ADVFN III Morning Euro Markets Bulletin.

ADVFN III Morning Euro Markets Bulletin

Daily world financial news Thursday, 03 October 2013

London Market Report

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

Stocks snap losing streak after Chinese data Markets opened with small gains on Thursday morning as investors turned their focus away from another day of the US government shutdown and instead concentrated on a raft of economic data. While the continuing budget impasse Stateside will lead to non-essential government agencies being shut for a third straight day, the FTSE 100 snapped a four-day losing streak this morning, bouncing off a one-month low after figures showed an improvement in services activity in China. PMIs in focus China's official non-manufacturing purchasing managers' index rose from 53.9 to a six-month high of 55.4 in September, according to the National Bureau of Statistics, strengthening the third-quarter outlook for the world's second-largest economy. Market Analyst Craig Erlam from Alpari said: "This is just another sign that the government's targeted stimulus efforts, which were announced a few months ago in order to combat the slowing growth in the economy and achieve its minimum 7% growth target, are having the desired effect on the economy." He said that growth this year is now likely to be in line with the government's initial target of 7.5%, easing concerns over a 'hard landing' for the Chinese economy. Closer to home, there will be the final reading of the Eurozone services PMI for September which is expected to remain steady at 52.1, and the final estimate of the Eurozone composite PMI services and manufacturing which is also forecast to hold at 52.1. Similarly, the UK services PMI is predicted to remain at 60.5 in August. Shutdown continues as budget talks prove "futile" Over the in the States, the shutdown means that no data will be released by the government or its agencies, with jobless claims figures and Friday's highly-anticipated employment report now expected to be delayed. However, the ISM survey measuring activity in the services sector will still be on the agenda and is expected to fall from 58.6 to 57. President Barack Obama last night met for face-to-face talks with Congress for the first time since the shutdown but both sides failed to come to an agreement over the budget. Financial Sales Trader Alex Conroy from Spreadex said that the meeting however "proved futile" with both sides unwilling to budge on positions held before the shutdown. "This failure in bi-partisan politics could have wider implications than merely shutting down the US government," he said. The focus is now turning to the deadline of the debt ceiling on October 17th. If an agreement is not made to raise this limit, then the government will run out of the cash and will likely default on its debt obligations. FTSE 100: easyJet, Aviva and BP provide a lift easyJet jumped after raising its annual profit guidance on the back of strong demand in the second half. In a trading update ahead of its results for the year to the end of September 2013, the low-cost airline said it expects pre-tax profit of between £470m and £480m compared with the previous guidance of £450m to £480m. Insurance group Aviva also gained after completing the sale of its US business for a higher amount than it first expected. It will receive proceeds of $2.6bn £1.7bn from the sale of its US life and annuities business to Bermuda-based Athene Holdings, around $0.8bn more than it had announced last December. British oil major BP rose after saying it is "extremely pleased" with the decision by the US appeals court to halt some payments related to claims over the giant oil spill in the Gulf of Mexico back in 2010. BP had asked the courts for compensation assessment standards to be tightened to limit compensation settlements following the Deepwater Horizon disaster. Sports Direct International was heading the other way after its Chief Executive Dave Forsey and Finance Director Bob Mellors each netted £6.4m after selling shares from a bonus plan.

FTSE 100 - Risers Aberdeen Asset Management (ADN) 385.00p +2.94% Aviva (AV.) 416.30p +2.16% Unilever (ULVR) 2,351.00p +1.38% Tesco (TSCO) 362.90p +1.37% easyJet (EZJ) 1,331.00p +1.29% RSA Insurance Group (RSA) 119.60p +1.18% Mondi (MNDI) 1,055.00p +1.15% Sainsbury (J) (SBRY) 389.70p +1.14% BP (BP.) 437.15p +1.12% Shire Plc (SHP) 2,473.00p +1.10% FTSE 100 - Fallers Sports Direct International (SPD) 696.00p -1.76% Randgold Resources Ltd. (RRS) 4,332.00p -1.46% Fresnillo (FRES) 924.50p -1.12% Standard Chartered (STAN) 1,451.00p -1.02% United Utilities Group (UU.) 698.50p -0.92% SABMiller (SAB) 3,008.50p -0.89% Persimmon (PSN) 1,093.00p -0.82% Vedanta Resources (VED) 1,082.00p -0.73% BG Group (BG.) 1,174.50p -0.72% Antofagasta (ANTO) 818.50p -0.67% FTSE 250 - Risers Alent (ALNT) 362.50p +2.55% CSR (CSR) 534.00p +1.91% Moneysupermarket.com Group (MONY) 152.20p +1.81% Enterprise Inns (ETI) 154.50p +1.64% BTG (BTG) 386.50p +1.58% Bwin party Digital Entertainment (BPTY) 122.10p +1.33% UDG Healthcare Public Limited Company (UDG) 319.20p +1.30% Rightmove (RMV) 2,368.00p +1.28% Afren (AFR) 138.50p +1.24% Premier Farnell (PFL) 220.50p +1.24% FTSE 250 - Fallers Unite Group (UTG) 375.90p -3.17% Ophir Energy (OPHR) 312.90p -1.73% Kazakhmys (KAZ) 257.80p -1.60% Petra Diamonds Ltd.(DI) (PDL) 116.50p -1.60% AL Noor Hospitals Group (ANH) 818.00p -1.45% Betfair Group (BET) 986.50p -1.35% PayPoint (PAY) 1,076.00p -1.28% Centamin (DI) (CEY) 44.14p -1.25% African Barrick Gold (ABG) 157.10p -1.13% Redrow (RDW) 237.00p -1.04%

