London open: Stocks slip ahead of Eurogroup meeting
Market Movers
- techMARK 2,042.29 -0.23%
- FTSE 100 5,638.98 -0.42%
- FTSE 250 11,001.32 -0.63%
- Chinese inflation data increases stimulus speculation
- Eurogroup to meet this afternoon
- Spanish yields on the up
The FTSE 100 opened slightly lower on Monday morning on the back of economic data from Asia and ahead of a crucial Eurogroup meeting later today.
"Overall for the start of the new trading week volume is expected moderate at best, with equity markets remaining vulnerable to further sell-offs in light of the dire economic situation in Europe with no major improvement likely in the near future," said Marcus Huber from ETX Capital.
Investors will still be digesting Friday's worse-than-expected employment report in the US. Meanwhile, 10-year bond yields in Spain were up above the key 7% level this morning, trading 12.3 basis points higher at 7.077%.
Chinese consumer inflation hit its lowest level in almost two and half years, according to the latest figures from the National Bureau of Statistics. The consumer price index rose by 2.2% year-on-year in June, down from 3% in May.
Huber said that the data certainly gives China room to implement additional stimulus measures. "Although any new measures might not be imminent as China only lowered interest rates last week and might want to wait for further economic data before making any final decision on potential stimulus," he said.
Eurozone finance ministers, otherwise known as the Eurogroup, are to meet this afternoon to follow up on the decisions made at the EU summit. Also in focus will be European Central Bank President Mario Draghi who will speak about economic and monetary affairs to European parliament.
Miners under pressure early on
Mining peers Anglo American, Evraz, Xstrata and Randgold headed lower early on Miners will be looking ahead to aluminium giant Alcoa kicking off the new earnings season after the US close this evening. The focus will likely be the group's outlook amidst a slowdown in China and the ongoing debt crisis in Europe.
Head coal and coke producer New World Resources was a heavy faller after Bank of America Merrill Lynch downgraded its rating on the stock to 'underperform'. Kenmare Resources, Centamin and Aquarius Platinum was also heavy fallers.
Publishing group Reed Elsevier edged higher on the back of positive broker commentary. Nomura maintained its 'buy' rating on the stock today, while Citigroup raised its target from 535p to 605p.
FTSE 250 recruitment firm Michael Page dropped after saying it had seen a tough first half and expects more of the same in the third quarter.
House builder Bovis Homes fell despite saying that its first half was in line with expectations with net private reservations sharply higher.
Internet gambling firm Betfair was out of favour after warning that it is considering legal action against Cyprus after the country banned online casinos and exchange betting.
Elsewhere, AIM-listed sporting goods retailer JJB Sports plummeted after warning that sales have fallen short of forecasts since its last update.
FTSE 100 - Risers
Standard Chartered (STAN) 1,437.00p +0.70%
Reed Elsevier (REL) 519.50p +0.68%
Meggitt (MGGT) 396.10p +0.66%
CRH (CRH) 1,155.00p +0.35%
BAE Systems (BA.) 293.90p +0.34%
Tesco (TSCO) 317.90p +0.25%
SSE (SSE) 1,419.00p +0.21%
Babcock International Group (BAB) 863.50p +0.17%
Centrica (CNA) 319.60p +0.16%
Tate & Lyle (TATE) 672.50p +0.15%
FTSE 100 - Fallers
Evraz (EVR) 241.00p -2.11%
Burberry Group (BRBY) 1,265.00p -1.86%
Xstrata (XTA) 819.00p -1.80%
Anglo American (AAL) 2,066.50p -1.78%
Aviva (AV.) 283.00p -1.74%
IMI (IMI) 823.50p -1.73%
Associated British Foods (ABF) 1,270.00p -1.70%
Randgold Resources Ltd. (RRS) 5,850.00p -1.60%
ARM Holdings (ARM) 501.00p -1.57%
Kazakhmys (KAZ) 714.50p -1.45%
FTSE 250 - Risers
Avocet Mining (AVM) 65.50p +3.97%
Euromoney Institutional Investor (ERM) 783.50p +2.42%
Dechra Pharmaceuticals (DPH) 497.10p +2.26%
