London close: Stocks hold on to gains despite Eurozone uncertainty
Market Movers
- techMARK 2,094.74 +0.12%
- FTSE 100 5,805.61 +0.21%
- FTSE 250 11,855.67 +0.15%
- Chinese data and US figures lift sentiment
- All eyes on Spain and Greece ahead of EU summit
- Citi economist predicts 'Grexit'
London's FTSE 100 index finished the day in positive territory after some better-than-expected results from Citigroup and retail sales figures in the US boosted buying in afternoon trade.
Stocks were given a lift early on after export data from China beat expectations: exports rose by 9.9% in September to a record monthly high, well ahead of the prior month's 2.7% rise and better than the consensus estimate of a 5.5% gain.
However, the focus on stock markets continues to be on the Eurozone with speculation about a Spanish bailout and Greek exit doing the rounds ahead of the EU summit on Thursday. One anonymous official told Reuters that Spain is likely to request aid in November, despite the government's insistence that it does not need help.
"The source said that if Spain does request a bailout this is likely to be dealt with in conjunction with a revised loan programme for Greece. Although sentiment has changed somewhat some investors are still waiting for more details on how Spain would be bailed out and how ministers would avoid the mistakes made when Greece was rescued," said trader Matthew Nelson from Spreadex this afternoon.
German Finance Minister Wolfgang Schaeuble said this weekend that a Greek default "will not happen", pushing Greek 10-year bond yields on the secondary market to their lowest level since the debt restructuring in March.
Citi's Chief Executive William Butler argued today in the Financial Times that Greece will exit the Eurozone unless it obtains a de factor write-off of the €300bn in remaining sovereign debt.
He also said: "Also necessary to save the euro and create the conditions for a resumption of growth is a restructuring of the debt of the most likely insolvent sovereigns – Greece, Portugal, Ireland, Cyprus and possibly Spain, Italy and Slovenia." FTSE 100: Kingfisher on the up after investor day
DIY shop retailer Kingfisher was a high riser following an analyst visit to its Screwfix operations on Friday. Espirito Santo, Jefferies and Panmure Gordon reiterated their 'buy' ratings on the stock today, while speculation that the company is thinking of launching its Screwfix chain in France was lifting shares.
"Kingfisher's Investor Day provided interesting insights into the growth outlook at B&Q and Screwfix. The former is relatively mature and will benefit from group scale in common ranging and direct sourcing, while the latter still has significant organic growth opportunity and is leading the group's multichannel strategy," said analyst Philip Dorgan from Panmure Gordon. "While there are some headwinds to overcome, we believe that Kingfisher's long term growth prospects mean that the current valuation of 11.8x trough earnings is a good entry point."
Financial services provider Hargreaves Lansdown continued to make gains following Friday's interim results, in which it reported record levels of revenue, assets under administration and client numbers in the second quarter.
UK lenders HSBC, Barclays and Lloyds were in demand this afternoon but part-nationalised lender Royal Bank of Scotland (RBS) was bucking the trend. RBS fell after confirming that Spanish banking giant Santander is going back on its agreement to purchase 316 RBS branches in the UK.
Emerging markets-focused bank Standard Chartered was making gains after analysts at Citi named it as one of their most preferred stocks. The broker said that the lender has underperformed its peers in the European bank sector during the third quarter and by 15% in the year-to-date.
Mining peers Kazakhmys, Evraz, Anglo American and Rio Tinto were firmly lower after Goldman Sachs downgraded its ratings on all four stocks.
Meanwhile, Babcock, the engineering support services firm, was on the up after Bank of America Merrill Lynch hiked its target for the shares by over 20% from 870p to 1,050p. However, the broker maintained its 'neutral' rating.
Telecoms group BT was also a heavy faller after Barclays Capital lowered its rating to 'equal weight' and cut its target for the shares from 260p to 230p.
FTSE 250: SDL sinks on tech slowdown
Information management firm SDL fell after saying that first-half trends had continued into the third quarter: services sales are strong but technology revenues continue to be 'suppressed'.