UK Event Calendar

INTERIMS Ted Baker INTERIM DIVIDEND PAYMENT DATE Amlin, Churchill China, Croda International, Greencore Group, Hammerson, Holders Technology, Phoenix Group Holdings (DI), Plus500 Ltd (DI), Shire Plc, Tullow Oil QUARTERLY PAYMENT DATE GlaxoSmithKline INTERNATIONAL ECONOMIC ANNOUNCEMENTS Bloomberg Consumer Confidence (US) (14:45) Continuing Claims (US) (13:30) Factory Orders (US) (15:00) Goods Orders (US) (15:00) Initial Jobless Claims (US) (13:30) ISM Non-Manufacturing (US) (15:00) ISM Services (US) (15:00) PMI Composite (EU) (09:00) PMI Composite (GER) (08:55) PMI Services (EU) (09:00) PMI Services (GER) (08:55) Retail Sales (EU) (10:00) GMS Daily Mail and General Trust 'Ord' Shares, Daily Mail and General Trust A (Non.V) IMSS Ashmore Group AGMS Investment Company, Jupiter European Opportunities Trust TRADING ANNOUNCEMENTS Halfords Group UK ECONOMIC ANNOUNCEMENTS Official Reserves (09:30) PMI Composite (09:30) PMI Services (09:30) FINAL DIVIDEND PAYMENT DATE Diageo, Victoria

Europe Market Report

FTSE 100 Euronext Dax perf CAC 40

Stocks rise ahead of Eurozone PMI data FTSE 100: 0.25% DAX: 0.01% CAC 40: -0.23% FTSE MIB: 0.12% IBEX 35: -0.02% Stoxx 600: 0.05% European stocks were mixed on Thursday before the release of manufacturing and services data in the euro-area and after a report showed China's services sector expanded at the fastest rate in six months. Activity in China's services industry grew at the fastest rate in six months as government stimulus efforts continued to support growth in the world's second-largest economy. The Chinese services purchasing managers' index for September jumped to 55.4, up from the prior month's reading of 53.9 and over the 50 reading that signals expansion. In Europe, the PMI Composite, which includes manufacturing and services, is expected to show a reading of 52.1 in September, unchanged from August, according to consensus. The data comes a day after European Central Bank President Mario Draghi said Europe was recovering albeit at a slow pace.His remarks followed an announcement by the central bank to keep its benchmark interest rate unchanged at 0.5% until it sees further signs of recovery in the Eurozone. The Bureau of Labor Statistics warned on its website that "the BLS will not collect data, issue reports, or respond to public inquiries. Updates to the site will start again when the Federal government resumes operations. Revised schedules will be issued as they become available". Italy’s struggle not over yet, says economist Italian Prime Minister Enrico Letta may have won the battle to keep his government together on Wednesday but he faces a bigger struggle to revive the country’s stale economy that threatens to weigh on the rest of the Eurozone. Letta yesterday won a confidence vote in parliament after centre-right leader Silvio Berlusconi made last minute U-turn and abandoned his bid to bring down the leading coalition party. Berlusconi had over the weekend ordered the resignation of ministers from his People of Freedom party in the coalition but back down after senators refused to support his move. The Letta government has to make some unpopular choices," Tito Boeri, an economist with Bocconi University in Milan, told the Wall Street Journal. "But with such a complex political situation, it becomes even harder. Letta had zero probability of passing strong reforms before. Now it is probably slightly more positive, but it is still very difficult." easyJet gains after raising guidance easyJet soared after lifting its full-year profit guidance following a strong second half. Aviva rallied after the insurer said it received $2.6bn from the sale of its US life-insurance and annuities business to Apollo Global Management. BP advanced after a US appeals court halted some payments related to claims against the company over the Gulf of Mexico oil spill in 2010. Unicredit jumped after the Italian bank said it offered to buy Rabobank Groep’s Polish unit Bank Gospodarki Zywnosciowej.

