Morning Euro Markets Bulletin .

ADVFN III Morning Euro Markets Bulletin

Daily world financial news Thursday, 17 October 2013

London Market Report

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

London open: Markets underwhelmed by last-minute US deal Stocks slumped on Thursday morning as investors digested a last-minute deal in the States for a short-term increase in the debt ceiling to avert a default and reopen the government. Markets across Europe were registering moderate declines in early trading, with London's FTSE 100 pulling back from a four-week high of 6,571.59. Alex Conroy, Financial Sales Trader at Spreadex, said that the agreement "brings a brief respite from weeks of political mud-slinging". However, he said that given that markets rallied yesterday in anticipation of a deal, "investors appeared positioned for the announcement and the markets could well suffer the hangover today". With just hours to go before the US was due to hit its borrowing limit, both the Senate and House of Representatives passed a bill late on Wednesday night to fund the government through to January 15th 2014 and raise the debt ceiling until February 7th. Budget negotiations were also pushed back to December 13th. Nevertheless, Standard & Poor's estimated that the 16-day shutdown had already cost the United States $24bn in lost economic activity, which will have a 0.6% adverse impact on gross domestic product growth in the fourth quarter. "The bottom line is the government shut-down has hurt the US economy," the ratings agency said. FTSE 100: BSkyB, SABMiller lead gains early on Satellite television and broadband group BSkyB surged after recording a strong rise in first-quarter revenues after an increase of 800,000 paid-for subscription products. Profits however were down after a step up in Premier League costs. Brewing giant SABMiller gained after saying its first-half performance had been in line with expectations as strong volume growth at its African business offset a challenging environment in parts of Europe. Sector peer Diageo, however, was flat after reporting a weakening of growth in some emerging markets in the first quarter, offset by a strong performance in US spirits. The firm also warned about exchange rates having an adverse impact on profits this year. Travis Perkins, the builders merchant, reported "encouraging" sales momentum in the third quarter but said that conditions in retail markets were "challenging", denting the share price early on. Mexico-focused precious metals group Fresnillo swung between gains and losses after failing to give guidance for gold output this year following a near-10% decline in the third quarter. While silver guidance was maintained after 7.6% growth in the quarter, gold production depends on the lifting of the suspension of an explosive permit at its Herradura mine. Packaging group Bunzl fell despite reporting 12% growth in third-quarter revenues helped by its aggressive acquisition strategy. The stock has risen by nearly a third already this year.

 

FTSE 100 - Risers SABMiller (SAB) 3,161.50p +4.00% British Sky Broadcasting Group (BSY) 911.50p +3.82% Burberry Group (BRBY) 1,501.00p +2.53% Unilever (ULVR) 2,437.00p +1.58% British American Tobacco (BATS) 3,276.00p +0.80% easyJet (EZJ) 1,286.00p +0.55% Vodafone Group (VOD) 226.20p +0.53% ITV (ITV) 191.00p +0.47% London Stock Exchange Group (LSE) 1,627.00p +0.37% Associated British Foods (ABF) 2,002.00p +0.35% FTSE 100 - Fallers Travis Perkins (TPK) 1,720.00p -3.26% Weir Group (WEIR) 2,295.00p -1.84% Randgold Resources Ltd. (RRS) 4,312.00p -1.84% Barclays (BARC) 278.95p -1.66% Meggitt (MGGT) 537.00p -1.65% TUI Travel (TT.) 370.90p -1.57% ARM Holdings (ARM) 1,014.00p -1.55% Vedanta Resources (VED) 1,030.00p -1.53% IMI (IMI) 1,505.00p -1.51% Aberdeen Asset Management (ADN) 407.40p -1.48% FTSE 250 - Risers Man Group (EMG) 85.25p +2.83% Ashtead Group (AHT) 667.50p +2.61% Carpetright (CPR) 630.50p +1.69% EnQuest (ENQ) 132.40p +1.69% St James's Place (STJ) 650.00p +1.56% Renishaw (RSW) 1,700.00p +1.43% Cairn Energy (CNE) 279.80p +1.38% UDG Healthcare Public Limited Company (UDG) 328.00p +1.20% Kenmare Resources (KMR) 23.25p +1.09% Bellway (BWY) 1,488.00p +0.95% FTSE 250 - Fallers Rank Group (RNK) 148.00p -3.90% Menzies(John) (MNZS) 820.00p -2.56% Mitie Group (MTO) 305.40p -2.40% Diploma (DPLM) 645.50p -2.27% IP Group (IPO) 134.00p -2.19% AL Noor Hospitals Group (ANH) 806.00p -2.01% Lonmin (LMI) 316.70p -1.95% Fenner (FENR) 401.00p -1.93% Alent (ALNT) 343.70p -1.80%