Investec downgraded the stock from 'buy' to 'hold' today, saying: "We continue to see SDL as an appealing investment proposition due to its position of strength in multiple growth markets. However to justify a premium rating we believe the company will need to deliver on its growth potential within the technology business as well as the services business."
Nickel and zinc miner Talvivaara was unwanted after saying that heavy rainfall in the third quarter is proving a major obstacle in its aim of mining 17,000 tonnes of nickel this year.
Foam products supplier Filtrona was in demand after firing on all cylinders in the third quarter with like-for-like sales up by one-tenth year-on-year.
Rentokil Initial gained after the Sunday Telegraph said that the firm is working to spin-off its loss-making City Link business by the end of the year.
House builder Bovis Homes was in demand after JPMorgan Cazenove upgraded the stock to 'overweight' and lifted its target from 485p to 560p.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | Chinese Consumer Price Index grew 1.9 percent year-over-year in September after recording a 2 percent growth in August, the National Bureau of Statistics announced.
The S&P/TSX Composite Index lost 40.07 points or 0.33 percent to 12,161.97, after shedding about 0.25 percent in the previous session.
The price of gold slipped back to a monthly low Monday morning as traders await more clarity on Spain's bailout plan. Furthermore, better-than-expected U.S. consumer sentiment and retail sales data weighed on bullion prices. Gold for December lost $24.80 to $1,734.90 an ounce.
Among gold plays, Detour Gold (DGC.TO) lost nearly 4 percent. Royal Gold (RGL.TO), Goldcorp. (G.TO) and Barrick Gold (ABX.TO) were down around 2 percent each.
Argonaut Gold Inc. (AR.TO) lost 7 percent after it said it would acquire Prodigy Gold Inc. (PDG.V) in exchange of 0.1042 of an Argonaut Gold share and C$0.00001 in cash per Prodigy share. The transaction values Prodigy's equity at around C$341 million on a fully diluted in-the-money basis and implies an enterprise value of some C$277 million. Meanwhile, shares of Prodigy surged over 40 percent to C$0.990.
The price of crude oil was moving lower Monday morning after China reported a slower economic growth. Crude for November lost $1.77 to $90.09 a barrel.
In the oil patch, Niko Resources (NKO.TO) dived over 6 percent and Canadian Natural Resources (CNQ.TO) lost close to 2 percent.
Meanwhile, bank stocks were trading higher, with Laurentian Bank (LB.TO), CIBC (CM.TO) and National Bank (NA.TO) adding around 0.50 percent each.
Health services provider OPMEDIC Group Inc. (OMG.TO) gained over 11 percent.
Simulation tools and equipment maker CAE Inc. (CAE.TO) edged up 0.60 percent after announcing that it has won a series of military contracts valued at approximately C$200 million, the majority of which involves long-term, recurring training services.
Hydro Electric power company Innergex Renewable Energy (INE.TO) inched up 0.20 percent after announcing that it has completed the acquisition of the Brown Lake and Miller Creek run-of-river hydroelectric facilities located in British Columbia, Canada.
In economic news from south of the border, the U.S. Commerce Department said retail sales increased by 1.1 percent in September following a revised 1.2 percent increase in August. Economists had expected sales to rise by about 0.7 percent compared to the 0.9 percent growth originally reported for the previous month.
From the euro zone, Switzerland's producer and import price rose 0.3 percent year-on-year in September, reversing a 0.1 percent fall last month, the Federal Statistical Office said. On a monthly basis, the producer and import price index gained 0.3 percent, mainly attributable to the rise in the price of oil and petroleum products. The September increase follows a 0.5 percent growth in August. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Rise, Banks Gain
The European markets are moderate to notably higher on Monday, as inflation dropped in China, giving hopes of further policy easing measures. Optimism that Spain is getting closer to seeking a bailout also boosted sentiment. The Asian markets were mixed and the U.S. index futures point to a higher open.
Inflation in China slowed to 1.9 percent in September from 2 percent in August, led by a notable fall in food inflation, the latest figures from the National Bureau of Statistics revealed. This gives ample room for policymakers to ease policy if the economy shows further weakness, reflecting tepid domestic as well as external demand.