Savills (SVS) 361.60p +1.74%
Dunelm Group (DNLM) 559.50p +1.73%
NMC Health (NMC) 203.30p +1.65%
Soco International (SIA) 336.90p +1.60%
BH Macro Ltd. EUR Shares (BHME) € 18.90 +1.56%
Brown (N.) Group (BWNG) 263.80p +1.46%
BH Global Ltd. GBP Shares (BHGG) 1,150.00p +1.32%
FTSE 250 - Fallers
Centamin (DI) (CEY) 64.25p -12.53%
New World Resources A Shares (NWR) 329.00p -8.10%
Kenmare Resources (KMR) 35.50p -7.04%
Aquarius Platinum Ltd. (AQP) 43.16p -6.40%
Michael Page International (MPI) 348.60p -4.39%
Betfair Group (BET) 723.00p -4.37%
Hays (HAS) 69.90p -4.05%
Talvivaara Mining Company (TALV) 136.80p -3.12%
Carpetright (CPR) 640.00p -2.88%
UK Event Calendar Monday July 09
INTERIMS
RM
INTERIM DIVIDEND PAYMENT DATE
Renew Holdings
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (GER) (07:00)
Consumer Credit (US) (20:00)
Current Account (GER) (07:00)
Factory Orders (GER) (11:00)
Retail Price Index (GER) (07:00)
Q2
Michael Page International
ANNUAL REPORT
Cropper (James), Optare
EGMS
Equatorial Palm Oil
AGMS
Asia Ceramics Holding, GB Group, Zhaikmunai LP GDR (Reg S)
TRADING ANNOUNCEMENTS
Bovis Homes Group, XP Power Ltd. (DI)
FINAL DIVIDEND PAYMENT DATE
Amiad Water Systems Ltd, Anglo-Eastern Plantations, Evraz
FINAL EX-DIVIDEND DATE
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Europe mid-morning: Stocks turn lower on periphery woes
-Krugman: Spain can but wait for ECB to intervene-ABC
-France shows caution on EU integration-WSJ
-Nowotny (ECB) concerned about stand-still in Greece
-Euro at 2 year low versus US dollar
FTSE-100: -0.42%
Dax-30: -0.26%
Cac-40: -0.45%
FTSE-Mibtel: -0.39%
Ibex 35: -0.84%
Stoxx 600: -0.35%
European equities have begun the week slightly higher, on the heels of the losses inflicted on them in the previous week and on the back of much lower than expected inflation data out in China overnight. Critically, Chinese Premier Wen Jiabao said the government will intensify its response to the economic slowdown. Eurozone periphery debt, however, continues to come under pressure.
The above as Europe´s leaders try to craft an effective response to the financial crisis quickly enough at tonight´s Eurogroup meeting of finance ministers. This despite the existence of pockets of opposition or reticence even in core countries such as Germany and France. For example, The Wall Street Journal calls attention today to French qualms regarding the supposed risks inherent in moving too quickly on ceding national sovereignty over national budgets.
Acting as a backdrop, one might call attention to remarks last night from the President of the Boston Federal Reserve, Eric Rosengren, which seemed to centre on the risk for financial shocks emanating from Europe to affect the US and or Asia.
As well, US aluminium giant Alcoa will today kick-off the earnings season tonight Stateside.
On the company front, and from a sector stand-point, the worst performance in the DJ Stoxx 600 can now be seen in the following industry groups: basic resources (-1.43%), oil (-0.81%) and insurance (-0.81%).
Swiss unemployment comes in much lower than expected
The Banque de France´s business confidence index for the month of June has come in at 91 points (Consensus: 92).
The Swiss unemployment rate remained unchanged at 2.7% in June (Consensus: 2.9%). The previous month´s reading was revised down from a preliminary estimate of 3.0%.
The German trade surplus rose to €15.3bn in May (Consensus: €14bn), after €14.4bn in april.
Euro near two year lows
The euro/dollar cross has begun the week near two year lows, down by 0.14% to the 1.2270 dollar mark.
Front month Brent crude futures are now higher now by 0.7718 dollars, to the 98.74 dollar per barrel mark in ICE trading. |
| US Market Report | US close: Investors bale on equities after jobs data
Dow: -124 at 12,772
S&P 500: -13 at 1,355
Nasdaq: -39 at 2,937 The Dow Jones industrial average ended the week with a triple-digit fall after non-farm payrolls data came in worse than expected.
