London close: Sandy aftermath and Eurozone concerns sink stocks
Market Movers
- techMARK 2,082.56 -0.96%
- FTSE 100 5,782.70 -1.15%
- FTSE 250 11,934.95 -0.16%
The resumption of trading on Wall Street after a two-day closure and a meeting of Eurozone finance ministers was enough to weigh on London's stock market on Wednesday, not to mention some sharp falls from heavy hitters BG Group and Barclays.
US benchmarks re-opened in the red today after Hurricane Sandy left millions without power and killed dozens on the American East Coast. This was the first time since 1888 that the weather has halted trading for two consecutive days.
Market analyst Craig Erlam from Alpari said this afternoon: "There are no real surprises to what we have seen since the markets opened in the US. Insurance companies are trading lower following the devastating effects of Hurricane Sandy. It is too early to tell at this point what the cost of the damage will be to insurance companies, but early estimates suggest it could be up to $15 billion, severely damaging fourth-quarter profits."
On this side of the Atlantic, Eurozone finance ministers today urged Greek leaders "to solve remaining issues so as to swiftly finalise the negotiations [with the Troika]," according to Eurogroup head and Luxembourg Prime Minister Jean-Claude Juncker.
German Finance Minister Wolfgang Schaeuble reportedly said that it is unlikely that the Troika will receive the final report on Greece before the next Eurogroup meeting of finance ministers on November 11-12th. That means that traders will have to wait a little bit longer for any possible solution to the current impasse in Greece.
Meanwhile, in perhaps the most specific reference to the timing of a full bailout request, Spanish government sources have told local radio station SER that a request for international aid should not be expected this year. FTSE 100: BG dives after slashing production guidance
BG Group shocked the market today by cutting back production guidance as a result of a number of delays to project start-ups. It now expects full-year production will be just 3% higher than in 2011, while 2013 output is not expected to show any growth at all.
The firm also announced that it would be selling 40% of certain interest in its Queensland Curtis LNG project in Australia for $1.93bn, as well as a sale of LNG from its global LNG portfolio. Seymour Pierce analyst Sam Wahab however noted that the group currently has an asset divestment programme to reduce net debt exposure, and thinks the sudden announcement of the disposal "would suggest that the disposal of their Australian LNG interest was forced upon them rather than a strategic decision."
UK banking giant Barclays dropped despite meeting forecasts in the third quarter with strong growth seen in adjusted pre-tax profits, from £1.34bn to £1.73bn. The firm however revealed new "legal and regulatory matters" which include two new probes in the US.
Pharmaceuticals giant GlaxoSmithKline's third-quarter figures came in short of expectations on most fronts, while full-year sales are now expected to be little changed from 2011. Against expectations of earnings per share (EPS) of 28.7p, Glaxo delivered 26.5p, down 13% year-on-year or down 11% on a constant exchange rates (CER) basis.
Meanwhile, shares in oil and gas producer Tullow Oil surged after the firm announced that its Twiga South-1 exploration well onshore Kenya Block 13T has successfully encountered oil. Sector peer Petrofac was also higher.
Life assurance company Standard Life gained after saying inflows across its long-term savings businesses plus a strong performance at Standard Life Investments helped to increase both group assets under administration and Standard Life Investments third party assets to record levels.
International Consolidated Airlines Group (IAG) gained back some of its losses made earlier this week as the passing of Hurricane Sandy made it once again possible to operate trans-Atlantic routes.
FTSE 250: St James's Place rises on FuM increase
Wealth management group St James's Place rose strongly after reporting a 6% increase in funds under management (FuM) in the third quarter as it reported good growth in new business despite the continuing macroeconomic uncertainty.
Energy company Essar was higher after gaining permission to chop down trees close to its Mahan coal block.
Afren, the energy firm focused in Africa and the Middle East, rose after announcing that it has seen the flow of first oil at its Okoro field extension, off the coast of south east Nigeria.
Meanwhile, Go-Ahead Group and National Express were both taking a hit, which may be linked to the numerous reports coming out of the US which state there have been significant disruptions to transport in the hurricane-hit country, where both companies operate. There have been no confirmed reports of either vehicle or equipment damage.
