ADVFN III Evening Euro Markets Bulletin -Tuesday, September 18th, 201-.2

	ADVFN III	Evening Euro Markets Bulletin
	Daily world financial news

Tuesday, 18 September 2012

London Market Report

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

London close: Late rally fizzles Market Movers techMARK 2,132.60 -0.33% FTSE 100 5,868.16 -0.43% FTSE 250 11,933.70 -1.22% A late rally which briefly looked like it might see Footsie venture into positive territory for the first time all day was nipped in the bud right at the death. Equities had a dull but fretful day, which started with concerns over China becoming involved in a trade war with the US and a military war with Japan, and ended with investors partly comforted about developments in Spain, where this morning's government debt auction went about as well as could be expected. With Spain feeling increased pressure to request assistance, the Treasury was able to issue 12 and 18-month bills for €4.6bn, more than the top end of the €3.5 - €4.5bn target. 18-month bills were issued for €1.02bn (maturity: February 21, 2014) at a yield of 3.072%, lower than the previous 3.335%. 12-month bills were issued for €3.56bn (maturity: September 20, 2013) at a yield of 2.835%, lower than the previous 3.07%. In the UK, inflation data was in line with forecasts. The Consumer Prices Index (CPI) measure of inflation dropped to 2.5% in August, down from 2.6% in July, helped by falls in the price of clothing and footwear, furniture and household equipment, and domestic gas. The consensus estimate had been for a rise of 2.5%. Sportswear firms in focus Sports fashion-wear firm JD Sports is having a few teething problems with the integration of the Black's Leisure store portfolio it acquired a while back. The firm said Blacks had made an initial loss of £10m, as expected, due to a critical lack of stock and unsustainable cost base. The retailer's stricken rival, JJB Sports, shot up on reports that a new potential bidder may have thrown its hat into the ring for the company which put itself up for sale last month. According to Sky News, privately owned Stafford Group, which owns a sporting chain in Ireland, is interested in acquiring JJB. Elsewhere on the high street, department store group Debenhams saw like-for-like (LFL) sales rise 3.7% in the final 10 weeks of its financial year, which ran to September 1st. For the full-year, LFL sales were up 1.6%. Despite the sales figures being better than expected, the company did not increase profit guidance for the year, which may account for why the shares closed little changed. Results from house-building and construction firm Galliford Try were well received. The group saw profits soar last year, paving the way for its full-year dividend pay-out to almost double, from 16p to 30p. Financial and legal training provider Wilmington moved to the head of the class after reporting increased profits as it successfully chased higher margin work over the 12 months to the end of June. Broker action Broker downgrades put insurance titan Aviva on the skids, pushing the stock's dividend yield beyond seven per cent; BofA Merrill Lynch has downgraded Aviva to 'under-perform', although the target has been raised to 360p from 330p, while Deutsche bank has moved to a 'hold' recommendation and edged up the target from 360p to 375p. Imperial Tobacco and British American Tobacco did well after Nomura lifted its price targets on both this morning. Berenberg has initiated coverage of household goods colossus Unilever at buy. Mixed fortunes for extractors Gold exploration company Condor is celebrating a mineral resource of 2.41m ounces of gold equivalent at its wholly-owned La India Project in Nicaragua, with gold up 46 per cent to 2.375m oz, well ahead of the year-end target of 2.0m gold. The industrial dispute at Lonmin's South African operations drags on but there have been developments. Lonmin workers have been offered an additional one-time payment in exchange for them returning to work at the platinum mining company on Wednesday. A letter written by Lonmin directors to its workers is believed to have offered a 1,500 rand ($182, 140 euro) bonus in addition to an offer for an increased monthly wage of 1,875 rand ($227). The bonus will only be given if workers return on Wednesday. Things are not going so well for Royal Dutch Shell. After announcing delays to its offshore exploration programme in Alaska on Monday, reports on Tuesday suggest Royal Dutch Shell is also struggling with production targets in Iraq. Other markets Oil prices remain on the slide, despite the White House quashing rumours that strategic oil reserves may be released. The most active futures contract for Brent crude was off 30 cents to $113.47 a barrel. Gold for December delivery rose $2.10 to $1,772.70 an ounce, reversing losses seen in the morning. Investors nibbled away at gilts after the inflation data, with the benchmark 10-year gilt's yield easing 5/100 of a percentage point at 1.88%.