A report from Ernst & Young Item Club showed that the British economy is likely to contract this year amid "deeply disappointing" trade figures, while consumer demand will bounce back stronger than expected.
According to the Item Club's autumn forecast, the gross domestic product is expected to fall 0.2 percent this year, before increasing to 1.2 percent in 2013 and 2.4 percent in 2014.
Greek Prime Minister Antonis Samaras has said that his government expects to successfully conclude talks with the country's international creditors in time for the EU summit.
In an interview to Greek newspaper Kathimerini on Sunday, he admitted that there are differences between the creditors on how to cut the debt mountain. However, Samaras said he is confident that the troika will resolve the disagreements in time for the summit that starts October 18.
Meanwhile, German Finance Minister Wolfgang Schaeuble told Thailand's The Nation newspaper that the central banks that inject money into the system should ensure a timely exit from providing generous liquidity. It is important to ensure price stability in the euro area, Schaeuble added.
The euro Stoxx 50 index of eurozone bluechip stocks is gaining 1.03 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is rising 0.67 percent.
The German DAX is gaining 0.78 percent and the French CAC 40 is rising 1.33 percent. The UK's FTSE 100 is advancing 0.53 percent and Switzerland's SMI is climbing 0.65 percent.
In Frankfurt, Deutsche Bank and Commerzbank are adding 1.9 percent and 1.6 percent, respectively.
Fresenius is up 1.3 percent and Bayer is adding 1.2 percent.
Barclays initiated Tag Immobilien with an "Overweight'' rating. The stock is up 1.4 percent.
K+S is losing 2.4 percent. Deutsche Boerse and Deutsche Post are in negative territory.
In Paris, Credit Agricole is climbing 3 percent. BNP Paribas is adding around 2 percent and Societe Generale is gaining 1.9 percent.
Media firm Vivendi is jumping 2.9 percent and speed-train maker Alstom is rising 2.2 percent.
Bucking the trend, Alcatel-Lucent is losing 3.1 percent.
In London, Asset management firm Hargreaves Lansdown is gaining 2.5 percent. British Land is rising 1.8 percent and Land Securities is up 1.5 percent.
Standard Chartered is advancing 1.9 percent. Barclays and Lloyds Banking are gaining 1.2 percent each, while Royal Bank of Scotland is losing 1.1 percent.
BT Group, which suffered a broker downgrade, is up 0.2 percent.
Filtrona is gaining over 4 percent. The supplier of specialty plastic, fibre and foam products reported a 26 percent rise in third-quarter revenues at constant exchange rates, with a 10 percent growth in like-for-like sales.
Miners are trading weak. Kazakhmys is falling 2.5 percent, Anglo American is losing 1.5 percent and Eurasian Natural Resources is dropping 1.2 percent.
SDL is losing over 13 percent. The information management firm expects potential exposure of up to $3 million in Trados litigation.
Kuehne & Nagel is up 1 percent in Zurich after posting a 12 percent increase in third-quarter revenues.
Credit Suisse is gaining 1.6 percent in Zurich. Exane BNP raised its rating on the stock.
Across Asia/Pacific, Australia's All Ordinaries slid 0.10 percent and China's Shanghai Composite Index fell 0.30 percent. However, Hong Kong's Hang Seng edged up around 0.1 percent and Japan's Nikkei 225 gained 0.5 percent.
In the U.S., futures point to a higher open on Wall Street. In the previous session, stocks moved mostly lower and the major averages ended the session mixed. The Dow edged up less than a tenth of a percent, while the Nasdaq slipped 0.2 percent and the S&P 500 dipped 0.3 percent.
In the commodity space, Crude for November delivery is falling $0.15 to $91.71 per barrel and December gold is losing $10.9 to $1748.8 a troy ounce. |
| Asia Market | Asian Markets Trade Weak
Asian stock markets are trading weak on Monday with investors mostly treading cautiously following a flat close on Wall Street last Friday. A lack of fresh triggers, worries about the near term outlook for the global economy and caution ahead of quarterly earnings are also contributing to the sluggish trend in most of the markets in the region.
