Morning Euro Markets Bulletin.

ADVFN III Morning Euro Markets Bulletin

Daily world financial news Monday, 02 September 2013

London Market Report

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

London open: Chinese PMI boosts miners, Vodafone jumps on Verizon talks Delays to a potential military strike against Syria and some better-than-expected economic data from China gave stock markets a big boost in early trading on Monday. China's official manufacturing purchasing managers' index (PMI) rose to the 51.0 point mark in August, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing in Beijing. The consensus estimate had been for a reading of 50.6 and comes after a print of 50.3 in July. Mining stocks were lifted by the strong figures from Asia's top metals user, while heightened M&A speculation at Vodafone lifted the FTSE 100 by around 1.3% in morning trade. Fears of imminent US military action against Syria were calmed over the weekend after President Barack Obama said he would seek approval from Congress before signing off on a strike. "Obama, like his UK counterpart, David Cameron, is likely to face staunch opposition from both inside and outside his party, to military action, with memories of the hugely unpopular war in Iraq still fresh in people's memories," said Market Analyst Craig Erlam from Alpari. "Investors are unsurprisingly pleased with this delay, with the risk aversion seen towards the end of last week subsiding and money pouring back into European stocks," he said. FTSE 100: Vodafone jumps on "advanced discussions" Vodafone jumped early on after saying it was in "advanced" talks with Verizon Communications about selling its 45% stake in Verizon Wireless for $130bn (£84bn). Verizon Communications would mainly pay in cash and shares. Mining stocks were performing well this morning after data from China impressed. Vedanta Resources was a high riser after Liberum Capital upgraded the stock to 'buy', with Anglo American, Glencore Xstrata and Antofagasta following closely behind. Diversified mining group Rio Tinto was also in demand after loading the first shipment of iron ore from its expanded port, rail and mine operations in Australia. Rio said this was a "significant milestone" and marks the start of commissioning of the expansion programme, which is expected to see the company's iron ore operations in Western Australia increase capacity to 290m tonnes a year. Oil stocks were out of favour as crude prices edged lower. West Texas oil continues to pull back after hitting a two-year high last week on concerns that tensions in Syria could spill over to surrounding regions, leading to potential supply disruptions across the Middle East. Producers BP and Amec were in the red early on. Tullow Oil however managed to buck the trend, rising in morning trade despite saying it has plugged and abandoned its Buzio-1 exploration well offshore Mozambique after failing to encounter hydrocarbons.

FTSE 100 - Risers Anglo American (AAL) 1,535.00p +3.82% Vedanta Resources (VED) 1,206.00p +3.79% Rio Tinto (RIO) 3,016.50p +3.55% Vodafone Group (VOD) 213.50p +3.52% International Consolidated Airlines Group SA (CDI) (IAG) 294.50p +2.86% BHP Billiton (BLT) 1,931.00p +2.82% Antofagasta (ANTO) 878.50p +2.75% Standard Life (SL.) 340.20p +2.72% BT Group (BT.A) 334.00p +2.67% Glencore Xstrata (GLEN) 313.30p +2.65% FTSE 100 - Fallers Royal Dutch Shell 'A' (RDSA) 2,072.50p -0.72% Royal Dutch Shell 'B' (RDSB) 2,159.00p -0.64% BP (BP.) 445.50p -0.16% FTSE 250 - Risers Ferrexpo (FXPO) 175.60p +5.66% Inmarsat (ISAT) 724.50p +4.24% Petra Diamonds Ltd.(DI) (PDL) 125.00p +4.08% Diploma (DPLM) 623.50p +3.92% Henderson Group (HGG) 170.90p +3.58% International Personal Finance (IPF) 615.00p +3.27% Menzies(John) (MNZS) 778.00p +3.11% Centamin (DI) (CEY) 44.91p +3.10% KCOM Group (KCOM) 87.10p +3.08% Salamander Energy (SMDR) 131.90p +3.05% FTSE 250 - Fallers Bumi (BUMI) 212.90p -2.16% Euromoney Institutional Investor (ERM) 1,190.00p -1.00% Ocado Group (OCDO) 328.90p -0.48% United Drug (UDG) 337.40p -0.47% Oxford Instruments (OXIG) 1,423.00p -0.42% African Barrick Gold (ABG) 189.20p -0.42% DCC (DCC) 2,554.00p -0.20% Michael Page International (MPI) 462.10p -0.17% Ted Baker (TED) 1,867.00p -0.16% Xaar (XAR) 812.00p -0.12% UK Event Calendar Monday September 02 INTERIMS Biome Technologies, Michelmersh Brick Holdings INTERIM DIVIDEND PAYMENT DATE Impellam Group INTERNATIONAL ECONOMIC ANNOUNCEMENTS US Markets closed in observance of Labour Day bank holiday China HSBC Manufacturing PMI Eurozone “final” manufacturing PMI (EZ) (08:58) German FM briefs budgetary committee on EU/IMF aid programme for Greece AGMS Berkeley Group Holdings (The), Consort Medical, Mortice Ltd. (DI), Polar Capital Technology Trust QUARTERLY PAYMENT DATE JPMorgan, Claverhouse Inv Trust FINAL DIVIDEND PAYMENT DATE BT Group, Solid State UK ECONOMIC ANNOUNCEMENTS Markit manufacturing PMI (09:28)