FTSE 100 - Risers
Petrofac Ltd. (PFC) 1,604.00p +3.62%
Standard Life (SL.) 292.00p +2.24%
Resolution Ltd. (RSL) 218.30p +2.15%
Randgold Resources Ltd. (RRS) 7,400.00p +2.07%
International Consolidated Airlines Group SA (CDI) (IAG) 161.30p +1.70%
Tullow Oil (TLW) 1,404.00p +1.59%
Fresnillo (FRES) 1,919.00p +1.48%
Kingfisher (KGF) 289.50p +1.26%
Pearson (PSON) 1,245.00p +1.06%
Melrose (MRO) 241.00p +1.05%
FTSE 100 - Fallers
BG Group (BG.) 1,147.50p -13.69%
Barclays (BARC) 227.50p -4.73%
Croda International (CRDA) 2,201.00p -2.83%
Kazakhmys (KAZ) 709.00p -2.81%
Severn Trent (SVT) 1,606.00p -2.73%
United Utilities Group (UU.) 677.00p -2.59%
GlaxoSmithKline (GSK) 1,386.50p -2.36%
Eurasian Natural Resources Corp. (ENRC) 327.70p -2.03%
Anglo American (AAL) 1,903.00p -1.76%
Royal Bank of Scotland Group (RBS) 276.00p -1.71%
FTSE 250 - Risers
F&C Asset Management (FCAM) 99.00p +4.71%
St James's Place (STJ) 397.00p +4.56%
Ferrexpo (FXPO) 208.90p +4.45%
Essar Energy (ESSR) 136.90p +4.11%
Afren (AFR) 137.70p +3.46%
Kentz Corporation Ltd. (KENZ) 411.50p +3.00%
IP Group (IPO) 118.20p +2.78%
Elementis (ELM) 209.30p +2.50%
Ashtead Group (AHT) 373.00p +2.30%
Atkins (WS) (ATK) 714.00p +2.07%
FTSE 250 - Fallers
New World Resources A Shares (NWR) 256.50p -5.49%
Go-Ahead Group (GOG) 1,298.00p -5.46%
Man Group (EMG) 78.45p -4.50%
Spirent Communications (SPT) 143.70p -4.14%
National Express Group (NEX) 170.20p -4.00%
COLT Group SA (COLT) 110.50p -3.32%
ITE Group (ITE) 193.20p -3.11%
Imagination Technologies Group (IMG) 456.60p -2.85%
Moneysupermarket.com Group (MONY) 134.00p -2.76%
Halfords Group (HFD) 345.60p -2.59%
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Europe midday: Stocks waiting on Eurozone finance ministers
-Spanish central government budget deficit falls to 4.39 per cent
-Eurogroup teleconference now in progress
-Eurozone banks tightened lending standards in third quarter -ECB
FTSE-100: -0.14%
Dax-30: 0.60%
Cac-40: 0.31%
FTSE Mibtel 30: 0.98%
Ibex 35: 0.74%
Stoxx 600: 0.20%
For the most part the major European equity benchmarks are now trading moderately higher.
That ahead of what may turn out to be a somewhat haphazard re-start to trading Stateside, a few observers are worrying. In a more positive vein, investors seem to be concentrating on the positive macroeconomic data out today in Germany, which has come alongside some better than expected company results.
Acting as a backdrop we have this afternoon´s result of the conference-call between Eurozone finance ministers to discuss the situation in Greece, which is now in progress. No firm new decisions are expected but the news flow could conceivably influence markets.
Also of interest, according to the European Central Bank´s (ECB) latest bank lending survey a net 15% of the Eurozone´s banks which took part in the survey tightened their criteria for firms to borrow in the third quarter, up from 10% in the second quarter. Large rises in airline groups
Air France-KLM is jumping 7% higher after Europe's largest airline reported a 27% increase in third- quarter operating profit to €506m (£408m), far ahead of consensus estimates, as did its close rival Air France.
ArcelorMittal is lower after earnings before interest, taxes, depreciation and amortization (EBITDA) dropped to $1.34bn (£832m) from $2.41bn a year ago, which was actually what was expected by analysts.
From a sector stand-point the best performance on the Stoxx 600 is now to be seen in the following industrial groups: Automobiles (1.18%), Insurance (0.91%) and Telecommunications (0.66%).
Eurozone unemployment at new record
Spain´s current account surplus increased to €1.2bn in August, above the previous month´s reading of €0.5bn.
The Eurozone´s unemployment rate rose by a tenth of a percentage point in September, to 11.6%, from a revised 11.5% in the month before (Consensus: 11.5%).