The Australian stock market is subdued with investors mostly treading cautiously and indulging in stock-specific activity.
Consumer staples, financial, healthcare and telecommunications stocks are finding modest support, while energy and mining stocks are a bit weak.
The benchmark S&P/ASX 200 index, which advanced to 4,492.7 after opening flat, is currently trading at 4,481, down 5.6 points from its previous close. The broader All Ordinaries index is down 6.3 points at 4,503.8, off the day's high of 4,515.
Among bank stocks, ANZ Bank , National Australia Bank and Westpac are up 0.5 to 0.8 percent, while Commonwealth Bank of Australia is up marginally. Bendigo & Adelaide Bank and Bank of Queensland are up with modest gains.
Miners BHP Billiton (BHP, BBL) and Rio Tinto (RIO, RIO.L) are down 0.4 percent and 1.2 percent, respectively.
In the energy sector, Woodside Petroleum and Santos are up marginally, while Caltex Australia, Oil Search and Origin Energy are trading weak.
Origin Energy announced that production has resumed at the Yolla gas project in the Bass Strait. The gas field, which has been upgraded from an unmanned offshore platform to a manned platform, returned to free-flow production mode after installation of an accommodation module, Origin Energy said in a statement.
Lynas Corporation is trading lower by 4.6 percent. Whitehaven Coal, Fortescue Metals and Perseus Mining are down 3 to 3.6 percent.
Arrium, Newcrest Mining, Regis Resources, Sims Metal Management, Challenger, PanAust, Seven West Media and Paladin Energy are also trading notably lower.
Meanwhile, ALS, Bluescope Steel, Downer EDI and Leighton Holdings are up 2 to 2.8 percent. Incitec Pivot, James Hardie Industries, Boral and Oz Minerals are also up with strong gains.
On the economic front, the number of new home loans in Australia was up 1.8 percent on month in August, at 45,821, the Australian Bureau of Statistics said on Monday. That beat forecasts for an increase of 1.5 percent following the upwardly revised gain of 0.7 percent in July.
Investment lending was down 0.8 percent on month to A$6.65 billion after falling an upwardly revised 1.6 percent in the previous month. Owner-occupied home loan values were up 1.3 percent on month after shedding 0.9 percent a month earlier.
According to another report from the same bureau, the total number of new motor vehicle sales in Australia was up a seasonally adjusted 4.7 percent on month in September, standing at 98,701. That follows the 3.6 percent increase in August.
On a yearly basis, new motor vehicle sales spiked 14.4 percent after climbing 6.4 percent in the previous month.
In the currency market, the Australian dollar opened lower and was quoting at US$1.0254 in early trades, down from Friday's close of US$1.0277.
The Japanese stock market opened lower with investors taking some profits amid slight fears about a likely drop in corporate earnings. A flat lead from Wall Street too contributed to the market's weak start.
However, with a few blue chip stocks attracting buyers at lower levels, the market regained most of the lost ground subsequently and was down just marginally below the unchanged line at the end of the morning session.
Real estate, non-ferrous metals, marine transport and financial stocks traded weak, while electric power, rubber, mining and oil stocks surged higher.
The benchmark Nikkei 225 index, which declined to around 8,488 in early trades, was down 1.6 points at 8,535.7 when the morning session ended.
Chiyoda Corp. shares moved up nearly 7 percent. Komatsu rose more than 3.5 percent and Bridgeston Corp. gained about 2.8 percent.
Hitachi Construction, Kansai Electric Power, Yaskawa Electric Power, Resona Holdings, Advantest Corp. , Yokohama Rubber and Honda Motor (HM) moved up by over 2 percent.
Seven & I Holdings Co. said it has bought U.S. gasoline stand business and 67 convenience stores in Ohio and Pennsylvania from EZ Energy. The company also said it has acquired 58 convenience stores from Handee Marts Inc. The deals are likely to have an impact on the company's results for the year ending February 2013. The stock posted a modest gain in morning trades.