UK Event Calendar

INTERIMS Booker Group, Etalon Group Ltd GDR (Reg S) INTERIM DIVIDEND PAYMENT DATE Melrose Industries, Netplay TV, RPS Group, Standard Chartered QUARTERLY EX-DIVIDEND DATE Caterpillar Inc. INTERNATIONAL ECONOMIC ANNOUNCEMENTS Balance of Payments (EU) (09:00) Bloomberg Consumer Confidence (US) (14:45) Building Permits (US) (13:30) Capacity Utilisation (US) (14:15) Continuing Claims (US) (13:30) Current Account (EU) (09:00) Housing Starts (US) (13:30) Industrial Production (US) (16:15) Initial Jobless Claims (US) (13:30) Philadelphia Fed Index (US) (15:00) Speech President New York Fed (17:45) Speech President Kansas City Fed (17:45) Speech President Minneapolis Fed (19:45) IMSS Cairn Energy, Dechra Pharmaceuticals, Diageo, Jupiter Fund Management , Man Group, Rank Group, Renishaw EGMS Zhejiang Expressway Co 'H' Shares AGMS Brooks Macdonald Group, Dechra Pharmaceuticals, IG Group Holdings, Monitise, Rank Group, Renishaw TRADING ANNOUNCEMENTS Britvic, Mothercare, Rank Group, SABMiller UK ECONOMIC ANNOUNCEMENTS Internet Retail Sales (09:30) Retail Sales (09:30) FINAL DIVIDEND PAYMENT DATE Coral Products, Volex Q1 British Sky Broadcasting Group

Europe Market Report

FTSE 100 Euronext Dax perf CAC 40

Europe open: Investors react coolly to "fudge" on Capitol Hill - Management at Carrefour and Metro positive - KPN drops eight per cent as Slim pulls out - Single currency moves towards resistance at 1.37 FTSE-100: -0.07% Dax-30: -0.24% Cac-40: -0.09% FTSE Mibtel: -0.14% Ibex 35: -0.12% Stoxx 600: -0.35% European stocks have begun the session slightly lower as investors react coolly to the "fudge" on Capitol Hill. Although the worst scenarios have been avoided, markets may well have been expecting something more. The agreement reached by US Congressmen will allow the United States to avoid what many believe would be a catastrophic default on US Treasuries and re-start the government – but only for the time being. The government shutdown has only been postponed until January 15th and the debt ceiling extended until February 7th. Furthermore, negotiations to reduce the budget deficit must be concluded by December 13th. Naturally, what everyone now wants to know is where this leaves the US Federal Reserve. It may also be interesting to hear what the ratings agencies have to say. Acting as a backdrop, at least two large financial media outlets are commenting this morning on the exit by German Greens for coalition talks with Angela Merkel's CDU. Germany's economic research institutes have leaked their joint economic forecasts to selected newspapers. The foresee an 0.4% increase in German gross domestic product in 2013, to be followed by 1.8% growth in 2014, the Suddeutsche Zeitung reports. Various Italian unions are considering taking action to oppose government measures included in the budget, as the unions feel such measures would heavily penalise public sector employees (particularly via the wage/turnover freezes and extra pay cuts), according to La Repubblica. Sulzer warns, KPN plummets Sulzer shares were off by 3.5% after the Swiss pump maker cut its full-year sales forecast for a second time Mexican billionaire Carlos Slim has admitted defeat in his attempts to take over Dutch telecommunications outfit KPN for €7.2bn, sending the company's shares plummeting by 8%. Grocery giant Carrefour saw supermarket sales in France grow again in the third quarter. Sales in China also improved. German retailer Metro was similarly upbeat, announcing that revenues rose in its country. The firm is confident in its outlook for the Christmas period. Thomson Reuters data shows that in the past two weeks, consensus expectations for 2013 earnings from Stoxx Europe 600 companies have been cut by 0.5% as analysts factor in profit warnings from companies such as Schindler, Chemring and Getinge. From a sector standpoint the best performance on the Stoxx 600 is to be seen in the following industrial groups; food and beverage (1.37%), [ersonal and household goods (0.37%) and media (0.36%). Light data calendar Eurozone current account figures will be released by the European Central Bank (ECB) at 09:00. Eurozone construction data for August will be forthcoming at 10:00. Single currency moves higher Front month Brent crude futures are lower by $0.308 to the $110.23 per barrel mark on the ICE. The euro/dollar was higher by 0.59% to the $1.3620 level.

