124.69 +0.65% Pfizer Inc. (PFE) $28.48 +0.60% Verizon Communications Inc. (VZ) $47.63 +0.58% Travelers Company Inc. (TRV) $83.56 +0.53% E.I. du Pont de Nemours and Co. (DD) $58.34 +0.48% AT&T Inc. (T) $34.52 +0.42% Dow Jones I.A - Fallers Johnson & Johnson (JNJ) $88.37 -0.72% Hewlett-Packard Co. (HPQ) $21.81 -0.71% Home Depot Inc. (HD) $74.88 -0.69% Alcoa Inc. (AA) $8.11 -0.61% Microsoft Corp. (MSFT) $32.58 -0.34% Cisco Systems Inc. (CSCO) $24.22 -0.29% United Technologies Corp. (UTX) $107.53 -0.28% General Electric Co. (GE) $23.80 -0.22% Merck & Co. Inc. (MRK) $47.75 -0.21% American Express Co. (AXP) $75.15 -0.19% Nasdaq 100 - Risers Regeneron Pharmaceuticals Inc. (REGN) $284.38 +3.94% Intel Corp. (INTC) $23.25 +2.74% Randgold Resources Ltd. Ads (GOLD) $71.15 +1.76% Bed Bath & Beyond Inc. (BBBY) $73.06 +1.33% Whole Foods Market Inc. (WFM) $57.04 +1.22% Liberty Media Corporation - Class A (LMCA) $144.74 +1.04% Sirius XM Radio Inc (SIRI) $3.81 +0.90% Autodesk Inc. (ADSK) $38.17 +0.77% Sandisk Corp. (SNDK) $60.49 +0.68% Intuitive Surgical Inc. (ISRG) $374.48 +0.48% Nasdaq 100 - Fallers Vertex Pharmaceuticals Inc. (VRTX) $78.17 -3.97% Micron Technology Inc. (MU) $15.70 -3.09% Yahoo! Inc. (YHOO) $28.97 -2.29% Tesla Motors Inc (TSLA) $162.77 -1.31% Apple Inc. (AAPL) $466.95 -1.21% Celgene Corp. (CELG) $147.83 -1.21% Starbucks Corp. (SBUX) $74.76 -1.20% Fastenal Co. (FAST) $49.60 -1.10% Citrix Systems Inc. (CTXS) $72.96 -1.03% Facebook Inc. (FB) $44.29 -1.03%

Broker Tips

ASOS: Panmure Gordon raises target from 4555p to 5950p maintaining a buy recommendation. AstraZeneca: Jefferies reduces target from 3200p to 2850p and retains a hold recommendation. Barclays: Jefferies initiates with a target of 367p and a buy recommendation. Barratt Developments: Liberum Capital raises target from 358p to 374p upgrading to buy. CareTech: Investec ups target from 177p to 214p and leaves its buy recommendation unchanged. Dunelm Group: Deutsche Bank takes target from 925p to 960p and reiterates a hold recommendation. Fiberweb: N+1 Singer downgrades from buy to hold with a target of 98p. GlaxoSmithKline: Jefferies cuts target from 1800p to 1750p keeping a hold recommendation. Home Retail Group: Deutsche Bank shifts target from 155p to 160p retaining its hold recommendation. ITV: Nomura ups target from 170p to 200p and maintains a buy recommendation. Morrison: Credit Suisse moves target from 255p to 285p keeping a neutral rating. Next: Deutsche Bank increases target from 5380p to 5600p, while staying with its hold recommendation. Pennon Group: Credit Suisse cuts target from 670p to 610p downgrading to underperform. Wetherspoon JD: Investec places its target prev.: 750p under review and keeps a buy recommendation.