Morning Euro Markets Bulletin.

ADVFN III Morning Euro Markets Bulletin

Daily world financial news Tuesday, 03 September 2013

London Market Report

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

London open: Markets edge higher early on Markets opened with small gains on Tuesday morning with stocks pausing for breath after a strong rise the day before. Stocks surged on Monday as traders took advantage of low volumes - with Wall Street closed for Labour Day - to push the London index up 1.5%. Better-than-expected manufacturing data from the UK, Eurozone and China and delays to possible US military action against Syria helped push stocks higher yesterday. However with US markets re-opening today the mood in Europe is expected to be a touch less bullish with gains likely to be limited. "With a number of key central bank meetings to come over the next couple of days, as well as a huge US jobs report on Friday, investors are understandably cautious as we head towards the end of the week," said Market Analyst Craig Erlam from Alpari. Investors will be particularly nervous about the employment report given that it comes less than two weeks before the Federal Reserve's next policy meeting at which analysts now widely expect the central bank to begin tapering its asset-purchase programme. "While the Fed isn't going to draw a conclusion on the state of the economy on that one release, it is the most current data available and could therefore prove decisive, given that the Fed until this point has been split on which move to start tapering," Erlam said. FTSE 100: Vodafone pulls back after agreeing on VZW disposal Vodafone will be in focus today after late last night reaching an agreement to sell its 45% stake in US outfit Verizon Wireless to Verizon Communications in a transaction valued at $130bn (£84bn) in cash and shares. Shareholders are expected to receive 71% of the net proceeds of the disposal. The stock was a heavy faller this morning, pulling back after a strong rise over the last few days. Real estate groups were under pressure this morning after Deutsche Bank downgraded stocks and targets across the sector. Land Securities and British Land were among the worst performers after the bank cut its ratings for both to 'hold'. Hammerson, whose rating was kept at 'hold', was out of favour after having its target cut. Security solutions firm G4S was also lower after Credit Suisse lowered its recommendation from 'outperform' to 'neutral', saying that the stock has re-rated and is now trading at a premium to its historic average. Leading the upside was Primark owner and food ingredients group AB Foods after Exane BNP Paribas raised the stock to 'outperform'. Mining group Rio Tinto was extending gains this morning after yesterday reporting the first shipment of iron ore from its expanded operations in Western Australia. "We are attracted by Rio's value, quality volume growth and cost cutting potential," said analysts at UBS this morning. FTSE 250: Genus drops after full-year results Genus fell sharply this morning despite increasing its annual dividend by 10%and saying it expected revenue growth to improve as it reported a rise in underlying profits. The animal genetics company's adjusted pre-tax profit rose 2% to £47.2m in the year ended June 30th even as feed costs increased. Statutory profit before tax however fell 30% to £38.1m because of a fall in the value of biological assets under accounting rules. Spirent Communications rose after saying its Chief Executive Officer Bill Burns will step down from the company with immediate effect. Chief Financial Officer Eric Hutchinson will replace Burns in the interim while the technology firm searches for a successor.