FTSE 100 - Risers
British American Tobacco (BATS) 3,243.00p +2.82%
United Utilities Group (UU.) 707.50p +2.76%
Diageo (DGE) 1,718.00p +2.05%
Imperial Tobacco Group (IMT) 2,362.00p +1.90%
Bunzl (BNZL) 1,103.00p +1.38%
Reckitt Benckiser Group (RB.) 3,627.00p +1.31%
Severn Trent (SVT) 1,708.00p +1.07%
Vodafone Group (VOD) 175.40p +1.01%
National Grid (NG.) 685.50p +0.96%
Pennon Group (PNN) 739.50p +0.75%

FTSE 100 - Fallers
Aviva (AV.) 344.90p -3.98%
GKN (GKN) 228.30p -3.63%
ICAP (IAP) 338.10p -3.48%
IMI (IMI) 931.50p -3.17%
BP (BP.) 438.95p -2.78%
Royal Bank of Scotland Group (RBS) 267.10p -2.66%
Lloyds Banking Group (LLOY) 38.85p -2.50%
Kazakhmys (KAZ) 742.00p -2.43%
Prudential (PRU) 821.50p -2.32%
Tullow Oil (TLW) 1,411.00p -2.29%

FTSE 250 - Risers
Dechra Pharmaceuticals (DPH) 592.50p +4.13%
Galliford Try (GFRD) 690.00p +2.68%
Genus (GNS) 1,432.00p +2.29%
PayPoint (PAY) 746.50p +2.26%
Centamin (DI) (CEY) 90.65p +2.20%
Carpetright (CPR) 672.00p +1.97%
Talvivaara Mining Company (TALV) 170.90p +1.73%
BH Global Ltd. USD Shares (BHGU) 11.7 +1.39%
COLT Group SA (COLT) 122.40p +1.24%
BH Global Ltd. GBP Shares (BHGG) 1,170.00p +1.04%

FTSE 250 - Fallers
Imagination Technologies Group (IMG) 534.00p -6.07%
Laird (LRD) 229.80p -5.78%
Homeserve (HSV) 227.90p -5.59%
Victrex (VCT) 1,371.00p -5.38%
Ocado Group (OCDO) 69.70p -5.30%
Inchcape (INCH) 376.80p -4.44%
Electrocomponents (ECM) 226.50p -4.31%
Paragon Group Of Companies (PAG) 208.20p -4.19%
Ferrexpo (FXPO) 215.30p -4.01%
Aquarius Platinum Ltd. (AQP) 50.90p -3.96%

FTSE TechMARK - Risers
AEA Technology Group (AAT) 0.090p +20.00%
Gresham Computing (GHT) 71.50p +8.33%
Skyepharma (SKP) 100.00p +5.26%

FTSE TechMARK - Fallers
Pace (PIC) 159.25p -4.21%
Emblaze Ltd. (BLZ) 46.00p -3.66%
Promethean World (PRW) 23.00p -2.13%
E2V Technologies (E2V) 135.00p -2.00%
Phoenix IT Group (PNX) 147.00p -2.00%

Europe Market Report

FTSE 100 Euronext Dax perf CAC 40

Europe close: Spain completes debt sale but stocks slide - Spain sees successful debt sale - Car sales weak across EU - Exhausted Akzo Nobel Chief Executive on sick leave FTSE 100: -0.43% Dax 30: -0.76% Stoxx 600: -0.44% Cac 40: -1.15% Ibex 35: -0.74% FTSE MIB: -2.39% European markets retreated on Tuesday despite a successful sale of Spanish debt and suggestions the debt-strapped country is prepared to make a formal request for assistance from the European Central Bank. Spain sold €4.6bn in 12 and 18 month debt at lower interest rates than a similar auction in August, with the one-year notes yielding 2.835% and the 18 month variety going at 3.072%. The Spanish government has yet to ask its Eurozone peers and the European Central Bank for formal assistance despite multiple banking failures and refinancing difficulties amongst its regional governments. Deputy Prime Minister, Saenz de Santamaria, indicated in a TV interview that, if the conditions imposed by the ECB were not too onerous, the country may be best served by a rescue. Meanwhile, the difficulties faced by car manufacturers was thrown into sharp relief by figures from the European Automobile Manufacturers' Association, or ACEA. The trade body said new car registrations fell to 722,483 in August, 8.5% lower than the same month last year. COMPANIES The bad news on car registrations battered the whole sector, with automobile & parts the worst performing sector on the Stoxx 600 index, falling 2.27%. The strongest sector was personal & household goods, which climbed 1.37%. Amongst the worst hit companies were Peugeot and Fiat. Another firm getting a hammering was paint maker, and owner of the Dulux brand, Akzo Nobel. Chief Executive Ton Beuchner has had to take one month's sickness leave to recover from fatigue. Concerns over his future are no doubt being expressed in the share price which fell 5.5%. Drugs firm Merck dropped 1.1% after saying it would give up trying to get permission to sell its lung cancer drug Erbitux in Europe following requests for more data from the European Medicines Agency.

