ADVFN III Evening Euro Markets Bulletin -Monday, September 3rd. 2012-.

	ADVFN III	Evening Euro Markets Bulletin
	Daily world financial news

Monday, 03 September 201

London Market Report

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

London close: Miners jump on hopes of central bank action Market Movers techMARK 2,107.18 +0.53% FTSE 100 5,758.41 +0.82% FTSE 250 11,503.13 +0.81% - Central banks in China, US and Europe expected to act - UK manufacturing beats expectations - Fresnillo leads miners higher Stocks markets in the States may have been closed for Labour Day but that didn't stop bourses in Europe from registering decent gains on Monday, with London's Footsie starting the week strongly, up 0.82 per cent on the day. "Despite continued poor economic data from China, as well as Europe, investors appear to be taking comfort from the fact that this is likely to make further monetary easing more likely in the near term, thus supporting asset prices," said market analyst Michael Hewson from CMC Markets. According to a monthly survey by HSBC, the China manufacturing purchasing managers' index (PMI) dropped from 49.3 in July to 47.6 in August, its lowest reading since March 2009. The news follows the official PMI data from last week which fell to a nine-month low of 49.2. Any figure below 50 indicates a contraction. "However, the data does suggest that Chinese policymakers have plenty of room to promote easing tools to spur growth and have previously this year re-armed the country by cutting rates. As such, hopes that China will soon have no choice but to stimulate growth have been the main driver of today's gains," said market strategist Ishaq Siddiqi from ETX Capital. The UK's own manufacturing data beat expectations last in August, though it still posted its fourth straight month of contraction. The manufacturing PMI rose to 49.5, from 45.2 in July, a four-month high and better than the 46 reading expected by analysts. Nevertheless, the focus of the markets this week will undoubtedly be on the European Central Bank (ECB) monetary policy meeting on Thursday at which President Mario Draghi is widely expected to unveil plans for buying sovereign debt in order to bring down bond yields in peripheral nations. Following on from last week's climax of the Federal Reserve Chairman Ben Bernanke's closely watched speech at the Jackson Hole symposium, markets widely believe that further quantitative easing (QE) is now on the cards for the central bank's next meeting on September 13th and 14th. A close eye will be keep on the upcoming payrolls and manufacturing figures due out this week in the US, which will likely be the deciding factor in whether the Fed pulls the trigger or not. FTSE 100: Miners gain on stimulus hopes A strong showing by the miners assured that the Footsie was firmly in the red on Monday afternoon in spite of some steep falls for some heavyweight stocks, such as Glencore, Admiral and ARM Holdings. Disappointing Chinese economic figures, which usually results in a sell-off in the mining sector, had the adverse effect today as speculation mounted that Chinese policy-makers would act to stimulate the world's second-largest economy, one of the biggest sources of demand for the miners. Meanwhile, precious metals peers Fresnillo and Randgold were among the highest risers on hopes that silver and gold prices (dollar-denominated commodities) will rise as the US dollar weakens after the potential launch of QE3. Other miners, such as Vedanta, Kazakhmys and Rio Tinto, also finished the day with decent gains. However, Glencore was bucking the trend on the back of rumours that it will be sticking to its original offer for mining group Xstrata in spite of growing opposition to the terms. Qatar Holdings, which owns around 12% of the group, confirmed last week that it would vote against the merger at the shareholder meeting on Friday. Car insurance giant Admiral was under heavy selling pressure on Monday afternoon after Credit Suisse downgraded its rating on the shares from 'outperform' to 'neutral', saying that there isn't much upside left in the stock. Canaccord Genuity also downgraded Admiral to 'sell' today, while Exane BNP Paribas reiterated its 'underperform' recommendation. Chip group ARM Holdings was also lower after Deutsche Bank downgraded its recommendation from 'hold' to 'sell'. "Despite reflecting many of ARM's long-term growth drivers such as rising royalty rates and penetration of new markets in our model, we expect ARM's [earnings per share] growth to slow down to mid-teens," said analyst Kai Korschelt. FTSE 250: Talvivaara gains after reassuring investors Finnish zinc and nickel mining company Talvivaara was a high riser after it denied it will be cutting jobs as part of a cost savings plan. Rumours had been circulating that the low price of nickel would force a reduction in headcount. Shares in Lonmin, one of the world's biggest platinum producers, rose on after reports the firm had agreed details of a wage deal with striking miners. Work on the company's Marikana project in South Africa has been at a standstill for three weeks after a pay dispute turned violent, culminating in a bloody showdown with police that left 34 miners dead. Africa-focused oil group Ophir Energy rose after significantly upping estimates of potential resources at one of its sites in Tanzania. Meanwhile, house-builders were on the up after Panmure Gordon today lifted its targets across the sector. Barratt Developments, Taylor Wimpey and Bovis Homes all benefitted from the forecast change. FTSE 100 - Risers Fresnillo (FRES) 1,627.00p +4.23% Kazakhmys (KAZ) 610.00p +2.87% Vedanta