| Stocks inch higher, but Chemring rockets
Market Movers
techMARK 2,128.18 +0.40%
FTSE 100 5,852.42 +0.31%
FTSE 250 11,618.10 +1.01% Merkel backs Draghi's bond-buying proposal US data lifts stocks late on Chemring receives interest from The Carlyle Group Global equity markets were lifted higher on Friday on the back of hopes of imminent action from European officials and some decent economic data in the US. However, gains in London were only modest with just 19 points separating the intra-day low and high. "It’s been pretty much 'more of the same' today on equity markets with London struggling to maintain any kind of momentum, though Italian and Spanish markets have outperformed on the back of raised expectations of ECB intervention in the coming weeks," said market analyst Michael Hewson from CMC Markets. The mood was lifted this morning after German Chancellor Angela Merkel threw her weight behind the proposal by European Central Bank President Mario Draghi to buy sovereign peripheral bonds in order to bring down yields in indebted countries such as Spain and Italy. She said that Draghi's pledge to do "whatever it takes to preserve the euro" was "completely in line" with the views of euro-area officials. US stocks edged higher early on after the University of Michigan-Thomson Reuters consumer-sentiment index rose from 72.3 to 73.6 in August, better than forecasts of no change. Meanwhile, the Conference Board's leading economic index increased by 0.4% in July, better than the 0.3% growth estimate.
Shares in military counter-measures specialist Chemring rocketed in the last hour of trade today after confirming that it has received a "highly preliminary expression of interest" from private equity firm The Carlyle Group in relation to a possible offer.
Platinum producer Lonmin pared earlier losses this afternoon but remained lower after riot police shot dead dozens of its workforce at the Marikana project in South Africa, as a week of protests over pay have turned the FTSE 250 group's mine into a war zone. It is thought that around 35 people have now been killed since violent clashes erupted a week ago.
While trade unions have blamed Lonmin for the trouble, saying that their negotiations with employees outside of union structures had started the protests, the firm's Chairman Roger Phillimore said last night that this "is clearly a public order rather than labour relations associated matter." Stocks get a lift from Apple
Electronics stocks were being dragged higher on news that shares in US tech giant Apple were coming close to a record high, after having already risen 57% this year, on reports that it has started manufacturing the iPad mini.
Chip designer ARM Holdings was making gains today after Barclays said that it is in a decent position to benefit from the increased demand of high-tech smart devices.
Electronic components group Laird was also higher after UBS upgraded its rating on the stock to 'buy', saying that Apple's iPhone 5 launch would drive growth in the second half.
Barclays, Royal Bank of Scotland and Lloyds were in demand today as banking stocks across Europe made gains on improving developments in the Eurozone.
Water group Pennon was sinking after saying that trading at its waste management unit Viridor has been significantly below the high level of the first half of the previous fiscal year with recyclate prices remaining under pressure.
Casino and online gaming group Rank advanced after saying that revenues in the 12 months to June 30th rose 3.4%, while pre-tax profits jumped 9.0%.