Softbank Corp. shares drifted down more than 5 percent amid speculation the company is set to sign an agreement to by a 70 percent stake in Sprint Nextel Corp. for around $20 billion.
Nisshin Steel Holdings lost 4.6 percent. Tosoh Corp., UNY Co., KDDI Corp., Dentsu Inc., NTN Corp., Olympus Corp., Daiwa Securities Group and Tokuyuma Corp. declined by 2 to 2.6 percent.
In the currency market, the U.S. dollar traded in the lower 78 yen level in early deals in Tokyo. The yen is currently trading at 78.50 to the dollar.
Among other markets in the Asia-Pacific region, Shanghai, South Korea and Taiwan are trading notably lower. Hong Kong, Indonesia, Malaysia and Singapore are down marginally, while New Zealand is bucking the trend and trading modestly higher.
On Wall Street, stocks turned in a lackluster performance on Friday, as traders seemed reluctant to make any significant moves. Weakness among banking stocks weighed on the markets despite an upbeat report on consumer sentiment. A couple of weak earnings reports to contributed to the market's flat close.
The major averages ended the session mixed. The Dow edged up 2.5 points or less than a tenth of a percent to 13,328.9, while the Nasdaq ended down 5.3 points or 0.2 percent at 3,044.1 and the S&P 500 dipped 4.2 points or 0.3 percent to 1,428.6.
Major European markets moved to the downside on Friday. The U.K.'s FTSE 100 index lost 0.6 percent, while the French CAC 40 Index and the German DAX index both slid by 0.7 percent.
U.S. Crude oil ended lower on Friday, on demand growth concerns after the International Energy Agency in its monthly report slashed oil demand estimates for 2012 and 2013. A report showing a bigger-than-expected surge in inventories too contributed to oil's decline.
Crude for November delivery shed $0.21 or 0.2 percent to close at $91.86 a barrel on the New York Mercantile Exchange. |
| Forex Market | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Business inventories in the U.S. rose by slightly more than expected in the month of August, according to a report released by the Commerce Department on Monday, with the report also showing an increase in business sales for the month.
The report said business inventories increased by 0.6 percent in August following a 0.8 percent increase in July. Economists had expected inventories to increase by about 0.5 percent.
Inventories at merchant wholesalers increased 0.5 percent, while inventories in both the manufacturing and retail industries rose by 0.6 percent.
The Commerce Department also said business sales rose by 0.5 percent in August after rising by 0.9 percent in the previous month.
Retail sales increased by 1.3 percent and sales by wholesalers rose by 0.9 percent. On the other hand, sales in the manufacturing sector slipped by 0.3 percent.
Compared to the same month a year ago, business inventories rose by 5.3 percent in August, while business sales were up by 3.1 percent.
While the Federal Reserve Bank of New York released a report on Monday showing a continued contraction in New York manufacturing activity in the month of October, the pace of contraction slowed compared to the previous month.
The New York Fed said its general business conditions index climbed to a negative 6.2 in October from a negative 10.4 in September, with a negative reading indicating a contraction in regional manufacturing activity. Economists had expected the index to climb to a negative 3.0.
The new orders index also regained some ground but remained in negative territory, climbing to a negative 9.0 in October from a negative 14.0 in September.
On the other hand, the shipments index fell to a negative 6.4 in October from a positive 2.8 in September, turning negative for the first time in more than a year.
The number of employees index also slid into negative territory, falling to a negative 1.1 in October from a positive 4.3 in the previous month.
With regard to inflation, the prices paid index dipped to 17.2 in October from 19.2 in September, while the prices received index slipped to 4.3 from 5.3.
The New York Fed also said the indexes for the six-month outlook suggest that conditions are expected to improve, although the level of optimism remains relatively low.
The report showed that the future general business conditions index fell to 19.4 in October from 27.2 in September.
Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, ISM rose back above 50 in September but today's NY reading, if followed by other regionals, imply it may not stay or at best be barely above."
Thursday morning, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity. The Philly Fed Index is expected to climb to a positive 0.5 in October from a negative 1.9 in September. |
|
No comments:
Post a Comment