London close: Stocks finish flat as Eurogroup meets
Market Movers
- techMARK 2,062.12 -0.83%
- FTSE 100 5,767.27 -0.04%
- FTSE 250 11,803.30 -0.33%
- Eyes turn to Eurogroup meeting
- Greece approves 2013 budget
- Japanese GDP decline worse than feared
Concerns about Greece and a worse-than-expected contraction in Japan meant that it was a rather subdued day on the UK stock market on Monday, with the
FTSE 100 broadly unchanged by the close.
"European markets have struggled for direction today, not surprising given the backdrop of denial and delay in dealing with the problems of Greece's financial situation, ahead of today's latest EU finance ministers meeting, where expectations are receding that there will be any clarity on what the next steps will be in this latest stage of the crisis," said market analyst Michael Hewson from CMC Markets.
Greece's parliament put the rubber stamp on its budget for 2013 late Sunday night with a wide margin as 167 deputies approved the bill, 128 voted against, four voted 'present' and one member was absent. Passage of the budget was a requirement for Athens to get the green light on the next tranche of aid. However, the Troika is not expected to be able to give the final seal of approval necessary in time for today's meeting of Eurozone finance ministers.
Any agreement on Greece will have to pass through the Bundestag, Germany's Finance Minister Wolfgang Schaeuble is reported to have said this afternoon.
Japan's economy contracted at an annualised rate of 3.5% in the third quarter, only slightly worse than the 3.4% decline expected by analysts. Nevertheless, the decline in capital expenditures was considerably larger than what was forecast. However, over the weekend investors learned that Chinese exports grew at an 11.6% month-on-month pace in October, well ahead of the 10% that had been foreseen.
In other news, the International Energy Agency (IEA) said that the US will surpass Saudi Arabia's and Russia's level of oil production by around 2020, something which was thought unthinkable by many even just a year ago. Based on current forecasts, the US will pump 11.1m barrels of oil a day (b/d) in 2020 and 10.9m b/d in 2025, the IEA said. America's oil production is currently running at 6.7m b/d. FTSE 100: Financials make gains
Car insurance giant Admiral was extending gains made Friday when Bank of America hiked its rating on the stock by two notches from 'underperform' to 'buy'.
UBS has raised its target for UK banking group Lloyds from 44p to 46p, saying that the bank's third-quarter results showed "solid progress and improving momentum", providing a lift to the shares this morning. The broker maintained its 'neutral' stance though.
Meanwhile, Royal Bank of Scotland was being boosted after Credit Suisse also raised its target from 190p to 220p. Nevertheless, the broker retained its 'underperform' rating on the stock, saying that it still expects "below-industry-average profitability".
Amec was among today's worst performers possible as a result of the negative news coverage surrounding the company's loss of its second top executive within a month.
Security giant G4S was lower after Morgan Stanley downgraded its rating on the stock to 'equal weight' and cut its target from 320p to 280p. This morning's Telegraph called attention to the fact that G4S is waiting to hear whether it will be reappointed on a contract to provide electronic tagging of offenders services across England and Wales worth £50m of annual revenue to the company.
Mining stocks were broadly lower after the worse-than-expected contraction in Japan: Anglo American, Xstrata and Glencore were all registering losses. Bucking the trend was Polymetal after extending the life-of-mine projections for its Khakanja and Omolon mines in Russia by two years after releasing the first set of ore reserves estimates for its Tsokol, Ozerny, Avlayakan, and Dalniy deposits.
Advertising agency WPP was up following encouraging news from French rival Publicis, which reported that advertising demand improved in October.
Drugs giant AstraZeneca declined despite announcing a clutch of positive test results relating to its naloxegol product, a treatment for opioid-induced constipation (OIC).
Hotels group InterContinental gained after Exane BNP Paribas upgraded its recommendation to 'outperform' and raised its target from 1,630p to 1,900p.
FTSE 250: Cobham leads the fallers on 2013 guidance
Defence technology supplier Cobham tanked after predicting a drop in revenues in 2013 as it is hit by the fall in US defence spending. The firm also said that a change in its sales mix and new investments would mean lower operating margins next year than are expected in 2012.