US Market Report

US open: Investors worried by looming fiscal cliff -NAHB index ahead of forecasts, at 2006 highs -Positive comments out of Goldman Sachs on house-builders -Fed´S Evans backs QE3 completely -Fed´s Fisher argued against QE last week -More Fed speakers scheduled to speak tonight Dow Jones Industrial: -0.06% Nasdaq Comp.: -0.20% S&P 500: -0.24% The major US equity averages are registering slight falls. That as investors wonder aloud whether the recent market run-up was justified or not. Significantly in that regard, in a speech before the opening bell Chicago Fed President Charles Evans has indicated that he fully supports QE3, while adding that the central bank has other options at its disposal should it feel the need [to act again]. No less important, according to Bank of America-Merrill Lynch´s latest fund manager survey investors now see the looming US "fiscal cliff" as the biggest risk to overcome, and not the crisis in the Eurozone periphery. Back on the company front, economic bell-wether FedEx has warned on its profits for the next quarter. AMD may fall after its chief financial officer announced his departure. Also worth pointing out, JP Morgan has downgraded its view on shares of US Steel to underperform. BMO Capital has cut its price target on shares of AMD to $4 from $5. Alpha Natural Resources has announced 1,200 lay-offs, although retailer Kohl´s has unveiled plans to take on 52,700 temporary workers for the holiday season, 10% more than in 2011. More data on tap Long-term capital inflows rose to $73.7bn in July, after the previous month´s reading of $15.1bn. Weekly comparable retail sales fell 2.5% week-on-week according to the latest ICSC data. The NAHB´s housing market index for the month of September has come in at 40 points, after a reading of 37 in the month before (Consensus: 38). The country´s current account deficit decreased to $117bn in quarter two (Consensus: -$125bn), versus the $133bn seen in the previous three months. Treasuries rise Front month West Texas crude futures are now falling 0.89%, to the 95.76 dollar mark in NYMEX trading. 10 year US Treasuries are gaining by 16/32 dollars, with yields at 1.79%. S&P 500 - Risers F5 Networks Inc. (FFIV) $111.05 +6.31% Tenet Healthcare Corp. (THC) $6.07 +2.71% Netflix Inc. (NFLX) $58.24 +2.15% Cliffs Natural Resources Inc. (CLF) $43.17 +1.91% DeVry Inc. (DV) $23.27 +1.66% First Solar Inc. (FSLR) $23.62 +1.62% Gannett Co. Inc. (GCI) $18.00 +1.58% Broadcom Corp. (BRCM) $36.66 +1.58% Cabot Oil & Gas Corp. (COG) $45.78 +1.55% Intuitive Surgical Inc. (ISRG) $517.75 +1.46% S&P 500 - Fallers Advanced Micro Devices Inc. (AMD) $3.79 -5.49% Phillips 66 Common Stock (PSX) $44.65 -3.23% Marathon Petroleum Corporation (MPC) $51.98 -3.09% Safeway Inc. (SWY) $16.19 -2.82% Bed Bath & Beyond Inc. (BBBY) $68.81 -2.77% Boston Scientific Corp. (BSX) $5.63 -2.59% E*TRADE Financial Corp. (ETFC) $9.28 -2.52% FedEx Corp. (FDX) $87.60 -1.88% Ventas Inc. (VTR) $64.02 -1.82% Pioneer Natural Resources Co. (PXD) $109.98 -1.82% Dow Jones I.A - Risers Caterpillar Inc. (CAT) $92.79 +0.87% Coca-Cola Co. (KO) $38.66 +0.81% Johnson & Johnson (JNJ) $68.40 +0.22% McDonald's Corp. (MCD) $92.31 +0.18% Chevron Corp. (CVX) $117.33 +0.16% Boeing Co. (BA) $70.01 +0.13% Cisco Systems Inc. (CSCO) $19.18 +0.10% Verizon Communications Inc. (VZ) $44.62 +0.09% International Business Machines Corp. (IBM) $207.29 +0.07% Exxon Mobil Corp. (XOM) $91.96 +0.05% Dow Jones I.A - Fallers Bank of America Corp. (BAC) $9.15 -1.61% Alcoa Inc. (AA) $9.46 -1.25% JP Morgan Chase & Co. (JPM) $40.83 -0.87% AT&T Inc. (T) $37.30 -0.80% Hewlett-Packard Co. (HPQ) $18.10 -0.60% United Technologies Corp. (UTX) $81.69 -0.55% Walt Disney Co. (DIS) $51.87 -0.54% Home Depot Inc. (HD) $58.60 -0.53% Travelers Company Inc. (TRV) $68.12 -0.53% American Express Co. (AXP) $58.89 -0.49% Nasdaq 100 - Risers F5 Networks Inc. (FFIV) $111.05 +6.31% Netflix Inc. (NFLX) $58.24 +2.15% Broadcom Corp. (BRCM) $36.66 +1.58% Intuitive Surgical Inc. (ISRG) $517.75 +1.46% Vodafone Group Plc ADS (VOD) $28.66 +1.44% Seagate Technology Plc (STX) $30.15 +1.34% BMC Software Inc. (BMC) $43.51 +1.21% Warner Chilcott Plc (WCRX) $12.99 +1.21% Apollo Group Inc. (APOL) $29.25 +1.04% Expedia Inc. (EXPE) $55.50 +0.93% Nasdaq 100 - Fallers Bed Bath & Beyond Inc. (BBBY) $68.81 -2.77% Green Mountain Coffee Roasters Inc. (GMCR) $30.28 -1.85% Sirius Satellite Radio Inc. (SIRI) $2.36 -1.26% Flextronics International Ltd. (FLEX) $6.42 -1.23% Micron Technology Inc. (MU) $6.50 -1.07% Applied Materials Inc. (AMAT) $11.81 -1.05% eBay Inc. (EBAY) $49.97 -1.02% Avago Technologies Ltd. (AVGO) $34.93 -0.99% Adobe Systems Inc. (ADBE) $33.08 -0.98% Whole Foods Market Inc. (WFM) $96.75 -0.89%