The Eurozone´s consumer price index for the month of October dropped to 2.5% year-on-year from 2.6% in the previous month.
German retail sales grew by 1.5% month-on-month in September (Consensus: 0.3%), versus last month´s reading of 0.3%.
French producer prices increased at a 0.3% month-on-month pace in September (Consensus: 0.2%).
French consumer spending rose by 0.1% month-on-month in September (Consensus: 0.2%), after a fall of 0.8% in August.
Spanish housing permits dropped by 37.2 month-on-month in August, after an increase of 10.6% in July.
Capital flight from Spain slowed down somewhat in August, by -34.7%, to €247.2bn.
Slight rise in crude futures
The euro/dollar is now up by 0.29% to the 1.3010 mark.
Front month Brent crude futures are rising by 0.493 dollars to the 109.62 dollar level on the ICE.
| US Market Report | US open: Stocks off on last day of the year for mutual funds
-Last day of the year today for many mutual funds
-Apple at 200 day moving average support
-Lock-up expiry today on Facebook
-Eurozone news weighing on stocks
Dow Jones Industrial: -0.09%
Nasdaq Comp.: -0.70%
S&P 500: -0.21%
Wall Street has fallen into the red, weighed down by the negative news-flow coming out of the Eurozone and weakness in shares of Apple.
Germany´s Finance Minister has reportedly said that it is unlikely that the Troika of international lenders will receive the final report on Greece before the next Eurogroup meeting of finance ministers on November 11th to 12th. That means that traders will have to wait a little bit longer for any possible solution to the current impasse in Greece.
In parallel, the Aegean nation´s two main labour unions have just called for a nation-wide strike.
While it will take time to return to normality in Big Apple a modicum of it is expected to be achieved today on the trading floors. Nevertheless, and as NYSE-Euronext´s Chief Executive signaled overnight, it would not be realistic to expect a completely normal day. Apple weighs on all
Apple is off after its Chief Executive today announced a partial re-organization of the company´s top ranks.
GM and Ford have both released better than expected quarterly results. Of interest as well, Home Depot and Lowe´s are expected to do well, in anticipation that they will benefit from repair and reconstruction efforts.
Walt Disney is to acquire Lucasfilm for $4.03bn.
According to some reports Microsoft will finally not be making an offer for Netflix.
Not to be lost sight of either, investors are also keen to see next Friday´s monthly employment report.
Of interest, today is the last day of the month and of the year for some mutual funds, with the next two months being historically quite positive for shares, as funds seek to re-position themselves.
NAPM Chicago below 50
The employment cost index for the third quarter showed a 0.4% quarter-on-quarterly gain in the three months to September, slightly below the 0.5% economists had foreseen.
The Chicago NAPM regional manufacturing sector purchasing managers´ index for the month of October has come in at 49.9 (just below the contractionary level of 50), versus last month´s reading of 49.7 (Consensus: 51). The new orders sub-index however actually moved up, to 50.6 from 47.4 in September.
For economists at Barclays Research: "(…) In our view, current levels of correlation are not consistent with recessionary conditions, and we believe that local trends will play a more prominent role in these regional indices over the medium term." Little movement in other asset classes
10 year US Treasuries are falling by 4/32 dollars this morning, with yields left standing at 1.70%.
Front month West Texas crude futures are rising by 0.72% to the 86.30 dollar level on the NYMEX.