FTSE 100 - Risers Associated British Foods (ABF) 1,920.00p +2.24% BT Group (BT.A) 344.70p +1.92% easyJet (EZJ) 1,308.00p +1.87% Centrica (CNA) 394.90p +1.54% Tullow Oil (TLW) 1,033.00p +1.47% Shire Plc (SHP) 2,427.00p +1.21% Antofagasta (ANTO) 895.50p +1.13% Experian (EXPN) 1,152.00p +1.05% Rexam (REX) 502.00p +1.05% HSBC Holdings (HSBA) 694.30p +1.05% FTSE 100 - Fallers Land Securities Group (LAND) 893.00p -1.71% Vodafone Group (VOD) 210.15p -1.43% British Land Co (BLND) 559.50p -1.32% Carnival (CCL) 2,397.00p -1.07% Fresnillo (FRES) 1,265.00p -0.78% Pearson (PSON) 1,290.00p -0.69% Petrofac Ltd. (PFC) 1,401.00p -0.64% Prudential (PRU) 1,109.00p -0.63% G4S (GFS) 259.80p -0.42% AstraZeneca (AZN) 3,169.50p -0.41% FTSE 250 - Risers Domino Printing Sciences (DNO) 710.50p +3.65% TalkTalk Telecom Group (TALK) 256.00p +3.23% Spirent Communications (SPT) 132.20p +2.80% F&C Asset Management (FCAM) 98.15p +2.67% Rank Group (RNK) 160.90p +2.48% Carpetright (CPR) 663.00p +2.47% Pace (PIC) 298.00p +2.23% International Personal Finance (IPF) 624.00p +1.79% Edinburgh Dragon Trust (EFM) 262.60p +1.78% Hays (HAS) 106.30p +1.72% FTSE 250 - Fallers Genus (GNS) 1,350.00p -8.72% JPMorgan Indian Inv Trust (JII) 290.50p -3.17% Great Portland Estates (GPOR) 529.00p -2.85% Capital & Counties Properties (CAPC) 317.40p -2.34% Smith (DS) (SMDS) 264.10p -2.19% Derwent London (DLN) 2,338.00p -1.81% Shaftesbury (SHB) 595.50p -1.16% Rathbone Brothers (RAT) 1,597.00p -1.11% Debenhams (DEB) 107.40p -1.01% Fidessa Group (FDSA) 2,127.00p -0.98% Event Calendar FINALS Dechra Pharmaceuticals, Mcbride INTERIMS @UK, Globaltrans Investment GDR (Reg S), Goals Soccer Centres, Hydro International, Johnson Service Group Total Produce INTERIM DIVIDEND PAYMENT DATE St. Modwen Properties GMs Thor Mining AGMS Avarae Global Coins, Downing Absolute Income VCT 2, Greene King,Midas Income & Growth Trust, Smith (DS), Tern INTERNATIONAL ECONOMIC ANNOUNCEMENTS Markit PMI (US) (14:58) Construction spending (US) (15:00) ISM manufacturing PMI (US) (16:00) Producer price index (EZ) (10:00) Australia central bank policy decision (AUS) China NBS non-manufacturing PMI (CN) UK ECONOMIC ANNOUNCEMENTS BRC Total sales (00:01) Construction PMI (09:30)

Europe Market Report

FTSE 100 Euronext Dax perf CAC 40

Europe open: Stocks mixed ahead of US manufacturing data - US manufacturing data in focus - Spanish bank to be bought by consortium - Nokia's shares soar on Microsoft deal FTSE 100: 0.20% DAX: -0.05% CAC40: -0.26% FTSE MIB: 0.32% IBEX 35: 0.36% Stoxx 600: 0.22% European stocks were mixed as investors awaited the release of US manufacturing and construction data. The ISM US Manufacturing report for August is anticipated to fall to 54 from the prior month's 55.4 when released at 10:00 New York time. A reading over 50 signals expansion. US construction spending for July is expected to show a 0.3% rise, compared to a fall of 0.6% in June. It comes a day after purchasing managers' index (PMI) reports showed manufacturing expanded in the UK, the Eurozone and China. Policymakers have been turning to economic data to see whether the US has recovered enough for the Fed to begin scaling back its $85bn per month in bond purchases. Economists predict the central bank will start trimming its stimulus at the highly awaited policy meeting on September 17th to 18th. "This month could prove to be one of the most important for financial markets this year as many expect the Federal Reserve to start the tapering process in two weeks or so," said Ishaq Siddiqi, Market Strategist at ETX Capital. In the UK, the British Retail Consortium said the total value of retail sales rose 3.6% year-on-year in August after a 3.9% increase in July. Growth in home items, including furniture and flooring sales, were the best performers while food was the slowest category after a bumper year during the Olympics when people stocked up on celebratory fare for the event. Private equity groups to buy Spanish bank A consortium of private equity groups are set to buy an arm of Nova Galicia, one of Spain's nationalised lenders, in what would mark the first significant foreign investment in the country's banking system since the start of the financial crisis. The consortium, which includes US buyout firm Centerbridge and London-based Anacap, are in late stage talks to acquire Nova Galicia's subsidiary Evo Banco. The deal is expected to close in the next two weeks, people familiar with the situation told the Financial Times. It would be the first time a lender owned by the Frob, Spain's state bank rescue fund, has been bought by a foreign investor since the crisis prompted the country's government to request a European bailout of its financial sector last year. Nokia gains on Microsoft deal Nokia shares soared after Microsoft agreed to buy its struggling mobile phone business for $7bn. Vodafone declined as it forecast an adjusted operating profit of £5bn for 2014 after Verizon Communications said it would acquire the UK telecommunications company's stake in their joint venture Verizon Wireless. Suedzucker AG fell after Exane BNP Paribas SA reduced its rating of the maker of sugar, starch and bakery additives to 'underperform' from 'neutral', saying the company will require significant restructuring to prosper amid tough competition. Dufry advanced as the operator of duty-free stores said it signed long-term contracts with airports in Brazil and is investing $250m to $275m in its projects in the country. Other asset classes slide The euro fell 0.20% against the 1.3166 US dollar. Brent crude slipped $0.096 to $114.220 per barrel on the ICE.