Platinum miner Lonmin was a high riser, with the stock continuing to show signs of recovery. In recent months the company's operations, situated in the Bushveld Complex in South Africa, have been affected by the strikes and the killing of 34 miners on August 16th at Marikana. Today, the shares were given a lift by Deutsche Bank which raised its target from 490p to 515p, keeps its 'hold' rating.
Nickel miner Talvivaara experienced a sell-off as it continues to see volatile swings after its operations in Finland were affected by an "unfortunate gypsum pond leakage" that started on November 4th. The company announced late Friday that it has launched an investigation into the leak.
Invensys shares fell after UBS downgraded to 'neutral' and cut its target from 280p to 255p.
FTSE 100 - Risers
Admiral Group (ADM) 1,092.00p +3.61%
Lloyds Banking Group (LLOY) 45.13p +3.50%
Polymetal International (POLY) 1,149.00p +3.14%
Burberry Group (BRBY) 1,247.00p +2.47%
Barclays (BARC) 234.95p +2.09%
Royal Bank of Scotland Group (RBS) 274.50p +1.63%
Vedanta Resources (VED) 1,103.00p +1.47%
InterContinental Hotels Group (IHG) 1,579.00p +1.41%
Tate & Lyle (TATE) 757.00p +1.34%
ITV (ITV) 86.80p +1.17%
FTSE 100 - Fallers
Anglo American (AAL) 1,827.50p -2.06%
G4S (GFS) 248.70p -1.85%
Amec (AMEC) 1,030.00p -1.81%
BG Group (BG.) 1,040.50p -1.56%
Xstrata (XTA) 956.00p -1.47%
Meggitt (MGGT) 366.20p -1.45%
Randgold Resources Ltd. (RRS) 6,950.00p -1.35%
IMI (IMI) 940.00p -0.95%
Glencore International (GLEN) 336.25p -0.94%
Sage Group (SGE) 304.60p -0.91%
FTSE 250 - Risers
Lonmin (LMI) 483.20p +6.13%
COLT Group SA (COLT) 102.10p +3.55%
ITE Group (ITE) 194.00p +3.47%
Sports Direct International (SPD) 396.90p +2.90%
Raven Russia Ltd (RUS) 67.50p +2.27%
Dixons Retail (DXNS) 24.80p +2.23%
Interserve (IRV) 375.10p +2.18%
Cable & Wireless Communications (CWC) 38.20p +2.06%
New World Resources A Shares (NWR) 257.80p +1.90%
Afren (AFR) 139.60p +1.75%
FTSE 250 - Fallers
Cobham (COB) 190.60p -9.67%
Talvivaara Mining Company (TALV) 95.75p -7.49%
Invensys (ISYS) 221.30p -5.71%
Perform Group (PER) 396.70p -5.59%
Chemring Group (CHG) 232.70p -4.44%
Ultra Electronics Holdings (ULE) 1,607.00p -4.06%
Bumi (BUMI) 266.30p -3.83%
Anite (AIE) 132.00p -3.51%
Imagination Technologies Group (IMG) 467.00p -3.31%
Bank of Georgia Holdings (BGEO) 1,050.00p -3.23%
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Europe midday: OECD sees weakening growth in the Eurozone
-OECD sees weakening growth in Eurozone and Asian Big 5
-OECD sees stabilisation in China and US
-Banks deposited €248.5bn overnight at ECB
FTSE-100: 0.33%
Dax-30: 0.33%
Cac-40: -0.16%
FTSE Mibtel 30: 0.32%
Ibex 35: -0.83%
Stoxx 600: 0.00%
The main European equity benchmarks have turned slightly higher. While the Greek parliament last night approved the 2013 budget by an ample majority, there are some doubts as to just when, exactly, the country will be able to access the next tranche of international financial aid. That uncertainty is weighing on markets.
However, there seem to be relatively solid indications that European authorities are looking to approve the above by the end of the month, with the country expected to be able to hold out until then. If not, then it is considered very likely that European authorities will act.
Even so, and as regards the US fiscal cliff, some market commentary out over the weekend seems a tad more downbeat than what could be seen and heard in previous days. Thus, for example, economists at Barclays Research wrote on Friday that: "The retention of the status quo within the US Congress provides the most treacherous path to navigating the fiscal cliff."
Meantime, and in Asia, Chinese macroeconomic data out over the weekend was generally stronger than expected, particularly as regards export growth.