 

US Market Report

US close: Stocks surge as lawmakers reach deal over debt ceiling - Lawmakers reach deal to avert default - Senate, House approve bill after close - Bank of America gains after Q3 results Dow Jones: 1.36% Nasdaq: 1.19% S&P 500: 1.41% US markets jumped by over one per cent on Wednesday after lawmakers reached a deal to increase the debt ceiling and end the government shutdown just hours before the deadline. Stocks surged on the agreement - the S&P 500 was just 0.2% off its record close reached in September - which will fund the government through to January 15th 2014 and raise the borrowing limit through to February 7th. Both the Senate and the House of Representatives voted strongly in favour of the bill after markets closed, averting a dreaded default before the government was due to hit the debt ceiling on October 17th. In a statement on his website, House Speaker John Boehner assured that Republicans will continue to fight over negotiations aimed at "addressing our country's debt and providing fairness for the American people under ObamaCare […] But blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us." Ratings agency Standard & Poor's said that the 16-day shutdown cost the US $24bn in lost economic activity, which will have a 0.6% adverse impact on gross domestic product growth in the fourth quarter. "The bottom line is the government shutdown has hurt the US economy," S&P said. In other news, the National Association of Home Builders/Wells Fargo index of builder sentiment decreased to 55 this month from a revised 57 in September. Economists had predicted a decline to 57. Readings above 50 signal more confidence among builders. Rising interest rates and the budget battle hurt progress in the housing market, the report revealed. Bank of America swings to a profit Bank of America gained after swinging to a net income of $2.22bn in the third quarter, equal to 20 cents per share. This was up from a loss of $33m the year before and ahead of the consensus forecast for earnings of 18 cents per share. Revenue fell 1.5% to $22.2bn but came in ahead of the $22bn estimate. Search-engine and internet group Yahoo drifted lower despite overnight having reported third quarter profit that topped analysts' estimates. Software firm Intel Corp moved higher following some earlier selling pressure after it warned of delays in producing a new line of processors. After the close, tech giant International Business Machines (IBM) revealed that third-quarter profits rose 6% to $4.04bn or $3.68 dollars per share. Revenues, however, were off by $1bn (-4%) to $23.7bn, versus the prior-year period and below forecasts for a small increase, causing the stock to take a hit in after-hours trading. S&P 500 - Risers Abbott Laboratories (ABT) $35.90 +6.50% Pioneer Natural Resources Co. (PXD) $211.86 +6.08% Regeneron Pharmaceuticals Inc. (REGN) $307.65 +5.93% Juniper Networks Inc. (JNPR) $21.03 +4.78% First Solar Inc. (FSLR) $45.76 +4.60% Sprint Nextel Corporation (S) $6.30 +4.48% H&R Block Inc. (HRB) $28.86 +4.41% J.C. Penney Co. Inc. (JCP) $7.47 +4.18% Citigroup Inc. (C) $50.84 +4.05% Chesapeake Energy Corp. (CHK) $27.53 +3.89% S&P 500 - Fallers Stanley Black & Decker Inc. (SWK) $76.75 -14.26% Teradata Corp. (TDC) $41.48 -3.33% Exelon Corp. (EXC) $28.75 -2.61% Masco Corp. (MAS) $19.39 -2.22% Ingersoll Rand Ltd. (IR) $63.35 -1.97% Allegheny Technologies Inc. (ATI) $31.42 -1.90% CONSOL Energy Inc. (CNX) $37.75 -1.56% Cablevision Systems Corp. (CVC) $15.99 -1.54% Cognizant Technology Solutions Corp. (CTSH) $84.69 -1.42% Dover Corp. (DOV) $88.32 -1.31% Dow Jones I.A - Risers JP Morgan Chase & Co. (JPM) $54.00 +3.23% Goldman Sachs Group Inc. (GS) $162.25 +2.93% Visa Inc. (V) $195.63 +2.23% Pfizer Inc. (PFE) $29.80 +2.19% Verizon Communications Inc. (VZ) $47.25 +2.01% Travelers Company Inc. (TRV) $86.08 +1.89% Boeing Co. (BA) $120.34 +1.83% Wal-Mart Stores Inc. (WMT) $75.60 +1.65% E.I. du Pont de Nemours and Co. (DD) $59.06 +1.58% McDonald's Corp. (MCD) $95.22 +1.51% Dow Jones I.A - Fallers Cisco Systems Inc. (CSCO) $23.00 -0.80% Home Depot Inc. (HD) $74.94 -0.32% Walt Disney Co. (DIS) $66.35 -0.14% Nasdaq 100 - Risers Regeneron Pharmaceuticals Inc. (REGN) $307.65 +5.93% Staples Inc. (SPLS) $15.58 +3.45% Facebook Inc. (FB) $51.13 +3.30% Gilead Sciences Inc. (GILD) $65.65 +3.22% Garmin Ltd. (GRMN) $48.71 +3.16% Liberty Media Corporation - Class A (LMCA) $152.72 +2.99% Vertex Pharmaceuticals Inc. (VRTX) $75.46 +2.88% Mondelez International Inc. (MDLZ) $31.43 +2.86% Intuitive Surgical Inc. (ISRG) $401.33 +2.74% Amgen Inc. (AMGN) $114.28 +2.55% Nasdaq 100 - Fallers Randgold Resources Ltd. Ads (GOLD) $69.50 -3.55% Activision Blizzard Inc. (ATVI) $17.32 -2.53% Nuance Communications Inc. (NUAN) $17.42 -1.55% Cognizant Technology Solutions Corp. (CTSH) $84.69 -1.42% Linear Technology Corp. (LLTC) $39.11 -1.11% Yahoo! Inc. (YHOO) $33.09 -0.87% eBay Inc. (EBAY) $53.52 -0.87% Baidu Inc. (BIDU) $150.20 -0.86% Cisco Systems Inc. (CSCO) $23.00 -0.80% NetApp Inc. (NTAP) $40.44 -0.64%