Resources (VED) 892.00p +2.82% Sage Group (SGE) 303.50p +2.46% Wolseley (WOS) 2,602.00p +2.36% BT Group (BT.A) 222.50p +2.25% Rio Tinto (RIO) 2,795.50p +2.19% Hargreaves Lansdown (HL.) 633.00p +1.93% Next (NXT) 3,644.00p +1.93% Tullow Oil (TLW) 1,389.00p +1.91% FTSE 100 - Fallers Admiral Group (ADM) 1,150.00p -3.04% ARM Holdings (ARM) 559.50p -2.53% Aggreko (AGK) 2,337.00p -0.97% Morrison (Wm) Supermarkets (MRW) 278.20p -0.64% Ashmore Group (ASHM) 327.00p -0.61% Resolution Ltd. (RSL) 214.60p -0.56% Kingfisher (KGF) 274.10p -0.54% Xstrata (XTA) 947.20p -0.53% Severn Trent (SVT) 1,726.00p -0.29% ICAP (IAP) 316.90p -0.25% FTSE 250 - Risers Talvivaara Mining Company (TALV) 140.00p +11.64% Barratt Developments (BDEV) 158.60p +5.73% Persimmon (PSN) 734.00p +5.16% Centamin (DI) (CEY) 83.25p +4.72% Soco International (SIA) 351.50p +4.36% Bovis Homes Group (BVS) 492.60p +4.10% Hochschild Mining (HOC) 450.00p +4.05% Taylor Wimpey (TW.) 53.25p +3.90% Ophir Energy (OPHR) 586.00p +3.81% Phoenix Group Holdings (DI) (PHNX) 507.50p +3.57% FTSE 250 - Fallers CSR (CSR) 310.00p -4.79% Bumi (BUMI) 303.20p -4.65% Petra Diamonds Ltd.(DI) (PDL) 101.70p -2.68% Menzies(John) (MNZS) 613.50p -2.62% Redrow (RDW) 151.10p -2.58% Cape (CIU) 237.00p -2.23% Heritage Oil (HOIL) 190.10p -2.01% Kentz Corporation Ltd. (KENZ) 390.10p -1.86% Henderson Group (HGG) 104.20p -1.79% PayPoint (PAY) 705.00p -1.67% Europe Market Report FTSE 100 Euronext Dax perf CAC 40 Europe close: All eyes on ECB bond plan European stocks up - Draghi hints at three year bond purchases - Nokia comeback continues FTSE 100:+0.82% Dax 30:+0.63% Stoxx 600: +0.84% Cac 40: +1.19% Ibex 35: +0.18% FTSE MIB: +1.10% European markets climbed on Monday as hopes for central bank stimulus rose on both sides of the Atlantic. European Central Bank President Mario Draghi is expected to unveil a bond buying programme after the bank's policy meeting on September 6th. On monday he was quoted as telling lawmakers at the European Parliament that the ECB is considering purchasing bonds with maturities of up to three years. Last week Draghi's US counterpart, Fed Chairman Ben Bernanke indicated he too was open to "non-conventional" measures which most observers have interpreted as opening the door to further bond purchases. The UK based research firm Markit Economics says the European manufacturing sector contracted by more than initially estimated in August. Its manufacturing Purchasing Manager's Index for the euro area was revised downward to 45.1 from an initial estimate of 45.3. Anything below 50 implies the sector is shrinking. COMPANIES Food and beverage stocks were the strongest on the Stoxx 600, rising 1.38%. The weakest segment was automobiles & parts, which fell 0.93%. Italian drinks maker Campari will buy Jamaican rum maker Lascelles DeMercado for $414.8m in a bid to hasten its push into overseas markets. It rose around 7%. Nokia continued its recent comeback, rising 4.7% as investors wonder, post Apple's court victory over Samsung, whether the ailing Finnish firm may yet yield more value. The Spanish government is expected to inject up to €5bn into failed lender Bankia, which has just reported a €4.45bn first half loss. The group gained 8% on the news. Fresenius Medical (+0.76%) has abandoned its takeover offer for Rhone Klinikum. OTHER MARKETS The euro was up 0.14% against the dollar at $1.2596 at 17:02. Futures contracts on a barrel of brent crude had risen 0.81% by 16:53. CAC 40 - Risers Pernod Ricard (RI) € 88.67 +3.50% Cap Gemini (CAP) € 30.00 +2.65% Sanofi (SAN) € 66.51 +2.24% L'Oreal (OR) € 99.73 +2.04% Technip (TEC) € 85.27 +1.83% Danone (BN) € 50.40 +1.72% Vallourec (VK) € 37.50 +1.71% Essilor International (EI) € 70.57 +1.70% Saint Gobain (SGO) € 27.73 +1.65% Accor (AC) € 25.62 +1.63% CAC 40 - Fallers Renault (RNO) € 36.82 -0.93% Peugeot (UG) € 5.96 -0.91% Credit Agricole (ACA) € 4.62 -0.45% ST Microelectronics (STM) € 4.71 -0.15% US Market Report Markets Closed Broker Tips Broker tips: Morrisons, Prudential, Home Retail Nomura has downgraded its rating for supermarket group Morrisons after analysing the recent Kantar grocery survey. According to the survey, Morrisons' volume growth lagged behind its counterparts by around 4% at the last data point. "We recognise MRW's ability to preserve profitability, having faced volume headwinds from both Asda's Netto conversions (abating) and TSCO's reset (ongoing), and expect resilient H1 interims (September 6th). However, MRW's survey volume trend proves the tipping point for us to revise our recommendation to 'neutral' (from 'buy')," the broker said. Galvan Research and Trading has recommended to buy shares of insurance giant Prudential, saying that the stock's recent underperformance is 'unwarranted'. "Although recent weeks have seen the market plump for sector peer Aviva rather than Prudential, Galvan Research regards the Pru as a 'buy' on the basis of the recent relative share price underperformance and the fact that the fundamental downside remains cushioned by very strong Asian growth," said Galvan's head of research, Andrew Gibson. Investec has upgraded its rating for Argos and Homebase owner Home Retail Group, saying that the firm's second-quarter trading statement next week could see a pick up in sentiment. "While the market short position in Home Retail has retreated, it remains very high and we therefore believe the shares should react positively to evidence of more resilient trading at Argos," Investec said on Monday morning. "With share price risk weighted to the upside in our view, we are therefore moving from 'sell' to 'buy', with a new target of 109p (70p previously)."