Broker Tips

Broker tips: British American Tobacco, Imperial, Galliford, StanChart After reviewing key news-flow across the industry in the prior month as well as the latest market data for Spain and Japan cigarettes, Swedish and US smokeless, and US cigars, analysts at Nomura have up-dated their forecasts and price targets for the companies within this sector where appropriate. In fact, Nomura raised its price targets on all the tobacco names it covers as a result of its updated WACC (weighted average cost of capital) estimates. These are meant to reflect its new assumptions around the risk free rate and equity risk premium. As well, the broker explains that it has also updated its cost of debt estimates where appropriate. Its new target prices are: BAT 3500p (+3.5%), PMI USD 80.50 (+3.0%), Imperial 2230p (+1.5%) and Swedish Match SEK 285 (+3.5%). Its favourite stock is British American Tobacco. Analysts at Peel Hunt have today issued a relatively upbeat note on shares of house-building and construction outfit Galliford. In their own words, “The three-year growth plan has more than delivered, with profit before tax (PBT) of £63m. Driving for a 300 basis-point gain in margins over and above market-driven improvements is the new target and should help deliver profit before tax in fiscal year 2015 of £100m (96p). Dividend policy has been improved again and, on delivery of this result in fiscal year 2015, we forecast dividends per share of 55p. The shares remain cheap on a year three price-to-earnings multiple of less than 7x and a yield of above 8%; our target price of 825p has scope to increase.” Following Standard Chartered´s Investor Day analysts at Credit Suisse (CS) have decided to remain Neutral while maintaining their price target of 1,460p. That despite the lender reiterating existing targets and with management seen remaining confident. Thus, says Credit Suisse, “we see the risks and rewards as evenly balanced at current levels, although in the short term there could be positive news flow on the US litigation.”