FTSE 100 Risers
Lloyds Banking Group (LLOY) 34.22p +3.74%
Barclays (BARC) 192.85p +3.57%
CRH (CRH) 1,151.00p +2.86%
GKN (GKN) 226.10p +2.45%
Kingfisher (KGF) 295.60p +2.32%
Weir Group (WEIR) 1,778.00p +2.30%
Smiths Group (SMIN) 1,069.00p +2.00%
Royal Bank of Scotland Group (RBS) 231.60p +1.89%
Aggreko (AGK) 2,301.00p +1.81%
Aberdeen Asset Management (ADN) 281.60p +1.73%
FTSE 100 - Fallers
Anglo American (AAL) 1,927.50p -2.38%
Shire Plc (SHP) 1,980.00p -1.39%
Smith & Nephew (SN.) 662.00p -1.34%
GlaxoSmithKline (GSK) 1,472.00p -0.84%
AstraZeneca (AZN) 3,000.50p -0.83%
Diageo (DGE) 1,686.50p -0.79%
Eurasian Natural Resources Corp. (ENRC) 369.70p -0.72%
Resolution Ltd. (RSL) 225.80p -0.70%
United Utilities Group (UU.) 721.50p -0.62%
British American Tobacco (BATS) 3,325.00p -0.60%
FTSE 250 - Risers
Chemring Group (CHG) 414.70p +32.32%
Rank Group (RNK) 132.70p +5.57%
Centamin (DI) (CEY) 73.70p +5.29%
Hunting (HTG) 822.00p +5.25%
Ultra Electronics Holdings (ULE) 1,592.00p +5.01%
Ferrexpo (FXPO) 200.70p +4.42%
Redrow (RDW) 141.10p +4.29%
Aquarius Platinum Ltd. (AQP) 37.77p +4.02%
Ophir Energy (OPHR) 531.50p +4.01%
Michael Page International (MPI) 383.50p +3.65%
FTSE 250 - Fallers
Daejan Holdings (DJAN) 2,950.00p -3.15%
IP Group (IPO) 126.00p -3.08%
Barr (A.G.) (BAG) 439.20p -2.72%
JD Sports Fashion (JD.) 675.00p -2.53%
Heritage Oil (HOIL) 169.30p -2.03%
Petra Diamonds Ltd.(DI) (PDL) 103.50p -1.80%
Gem Diamonds Ltd. (DI) (GEMD) 187.80p -1.68%
Hikma Pharmaceuticals (HIK) 738.00p -1.53%
Shaftesbury (SHB) 530.00p -1.40%
Lonmin (LMI) 639.50p -1.31%
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | | European Markets Climbed On Merkel Comments & U.S. Consumer Confidence Data
The European markets gained ground on German Chancellor Angela Merkel's comments on Thursday. Merkel stated that Germany is committed to do everything it can to maintain the euro, which helped keep alive hopes that the ECB will take some decisive steps to reduce surging borrowing costs. The unexpected increase in U.S. consumer confidence provided further support to the markets in the afternoon.
Finland is preparing measures to face any kind of eventuality in the face of a breakup of the euro currency-bloc, the country's Foreign Minister Erkki Tuomioja told the British newspaper The Daily Telegraph.
"We have to face openly the possibility of a euro-break up," Tuomioja was quoted as saying on Thursday. "Our officials, like everybody else and like every general staff, have some sort of operational plan for any eventuality," he told the daily.
The European Commission wants the European Central Bank to act as the supervisor for all major banks in the euro area, German business daily Handelsblatt reported Friday.
The Commission is expected to put forward a proposal in this regard in September. According to the plan, the respective national authorities will be supervising the day-to-day activities of the banks and the ECB will intervene whenever there is a "dangerous risk."
Spanish banks' bad loans reached the highest on record in June, the Bank of Spain reported Friday. Bad loans rose to 9.42 percent of total lending in June, compared to 8.95 percent in May. Non-performing loans increased EUR 8.4 billion in June, to EUR 164.4 billion.
The Euro Stoxx 50 index of Eurozone bluechip stocks increased by 0.49 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.24 percent.
The DAX of Germany climbed by 0.64 percent and the CAC 40 of France gained 0.23 percent. The FTSE 100 of the U.K. rose by 0.28 percent and the SMI of Switzerland finished up by 0.17 percent.
In Frankfurt, Commerzbank increased by 3.27 percent and Deutsche Bank gained 3.70 percent.
In Paris, Credit Agricole rose by 3.33 percent. Societe Generale added 2.63 percent and BNP Paribas climbed by 1.51 percent.
In London, Vodafone rose by 0.22 percent. The U.S Department of Justice cleared the $3.9 billion deal by Verizon Wireless, a joint venture of Verizon Communications and Vodafone Plc., to buy spectrum from cable operators including Comcast Corp.
Rio Tinto fell by 0.39 percent, after the miner priced $3.0 billion of fixed rate bonds with a weighted average coupon of 2.67 percent and a weighted average maturity of 12.9 years.