S&P 500 - Risers
Genworth Financial Inc. (GNW) $5.89 +7.48%
Quanta Services Inc. (PWR) $25.14 +6.53%
Ford Motor Co. (F) $10.93 +5.45%
Leggett & Platt Inc. (LEG) $26.75 +5.31%
Federated Investors Inc. (FII) $22.94 +4.13%
Eaton Corp. (ETN) $46.90 +3.95%
Flowserve Corp. (FLS) $135.24 +3.29%
Fastenal Co. (FAST) $44.51 +2.94%
Masco Corp. (MAS) $14.99 +2.67%
Electronic Arts Inc. (EA) $12.22 +2.60%
S&P 500 - Fallers
Western Union Co. (WU) $13.22 -26.27%
CBRE Group Inc (CBG) $17.01 -6.79%
Sears Holdings Corp. (SHLD) $62.19 -6.76%
JDS Uniphase Corp. (JDSU) $9.65 -6.62%
QEP Resources Inc (QEP) $29.56 -6.10%
Cameron International Corp. (CAM) $48.35 -5.64%
VeriSign Inc. (VRSN) $37.65 -4.42%
J.C. Penney Co. Inc. (JCP) $24.43 -4.05%
Biogen Idec Inc. (BIIB) $137.83 -3.57%
Monster Beverage Corp (MNST) $44.24 -3.53%
Dow Jones I.A - Risers
Home Depot Inc. (HD) $61.06 +1.70%
Microsoft Corp. (MSFT) $28.68 +1.67%
International Business Machines Corp. (IBM) $196.14 +1.48%
Bank of America Corp. (BAC) $9.23 +1.21%
Caterpillar Inc. (CAT) $85.05 +0.95%
JP Morgan Chase & Co. (JPM) $41.39 +0.56%
United Technologies Corp. (UTX) $78.63 +0.55%
Exxon Mobil Corp. (XOM) $90.96 +0.38%
Coca-Cola Co. (KO) $37.18 +0.37%
Procter & Gamble Co. (PG) $69.59 +0.22%
Dow Jones I.A - Fallers
Walt Disney Co. (DIS) $49.19 -1.78%
Pfizer Inc. (PFE) $25.02 -1.61%
Cisco Systems Inc. (CSCO) $17.06 -1.33%
Intel Corp. (INTC) $21.75 -0.93%
Mondelez International Inc. (MDLZ) $26.41 -0.71%
Chevron Corp. (CVX) $110.40 -0.70%
Travelers Company Inc. (TRV) $71.09 -0.66%
E.I. du Pont de Nemours and Co. (DD) $44.90 -0.62%
Hewlett-Packard Co. (HPQ) $14.01 -0.57%
Boeing Co. (BA) $70.78 -0.46%
Nasdaq 100 - Risers
Fastenal Co. (FAST) $44.51 +2.94%
Electronic Arts Inc. (EA) $12.22 +2.60%
CH Robinson Worldwide Inc (CHRW) $60.83 +2.39%
Research in Motion Ltd. (RIMM) $7.72 +1.92%
Infosys Technologies Ltd. (INFY) $43.40 +1.71%
Microsoft Corp. (MSFT) $28.68 +1.67%
Virgin Media Inc. (VMED) $32.98 +1.45%
Apollo Group Inc. (APOL) $20.00 +1.42%
Netflix Inc. (NFLX) $70.52 +1.35%
Costco Wholesale Corp. (COST) $98.13 +1.23%
Nasdaq 100 - Fallers
Sears Holdings Corp. (SHLD) $62.19 -6.76%
Baidu Inc. (BIDU) $108.66 -4.55%
VeriSign Inc. (VRSN) $37.65 -4.42%
Biogen Idec Inc. (BIIB) $137.83 -3.57%
Monster Beverage Corp (MNST) $44.24 -3.53%
Vertex Pharmaceuticals Inc. (VRTX) $48.04 -3.07%
Seagate Technology Plc (STX) $27.12 -2.83%
eBay Inc. (EBAY) $48.30 -2.44%
Amazon.Com Inc. (AMZN) $232.86 -2.26%
Apple Inc. (AAPL) $590.61 -2.22% |
| Broker Tips | Broker tips: Barclays, BG Group, Lonmin
Nomura has maintained its 'reduce' rating and 210p target for UK banking giant Barclays, labelling the firm's third-quarter results as 'underwhelming'.
The broker said in a 'First Look' research report that, given Barclays had pre-announced, the focus was on whether the underlying mix of earnings was better.
"Relative to our expectations, BarCap was weaker and Head Office was better, which we find uninspiring. In terms of group earnings, income and costs were both lower than our expectations (a function of our higher BarCap expectations) and LLPs were better."
Seymour Pierce has said that oil and gas firm BG Group's third-quarter results on the whole represent a "mixed bag of contradictory statements and transactions".
Whilst Seymour Pierce does not have a rating and target for BG Group, analyst Sam Wahab said: "In view of BP's consensus beating Q3 results this week, the market may see their shares as representing better value than BG's going forward."
Credit Suisse has upgraded its rating for platinum miner Lonmin from 'underperform' to 'neutral' after the 800m-dollar fully underwritten rights issue.
Following Tuesday's rights issue news, the broker said: "we believe that the company will remain well capitalised for the next three years on both spot and base case forecasts." Credit Suisse says that the stock is "no longer a sell" given Lonmin's "significant operational leverage to a potentially tightening platinum market". |
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