Newspaper Round Up

Thursday newspaper round-up: RBS, Chinese banks, Marks&Spencer The Treasury has asked advisory firms for "creative ideas" over Royal Bank of Scotland that could enable the Chancellor to start selling shares in the bank next year. The thinking is that radical action, such as selling Citizens, the bank's American business, would make it easier to sell the taxpayer's 45.5 bn pound stake for less than the Government's average in-price of 502.26p, financial sources told The Times. The US Congress has passed a bill to reopen the federal government and approve new sovereign borrowings, ending three weeks of high drama on Capitol Hill that pushed the US to the edge of a debt default. With pressure mounting from US business and overseas creditors such as China, the Senate and then the House of Representatives both voted to end the partial government shutdown and extend the debt ceiling into early next year while Democrats and Republicans start negotiations on a new budget, the Financial Times writes. The Tory chairman of the Commons Treasury Select Committee challenged the Chancellor yesterday, questioning whether he might be improperly favouring Chinese banks over other foreign financial institutions and putting undue pressure on the Bank of England to approve the policy change. Just 24 hours after George Osborne, on a visit to China, promised to help Chinese banks scale up their London operations by lightening the regulatory burden on them, Andrew Tyrie expressed his concern in a letter to Andrew Bailey, head of the Prudential Regulation Authority, the bank supervision arm of the Bank of England, writes The Times. Thames Water's attempt to add an extra £29 to customers' water bills next year has been rejected by the industry regulator. Ofwat said the water and sewerage company, which serves about 14m customers in and around London, could only justify a bill hike of around £7 but that this would not be imposed on customers. Thames Water applied in August for a one-off price increase next year that would raise average bills by 8% from £354, blaming customers struggling to pay their bills and the cost of a super sewer under London, The Daily Telegraph explains. Marks & Spencer must look seriously at offering a full online food service, says its former boss Stuart Rose, Chairman of internet grocery group Ocado. Speaking on the sidelines of the Internet Retailing Conference in London, Rose said: "By next year, M&S will be the only large grocer that doesn't have [an online grocery service]. If the customer wants it, eventually they are going to have to provide it," The Guardian reports. Petrochemicals firm Ineos could close its Grangemouth fuel plant for good, putting thousands of jobs at risk as relations with its trade union broke down. Group director Tom Crotty said the firm would put a cost-cutting proposal directly to the workforce, bypassing trade union Unite, with a deadline of Monday to hear back from its 1,300 staff. He said rejection of the proposals could see investors – including billionaire majority owner Jim Ratcliffe – pull the plug on the plant after a meeting next Tuesday, The Daily Mail says. FTSE 100 engineering group IMI said it has agreed to sell its beverage dispense and merchandising divisions for $1.1bn to Marmon Group, which is owned by Buffett's Berkshire Hathaway holding company. Following the deal, the news that some £620m will be returned to IMI's investors sent shares higher. The beverage division makes cooling, mixing and dispensing systems, supplying chains such as McDonalds with soft drinks equipment, according to The Scotsman.