Shares of Lonmin ended the session lower by 1.31 percent, after reports of a deadly clash between police and striking workers at a platinum mine in South Africa.
GlaxoSmithKline decreased by 0.84 percent, after the announced shutdown of a factory in western India.
Barclays rose by 3.73 percent and HSBC gained 0.92 percent. Lloyds Banking Group increased by 3.74 percent and Royal Bank of Scotland added 1.89 percent.
Swiss Life Holding climbed by 3.05 percent in Zurich, even though the company reported a decline in its 2012 first-half net profit.
Eurozone current account surplus increased in June, data published by the European Central Bank showed Friday. The seasonally adjusted current account surplus rose to EUR 12.7 billion in June from EUR 10.3 billion in May and EUR 5.5 billion in April.
Eurozone's foreign trade surplus increased in June, the latest figures published by Eurostat showed Friday. The trade surplus rose to EUR 14.9 billion in June from EUR 7.1 billion in May. A year ago, the balance was in a surplus of EUR 0.2 billion. |
| US Market Report | | Stocks Posting Modest Gains On Consumer Sentiment Data
Stocks are showing modest gains in early trading on Friday. Strong consumer sentiment data has helped the market extend a rally that began the previous day.
The Dow has climbed 16.43 points, or 0.1 percent, to reach 13,266.54. The Nasdaq is higher by 2.25 points, or 0.1 percent, to hit 3,065.06. The S&P 500 has advanced less than a point to 1,416.41.
New results from a closely watched survey showed that consumer attitudes have improved in August, rising to its highest level in three months. The Thomson Reuters/University of Michigan consumer sentiment index advanced to 73.6 from a reading of 72.3 last month.
The result topped the figure predicted by economists.
The early advance is building on a gain seen during Thursday's trading, when stocks shook off the doldrums of the previous few days. There had been a sideways move through the early part of the week, as traders digested the latest round of economic data.
In corporate news, retailer Gap revealed earnings for the second quarter that rose 29 percent from last year and topped the amount analysts had predicted. The company also raised its forecast.
Shares of the company are up $1.58, or 4.6 percent, to reach $35.92
Ann Inc. is another retailer showing strength in the early going. The owner of the Ann Taylor chain of women's clothing stores beat expectations with its quarterly profit and issued a strong outlook.
Shares of Ann are up $5.17, or 18.4 percent, to reach $33.31. |
| Broker tips | | Lloyds, Lonmin, Laird Given Lloyds's resilient share price performance so far this year, Investec has downgraded its rating on the bank from 'buy' to 'hold'.
Analyst Ian Gordon said: "Up 27%, Lloyds’ shareholders can take satisfaction from the stock’s year-to-date outperformance against all other UK banks." Nevertheless, the broker said that the outlook for return on equity (RoE) recovery "remains painfully slow, with scope for negative surprise".
Panmure Gordon has reiterated its 'buy' rating and 1,186p target price for platinum producer Lonmin, but its production forecasts have been lowered due to the headline-hitting strikes at its Marikana mine which have resulted in the deaths of more than 30 of its workers.
As a result, Panmure has reduced its earnings before interest, tax, depreciation and amortisation (EBITDA) forecast for this year from $181m to just $138m. Net debt estimates have also risen from $516m to $539m which moves the net debt to EBITDA ratio to 3.9 - "uncomfortably close to the 4.0 times debt convenient".
With growth momentum improving at Laird, UBS has upgraded its recommendation on the stock from 'neutral' to 'buy' and raised its forecasts for the electrical components manufacturer.
"We expect revenue growth for Laird to accelerate in H2 [second half of the year] driven by the new iPhone launch by Apple, a lap-top product cycle driven by Windows 8 and a recovery in some other end markets such as telecom infrastructure," the broker said in a research report on Friday.
After increasing its medium-term revenue forecasts by 2-3% and earnings per share estimates by 7-12%, UBS lifts its target price from 198p to 235p. |
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