Europe Market Report

FTSE 100 Euronext Dax perf CAC 40

Europe open: Stocks advance as Syria fears ease - Syria military strike delayed - Eurozone/China manufacturing grows - Commodities gain FTSE 100: 1.28% DAX: 1.49% CAC 40: 1.55% FTSE MIB: 1.42% IBEX 35: 2.00% Stoxx 600: 1.43% European equities rose as fears over imminent military action on Syria eased after US President Barack Obama said he would seek congressional authorisation before launching a strike. Syrian Deputy Foreign Minister Faisal Mekdad accused Obama of indecision and hesitation as the US leader delayed a military response to last month's chemical weapons attack near Damascus until after a congressional vote. Obama's announcement is likely to delay any strike for at least nine days. He faced tough questions from lawmakers on Sunday when he tried to win over Congress. Syria's government has continued to deny it used chemical weapons against civilians on August 21st. "Barack Obama's decision to offer the vote to Congress when it returns next week reduces the likelihood that we'll see any military response unless there is hard evidence that the chemical attacks were carried out by the Assad regime," said Craig Erlam, Market Analyst at Alpari Research. "Obama, like his UK counterpart, David Cameron, is likely to face staunch opposition from both inside and outside his party, to military action, with memories of the hugely unpopular war in Iraq still fresh in people's memories. "Investors are unsurprisingly pleased with this delay, with the risk aversion seen towards the end of last week subsiding and money pouring back into European stocks." Chinese and Eurozone manufacturing grows Chinese manufacturing activity expanded in August, pointing to signs the world's second largest economy is strengthening after a two-quarter slowdown. The manufactory purchasing managers' index (PMI) climbed to 50.1 last month from 47.7 in July, according to HSBC Holdings Plc and Markit Economics. It was the biggest increase in three years and the first reading above 50 since April. A reading above 50 signals growth. A separate report from Markit showed the Eurozone's manufacturing PMI rose to a 26-month high of 51.4 in August, compared to 50.5 in July, driven by growth in Germany, the Netherlands, Italy, Austria and Ireland. Mining stocks surge A gauge of miners rallied including Rio Tinto and Anglo American as the price of commodities climbed. Copper for three-month delivery on the London Metal Exchange jumped to $7,235 a metric ton, after falling 3.5% last week. Vodafone gained after saying it was in advanced talks with Verizon Communications about selling its US business to Verizon for $130bn. Alstom advanced after the French multinational conglomerate signed a contract with Minnesota Power to deliver an emission control system which will help reduce the utility company's emissions.