Although the US economy added 80,000 jobs in June, that was less than the 100,000 the market had been expecting.
Tech stocks batteredTechnology shares were especially hard hit, with data warehousing specialist Teradata and network giant Citrix the biggest fallers on the S&P 500 and NASDAQ 100 respectively.
Corporate data integration software provider Informatica plummeted after shocking the market with a surprise fall in second quarter earnings. The company admitted that it had been laggardly in responding to changes in market conditions, especially in Europe. Sector peer Salesforce.com was dragged down in sympathy.
Computer disk drive maker Seagate was another loser in a bad sector, after it disclosed its fiscal fourth quarter sales and margins would fall below expectations.
Haulage firm Navistar lost its way, after it revealed it is in talks with the Environmental Protection Agency on a proposal that would enable the company to continue shipping lorries while it makes the change-over to a new emissions reduction technology that meets the agency requirements.
Other marketsThe most widely traded futures contract for gold fell $30.50 to close at $1,578.90, while the front-month contract for West Texas light sweet crude tumbled after the US jobs data, closing at $84.50 a barrel, down $2.77 on the day.
With investors baling on equities government debt was in demand, pushing down yields. The benchmark 10-year Treasury note saw its yield slide six basis points, or 6/100 of a percentage point, on the day to 1.55%; prior to the release of the disappointing jobs data the yield had been around 1.59%.
S&P 500 - Risers
R.R. Donnelley & Sons Co. (RRD) $12.66 +5.85%
Chesapeake Energy Corp. (CHK) $20.04 +2.04%
Family Dollar Stores Inc. (FDO) $69.58 +1.98%
Apollo Group Inc. (APOL) $36.55 +1.64%
Target Corp. (TGT) $58.07 +1.61%
Kohls Corp. (KSS) $47.75 +1.53%
S&P 500 - Fallers
Teradata Corp. (TDC) $65.01 -10.48%
Citrix Systems Inc. (CTXS) $77.48 -7.52%
F5 Networks Inc. (FFIV) $94.37 -6.97%
Autodesk Inc. (ADSK) $32.31 -6.75%
Red Hat Inc. (RHT) $52.94 -6.58%
Alpha Natural Res (ANR) $8.67 -6.47%
KLA-Tencor Corp. (KLAC) $46.06 -5.61%
LSI Logic Corp. (LSI) $6.20 -5.34%
Teradyne Inc. (TER) $13.67 -5.00%
Dow Jones I.A - Risers
McDonald's Corp. (MCD) $89.66 +0.40%
Wal-Mart Stores Inc. (WMT) $71.36 +0.39%
Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $19.57 -3.50%
Caterpillar Inc. (CAT) $84.61 -2.51%
Alcoa Inc. (AA) $8.73 -2.19%
Bank of America Corp. (BAC) $7.66 -2.05%
Nasdaq 100 - Risers
Research in Motion Ltd. (RIMM) $8.10 +5.33%
Apollo Group Inc. (APOL) $36.55 +1.64%
Nasdaq 100 - Fallers
Citrix Systems Inc. (CTXS) $77.48 -7.52%
Autodesk Inc. (ADSK) $32.31 -6.75%
Check Point Software Technologies Ltd. (CHKP) $47.27 -5.93%
KLA-Tencor Corp. (KLAC) $46.06 -5.61%
Nll Holdings Inc. (NIHD) $9.41 -5.52%
Foster Wheeler AG (FWLT) $16.71 -4.89%
NetApp Inc. (NTAP) $29.76 -4.37%
Cognizant Technology Solutions Corp. (CTSH) $57.66 -4.25%
Symantec Corp. (SYMC) $14.11 -4.11%
Lam Research Corp. (LRCX) $35.49 -4.02%
| Newspaper Round Up | Monday newspaper round-up: Merkel, Food inflation, Jobs
Deputy Bank of England governor, Paul Tucker, will be grilled by MPs over the Libor scandal and whether regulators decided to turn a blind eye to misconduct. The deputy governor of the Bank of England was warned that UK lenders were manipulating interest rates a year before he allegedly gave Barclays "a nod and a wink" to rig its own, in a call with former chief executive Bob Diamond in 2008. Paul Tucker will on Monday be grilled by MPs on the Treasury Select Committee (TSC) over the Libor scandal, where he will be asked whether regulators decided to turn a blind eye to misconduct during the banking crisis in the interests of financial stability. Specifically, he is expected to be quizzed about a meeting he chaired of the Bank's Sterling Money Markets Liaison Group in November 2007, at which several members warned they "thought that Libor fixings had been lower than actual traded inter-bank rates through the period of stress," according to The Telegraph.