US Market Report

The US Markets were closed yesterday.

Newspaper Round Up

Tuesday newspaper round-up: Microsoft, Spain, Co-op Bank Microsoft is to buy Nokia's mobile phone business and license its patents for 5.44bn euros (7.2bn dollars), in an all-cash deal that will reshape the telecoms industry on two continents. The US company will pay 3.79bn euros for "substantially all" of Nokia's phone unit and 1.65bn dollars to license its patents, in a big bet from Steve Ballmer, Microsoft's outgoing Chief Executive, that the Finnish group's mobile devices can rival those of Apple and Samsung Electronics, the Financial Times says. Private equity groups are close to acquiring part of one of Spain's nationalised lenders in what would be the first significant foreign investment in the country's banks since the financial crisis, the Financial Times reports. A good August for shopkeepers has added to the growing weight of evidence that confidence is returning to the high street. Retail sales rose by 3.6% last month, or 1.8% excluding new stores and closed stores, according to the British Retail Consortium. The good cheer even spread as far as furniture stores, which suffered a dire 2012, according to The Times. British military chiefs are being ejected from US meetings about Syria in the first direct consequence of David Cameron's refusal to join military action. The role of senior British officers based at US Central Command in Tampa, Florida, has been downgraded because they cannot be trusted with high-level intelligence about a conflict with which they are no longer involved, military sources say, The Times reports. Co-op Bank is facing a £3.6bn gap between the value it places on its loan portfolio and what they would be worth if it had to offload the book, it can be disclosed. The struggling lender downgraded the "fair value" of its loan book by £4.2bn between the end of last year and June, wiping nearly 13pc off the value of its £29bn portfolio, The Daily Telegraph writes. British exporters face jitters in oil-rich sheikhdoms in the Persian Gulf after the Parliament's failure to back military intervention in Syria, experts are warning. Gulf Arab states such as Saudi Arabia, the United Arab Emirates (UAE) and Qatar, which either oppose the Syrian government or are actively supporting the opposition, are among the UK's top 50 export markets, The Daily Telegraph points out. Small businesses barely benefited from the Bank of England's Funding for Lending scheme in its first year of operation as most of the gains went to mortgage borrowers.Official figures showed that the 41 banks signed up to the FLS increased lending in the three months to June by £1.6bn, but it was not enough to offset the £3.9bn of withdrawals over the previous nine months. The rise in the second quarter was entirely accounted for by "lending to individuals", particularly in mortgages, the Bank said, according to The Daily Telegraph.