US Market Report

US close: Syria concerns, economic data hits stocks - US still deciding on Syria strike - Confidence, spending data fails to impress - Krispy Kreme disappoints with Q2 earnings Dow Jones: -0.21% Nasdaq: -0.84% S&P 500: -0.32% Disappointing economic data and uncertainty regarding a possible military strike against Syria dampened US stocks on Friday with benchmarks ending August on a dull note. A three-day weekend in the States was also providing more of a reason for investors to scale back risk appetite and trim positions with Wall Street closed on Monday for Labour Day. Both the Dow Jones and S&P 500 recorded their worst monthly performance since May 2012, and the choppiness on global equity markets isn't expected to fade next week. Analysts at Barclays said: "With a number of significant event risks ahead - such as geopolitical risk in the Middle East, uncertainty about US economic data and the Fed's monetary policy, the possible announcement of a nomination for the new Fed Chairman by President Obama and federal elections in Germany, among others - market volatility, which has risen into late summer, is likely to persist in September." Tensions between Syria and the West escalated on Friday after US intelligence was said to have "high confidence" that Bashar al-Assad's regime was responsible for last week's chemical weapons attack that killed over 1,400 people in Damascus. US Secretary of State John Kerry condemned the "indiscriminate and inconceivable horror of chemical weapons", though President Barack Obama has said he has not made a final decision on whether or not to take action. UK Prime Minister David Cameron meanwhile on Thursday lost an initial vote to intervene - oppositions decided to wait for firm evidence from UN inspectors on the alleged use of chemical weapons by the Bashar al-Assad regime. French President Francois Hollande signalled that he could be the main ally to the US in taking action against the Syrian government, saying that the UK vote made no difference to France's position. Economic data comes up short Consumer spending edged just 0.1% higher in July, down from a revised 0.6% gain the month before and below the 0.3% increase expected by analysts. Personal incomes only improved by 0.1% as well last month, slowing from the 0.3% rise in June and the 0.2% forecast. The core personal consumption expenditure price index meanwhile - the Federal Reserve's measure of inflation - rose by 0.1% in July, down from 0.2% in June and below the 0.2% increase expected. Paul Dales, Senior US Economist at Capital Economics, said that the July data suggests that real consumption in the third quarter may struggle to match the 1.8% growth seen in the second, especially given the recent rise in oil prices. "What's more, the recent rise in oil prices may restrain real growth as households will pay more to buy the same amount of gasoline. At the moment, incomes aren't rising fast enough to support faster consumption growth," he said. The closely-watched University of Michigan/Thomason Reuters consumer confidence index fell to a four-month low of 82.1 in August, pulling back from a six-year high of 85.1 the month before. Nevertheless this was still higher than the preliminary August figure of 80 and ahead of the 80.5 consensus forecast. The Chicago purchasing mangers' index (PMI) rose from 52.3 to 53.0 in August, as expected. Krispy Kreme fails to meet forecasts Krispy Kreme Doughnuts tumbled after its second-quarter adjusted earnings came in at 14 cents a share, missing the 16 cents estimate by analysts. Revenue grew by 10% to $112.7m but also missed forecasts. Salesforce.com Inc. surged after the company issued third-quarter sales and earnings forecasts that beat analysts' estimates. Exxon Mobil Corp. tumbled as the price of oil declined after a delay of a possible imminent strike in Syria was delayed. S&P 500 - Risers Salesforce.Com Inc. (CRM) $49.13 +12.55% Apache Corp. (APA) $85.68 +8.95% Sears Holdings Corp. (SHLD) $44.24 +6.45% Murphy Oil Corp. (MUR) $67.42 +2.45% Western Digital Corp. (WDC) $62.00 +2.11% Archer-Daniels-Midland Co. (ADM) $35.21 +1.15% Quest Diagnostics (DGX) $58.62 +1.14% Walgreen Co. (WAG) $48.07 +1.03% Praxair Inc. (PX) $117.40 +0.99% NRG Energy Inc. (NRG) $26.25 +0.96% S&P 500 - Fallers Electronic Arts Inc. (EA) $26.64 -3.37% Advanced Micro Devices Inc. (AMD) $3.27 -3.25% Janus Capital Group Inc. (JNS) $8.36 -3.02% D. R. Horton Inc. (DHI) $17.85 -2.99% PulteGroup Inc. (PHM) $15.39 -2.96% Frontier Communications Co. (FTR) $4.33 -2.91% Lennar Corp. Class A (LEN) $31.81 -2.48% Teradata Corp. (TDC) $58.56 -2.19% Adt Corp (ADT) $39.83 -2.16% Iron Mountain Inc. (IRM) $25.80 -2.16% Dow Jones I.A - Risers Wal-Mart Stores Inc. (WMT) $72.98 +0.76% Procter & Gamble Co. (PG) $77.89 +0.75% AT&T Inc. (T) $33.83 +0.53% Merck & Co. Inc. (MRK) $47.29 +0.40% Pfizer Inc. (PFE) $28.21 +0.39% 3M Co. (MMM) $113.58 +0.23% Coca-Cola Co. (KO) $38.18 +0.21% General Electric Co. (GE) $23.14 +0.13% Chevron Corp. (CVX) $120.43 +0.05% Caterpillar Inc. (CAT) $82.54 +0.01% Dow Jones I.A - Fallers Alcoa Inc. (AA) $7.70 -1.41% Unitedhealth Group Inc. (UNH) $71.74 -0.97% Boeing Co. (BA) $103.92 -0.96% Verizon Communications Inc. (VZ) $47.38 -0.92% Hewlett-Packard Co. (HPQ) $22.34 -0.80% Home Depot Inc. (HD) $74.49 -0.75% Cisco Systems Inc. (CSCO) $23.31 -0.60% McDonald's Corp. (MCD) $94.36 -0.53% Microsoft Corp. (MSFT) $33.40 -0.45% Travelers Company Inc. (TRV) $79.90 -0.44% Nasdaq 100 - Risers Sears Holdings Corp. (SHLD) $44.24 +6.45% Nuance Communications Inc. (NUAN) $19.09 +4.26% Western Digital Corp. (WDC) $62.00 +2.11% Tesla Motors Inc (TSLA) $169.00 +1.77% Vodafone Group Plc ADS (VOD) $32.35 +1.73% Monster Beverage Corp (MNST) $57.39 +0.72% Seagate Technology Plc (STX) $38.32 +0.60% Whole Foods Market Inc. (WFM) $52.75 +0.53% Intuitive Surgical Inc. (ISRG) $386.52 +0.50% Sigma-Aldrich Corp. (SIAL) $82.47 +0.46% Nasdaq 100 - Fallers Baidu Inc. (BIDU) $135.53 -3.03% Green Mountain Coffee Roasters Inc. (GMCR) $86.31 -2.78% Vertex Pharmaceuticals Inc. (VRTX) $75.15 -2.72% Activision Blizzard Inc. (ATVI) $16.32 -2.57% eBay Inc. (EBAY) $49.99 -1.96% Celgene Corp. (CELG) $139.98 -1.82% Symantec Corp. (SYMC) $25.61 -1.69% Randgold Resources Ltd. Ads (GOLD) $78.02 -1.65% Altera Corp. (ALTR) $35.17 -1.46% Alexion Pharmaceuticals Inc. (ALXN) $107.76 -1.41%