The number of people placed in permanent jobs fell at the sharpest rate in three years last month, prompting fresh fears that the UK's unemployment toll will hit 3m by the end of the year. Months of uncertainty in the Eurozone, the Greek elections and a worsening debt position in southern Europe are to blame for the "worrying" recruitment figures, according to the report by KPMG and the Recruitment and Employment Confederation (REC), out today. On a scale where anything above 50 represents an increase, the number of permanent job placements in June fell to 46.8, down from 51 the previous month, The Telegraph says.
One of the world's richest businessmen, with ties to Britain's political elite, had links with a brutal mafia clan and used contacts in the Russian intelligence services to spy on rivals, according to court testimony obtained by The Times. The allegations were levelled against the aluminium tycoon Oleg Deripaska by a former business associate in a money-laundering trial in Germany. Documents from the case have been made available to this newspaper prior to a clash between Mr Deripaska and a rival oligarch beginning in the High Court in London today.
German president Joachim Gauck has ordered Chancellor Angela Merkel to clarify exactly what she agreed behind closed doors at the EU crisis summit ten days ago, lending a powerful voice to critics dismayed by the surging costs of euro bail-outs. "She has a duty to explain in great detail what it means, and what it means fiscally. There seems to be a lack of energy in telling the people what is really happening," he told ZDF television. President Gauck's broadside came as markets wait anxiously for a crucial hearing this Tuesday by Germany's constitutional court on the legality of the European Stability Mechanism (ESM), the EU's €500bn (£397bn) bail-out fund, The Telegraph writes.
The prices of exchange-traded grains such as corn and wheat took a breather on Friday, but this may not last for long. Sir Mervyn King should be worried. Following another week of grain price rises a report from the US government next week could provide more nourishment for the bulls. Food inflation is once again firmly on the agenda. The prices of exchange-traded grains such as corn and wheat took a breather on Friday, but this may not last for long. "Corn prices have rallied almost 30% in the past month on continuing weather stresses in the US Midwest," Colin O'Shea, head of commodities at Hermes Fund Managers, explains. "This is in vast contrast to the outlook for the crop a few months ago as most people expected record harvests to dampen prices," The Telegraph reports.
Offshore oil explorers are to be given deeds by the Treasury providing a cast-iron guarantee of tax relief to offset the multibillion-pound cost of dismantling ageing pipelines, wells and platforms in the North Sea. In the coalition's latest attempt to soothe ruffled feathers among offshore exploration groups, Chloe Smith, the Economic Secretary to the Treasury, will visit Aberdeen today to kick-off a consultation on so-called "decommissioning relief deeds". The documents are intended to provide legally binding certainty of tax breaks decades in the future to help with the estimated £35bn cost of dismantling equipment when oil reserves under the sea finally dry up, says The Times.
British listed companies are sitting on a cash hoard worth a total of about £19bn as they hold off from investing due to the shaky economic outlook. Research from corporate financial health monitor Company Watch found that 211 UK-listed non-financial companies are sitting on cash of at least £1m each as worries over the Eurozone and flagging global growth makes them unwilling to invest. Companies in other Western European countries are holding even more money, although nowhere has as many hoarders as Britain. In total, European firms are sitting on £110bn net cash. Nick Hood, head of external affairs at Company Watch, said firms were choosing cash for security. He said: "All European economies are affected to some degree by the eurozone crisis and it looks as if the headlong growth of the Bric economies is faltering, so it's hardly surprising that the bosses of our largest businesses view debt as dangerous and cash as comforting, The Scotsman reports. |
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