US Market Report

Debt-ceiling fears grip markets as stocks fall Dow Jones: -0.39% S&P 500: -0.07% Nasdaq: -0.08% US benchmarks picked up off their lows but still finished Wednesday's session with moderate losses as concerns about the looming debt-ceiling deadline and the ongoing budget impasse in Washington held back risk appetite. Meanwhile, a report from the ADP Research Institute today showed that companies in the US boosted payrolls by 166,000 in September, up slightly from a 159,000 gain in August but missing estimates for a rise of 180,000. “With the release of the official payrolls figures delayed until the government shutdown is resolved, this ADP report will take on a much greater significance than normal in the markets,” according to analysts at Capital Economics. Shutdown in focus as debt-ceiling deadline looms The partial shutdown of the US government continued into its second day on Wednesday as Democrats and Republicans wrangle over the budget. The first shutdown in 17 years has seen some 800,000 federal workers put on unpaid leave as the government shuts down non-essential agencies indefinitely. Though estimates across the market differ substantially, a shutdown is expected to shave 0.1 percentage point from economic growth, according to Bloomberg’s median estimate of economists, with costs rising if the closure continues. While investors continue to gauge the impact of the shutdown on economic growth, the focus is now turning to the deadline of the debt ceiling on October 17th. If an agreement is not made to raise this limit, then the government will run out of the cash and will likely default on its debt obligations. Treasury Secretary Jack Lew said this week that the government has begun to use the last of its "extraordinary measures" to make sure it stays below the ceiling. Microsoft gains as shareholders call for Gates exit Shares in software giant Microsoft were higher after shareholders lobbied for the resignation of Chairman and founder, Bill Gates. According to reports, three of the company's top-20 shareholders - who together own over a 5% stake - called for his exit. Aluminium group Alcoa declined after Deutsche Bank reduced its rating to ‘sell’ from ‘hold’, saying it expects aluminium prices to fall. Monsanto was moving lower after reporting a wider-than-expected fourth-quarter loss of 47 cents per share, compared with 44 cents the year before. Global Payments rose after the bank-card processor said it expects cash earnings in 2014 will be as much as $4.05 a share, up from a previous estimate of $4. Banking stocks were putting a mixed performance with Bank of America, Citigroup and JPMorgan Chase & Co making decent gains but Wells Fargo and Goldman Sachs finishing lower. S&P 500 - Risers Tenet Healthcare Corp. (THC) $43.90 +6.12% Autodesk Inc. (ADSK) $42.55 +5.09% Mosaic Company (MOS) $45.60 +3.66% Cliffs Natural Resources Inc. (CLF) $21.45 +3.08% United States Steel Corp. (X) $21.63 +2.95% Priceline.Com Inc. (PCLN) $1,067.38 +2.80% Seagate Technology Plc (STX) $45.95 +2.80% Sandisk Corp. (SNDK) $61.48 +2.35% Staples Inc. (SPLS) $15.14 +2.30% Phillips 66 Common Stock (PSX) $59.18 +2.21% S&P 500 - Fallers Electronic Arts Inc. (EA) $25.62 -3.03% Baxter International Inc. (BAX) $63.89 -2.58% Cabot Oil & Gas Corp. (COG) $36.18 -2.48% Zions Bancorporation (ZION) $27.29 -2.40% United Technologies Corp. (UTX) $104.98 -2.24% Raytheon Co. (RTN) $76.08 -2.22% Rockwell Collins Inc. (COL) $67.72 -2.21% Whirlpool Corp. (WHR) $141.62 -2.12% EQT Corp. (EQT) $86.99 -2.12% Northern Trust Corp. (NTRS) $53.68 -1.92% Dow Jones I.A - Risers Bank of America Corp. (BAC) $14.06 +1.15% Microsoft Corp. (MSFT) $33.92 +1.01% General Electric Co. (GE) $24.33 +0.66% E.I. du Pont de Nemours and Co. (DD) $58.99 +0.51% Hewlett-Packard Co. (HPQ) $21.40 +0.42% Pfizer Inc. (PFE) $29.01 +0.42% Caterpillar Inc. (CAT) $84.07 +0.37% Cisco Systems Inc. (CSCO) $23.32 +0.34% JP Morgan Chase & Co. (JPM) $52.09 +0.25% Intel Corp. (INTC) $22.89 +0.24% Dow Jones I.A - Fallers United Technologies Corp. (UTX) $104.98 -2.24% Alcoa Inc. (AA) $8.02 -1.84% American Express Co. (AXP) $74.58 -1.78% Coca-Cola Co. (KO) $37.43 -1.37% McDonald's Corp. (MCD) $95.28 -0.88% International Business Machines Corp. (IBM) $184.96 -0.76% Merck & Co. Inc. (MRK) $48.37 -0.76% Verizon Communications Inc. (VZ) $46.79 -0.43% Chevron Corp. (CVX) $120.83 -0.40% AT&T Inc. (T) $33.94 -0.35% Nasdaq 100 - Risers Autodesk Inc. (ADSK) $42.55 +5.09% Priceline.Com Inc. (PCLN) $1,067.38 +2.80% Seagate Technology Plc (STX) $45.95 +2.80% Sandisk Corp. (SNDK) $61.48 +2.35% Staples Inc. (SPLS) $15.14 +2.30% Garmin Ltd. (GRMN) $47.20 +1.92% Liberty Interactive Corp (LINTA) $24.28 +1.89% Netflix Inc. (NFLX) $330.73 +1.88% Fossil Group Inc (FOSL) $119.35 +1.77% Vodafone Group Plc ADS (VOD) $35.83 +1.33% Nasdaq 100 - Fallers Tesla Motors Inc (TSLA) $180.95 -6.24% Equinix Inc. (EQIX) $175.62 -3.46% Catamaran Corp (CTRX) $45.84 -2.16% Green Mountain Coffee Roasters Inc. (GMCR) $75.46 -1.97% Viacom Inc. Class B (VIAB) $82.83 -1.78% Adobe Systems Inc. (ADBE) $51.52 -1.74% Maxim Integrated Products Inc. (MXIM) $29.74 -1.59% Amgen Inc. (AMGN) $113.06 -1.33% Charter Communications Inc. (CHTR) $133.79 -1.24% CH Robinson Worldwide Inc (CHRW) $59.12 -1.24%