Newspaper Round Up

Monday newspaper round-up: Oil prices, Cameron, easyJet The oil price could spike to 150 dollars a barrel if the troubles in Syria engulf the Middle East, City analysts predict, while motorists are being warned of a feed-through into new "record" prices at the pumps. President Barack Obama may have pulled back from an imminent airstrike this weekend, but the markets are still readying for US action, with traders aware that Obama has drawn a "red line" over the use of chemical weapons, The Daily Telegraph explains. Senior figures from each of the main parties urged the Prime Minister to seize on President Obama's decision to delay military action. David Cameron's swift rejection of action after his parliamentary defeat last week was taken to mean that, even in the event of a second chemical attack by President Assad's regime, Britain would remain on the sidelines. The decision was said to have shocked even Ed Miliband, the Labour leader, says The Times. Britain's high street has enjoyed its best pick-up in sales since February, as the resurgent housing sector sparked the strongest performance from the homewares sector in years. That helped overall like-for-like sales rise 3.5% in August, according to the monthly tracker from accountants BDO, The Daily Telegraph reports. Holidaymakers seeking bargains in struggling Eurozone countries such as Spain and Portugal have lifted easyJet. Figures released this week will show ticket sales are growing and jets are flying almost full. Among the most popular destinations for flights by the budget operator, which entered the FTSE 100 list of the UK's biggest companies earlier this year, are Alicante, Malaga and Faro, The Daily Mail writes. A national strike of postal workers aimed at derailing the privatisation of Royal Mail will become more likely today when the Communication Workers Union reveals plans to ballot 115,000 staff, The Times reports. Egypt's state prosecutor has sent Mohamed Morsi, the ousted Islamist president, for trial on charges of inciting violence that led to the killing of at least 10 people during protests outside the presidential palace in December. The prosecutor also referred to court on similar charges 14 other members of Mr Morsi's Muslim Brotherhood. No date has been set for the trial, according to the Financial Times.