Thursday newspaper round-up

BP, Deadlock, Lloyds BP has reached a milestone in its legal battle to limit its compensation settlement for the 2010 Deepwater Horizon disaster, following a favourable ruling from a US court. The Fifth Circuit appeals court in New Orleans on Wednesday night approved an injunction to stop payments to businesses that had not “experienced actual injury traceable to loss” from the Deepater Horizon accident. The ruling overturned earlier decisions by the district court that rejected BP’s calls for such an injunction, the Financial Times writes. The political deadlock in the United States would become “extremely serious” if it led to delays in the payment of interest on US government bonds, a senior Bank of England figure has warned. Paul Fisher, director of markets at the Bank, said that although traders expected some kind of deal on Capitol Hill, the public sector shutdown was a cause for concern. “Markets expect there to be a deal,” he said. “If it got to the stage when the US did not pay interest on its debt, that could be extremely serious,” according to The Times. Lloyds is closing in on a deal to sell Scottish Widows Investment Partnership as part of ongoing efforts to streamline its business and shore up its finances. A deal to sell the asset management arm of Scottish Widows could be signed off within weeks, according to sources close to the negotiations. FTSE 100 fund manager Aberdeen Asset Management is believed to be one of a handful of bidders still in the running, according to The Daily Mail. Less than a year after 4G promised to deliver super-fast mobile phone services, the telecoms regulator is taking the first steps towards a new generation of even more powerful technology. Ofcom is planning for a new era of mobile telephony ahead of a possible sale of the necessary spectrum — the frequencies used to carry mobile phone signals, data and television — as soon as 2018. It predicts that demand for mobile data will be 80 times greater in 2030 than it was last year, The Times says. Britain will not be able to claim a lasting recovery until regions outside London and the South East are growing strongly, the Bank of England Governor has warned. Mark Carney said “the economy is beginning to pick up”, but he stressed that a durable recovery would need to be built on growth outside the capital. “This recovery, to gain traction, is going to turn on regions like East Anglia,” he said. “As important as London is, it is going to turn on what happens in the broader economy. It is not enough just to have a recovery in London and the South East,” The Daily Telegraph reports Clawing back bonuses from directors could be made easier as a result of a new consultation on pay from the UK’s governance and accounting regulator. The Financial Reporting Council (FRC) has begun looking at whether the current rules claw back go far enough, or should be strengthened further in the wake of continued concern about executive remuneration. The FRC, led by Chairman Baroness Hogg, has begun a consultation in the wake of new legislation which came into effect on October 1st, which gave shareholders an binding vote on directors’ pay, The Daily Telegraph reports.