Nevertheless, the latest Japanese GDP data seems to have taken some of the luster off of the same.
The Organisation for Economic Co-operation and Development´s (OECD) leading composite index points to weak growth prospects in many major economies, but signs of stabilization have emerged in Canada, China and the United States. Telecom Italia up sharply on speculation
Egyptian billionaire Naguib Sawiris is mulling an investment of up to €4-5bn in Telecom Italia, Il Corriere della Sera reported on Saturday.
From a sector stand-point the best performers now on the DJ Stoxx 600 are: Personal and Household goods (0.68%) and Real Estate (0.45%).
German wholesale prices drop
The Dutch trade balance improved to €3.6bn, versus the €2.1bn seen in the previous month.
German wholesale prices fell by 0.6% month-on-month in October (Previous: 1.3%). Single currency near recent lows
The euro/dollar is now up by 0.19% to 1.2720 dollars.
Front month Brent crude futures are now down by 0.055 dollars to the 109.33 dollar level on the ICE. |
| US Market Report | | While selling pressure has remained relatively subdued, stocks have moved mostly lower over the course of the trading day on Monday. Lingering concerns about the looming fiscal cliff continue to weigh on the markets following last week's sell-off. The major averages have moved roughly sideways in recent trading, stuck in negative territory. The Dow is down 21.00 points or 0.2 percent at 12,794.39, the Nasdaq is down 5.69 points or 0.2 percent at 2,899.18 and the S&P500 is down 1.61 points or 0.1 percent at 1,378.24.
Stocks moved mostly higher in early trading on the heels of the release of a report showing that the Chinese trade surplus widened to $31.99 billion in October compared to expectations for a surplus of $27.15 billion.
Chinese exports surged up by 11.6 percent year-over-year, surpassing expectations for a 10 percent increase. Imports rose by 2.4 percent, below estimates for a 3.4 percent increase.
However, a separate report showing that Japanese GDP shrank by 0.9 percent in the third quarter helped to limit the upside for the markets.
On a year-over-year basis, Japanese GDP fell 3.5 percent in the third quarter compared to expectations for a 3.4 percent drop.
The subsequent pullback by the markets came as traders expressed continued concerns about whether President Barack Obama and members of congress will be able to come to an agreement to avert the fiscal cliff looming at the end of the year.
While members of both parties have called for compromise on the issue, recent statements suggest that a continued disagreement over taxes on the wealthy could lead to continued gridlock on Capitol Hill.
Without action by Congress, the end of the year will see the expiration of the Bush-era tax cuts as well as the automatic spending cuts that were part of last summer's debt ceiling deal.
Despite the weakness that has emerged on Wall Street, shares of Jefferies (JEF) are seeing considerable strength after the investment banking firm agreed to be acquired by Leucadia National (LUK). Jefferies is currently posting an 11.9 percent gain.
Sector News
While many of the major sectors are showing only modest moves, housing stocks have shown a notable move to the downside over the course of the trading day. After rising as much as 1.3 percent in early trading, the Philadelphia Housing Sector Index is down by 1.5 percent.
Among housing stocks, shares of Beazer Homes (BZH) have moved sharply lower on the day after the homebuilder reported a wider fourth quarter net loss. D.R. Horton (DHI) has also turned lower despite reporting stronger than expected fourth quarter earnings growth.
Computer hardware stocks have also come under pressure on the day, dragging the NYSE ArcaComputer Hardware Index down by 1.6 percent. Dell (DELL) is turning in one of the sector's worst performances ahead of the release of its quarterly results later this week.
Software, gold, and utilities stocks have also moved mostly lower, while strength remains visible among biotechnology and railroad stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index fell by 0.9 percent, while Australia's All Ordinaries Index ended the day down by 0.3 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Indexedged up by 0.1 percent, the U.K.'s FTSE 100 Index closed just below the unchanged and the French CAC 40 Indexdipped by 0.4 percent.
The U.S. bond market is closed on the day due to the Veteran's Day holiday.
|
| Broker Tips | Broker tips: Lloyds, Diageo, IAG
UBS has raised its target for UK banking group Lloyds from 44p to 46p, saying that the bank's third-quarter results showed 'solid progress and improving momentum'.
However, the broker remained cautious, saying: "We remain 'neutral' on Lloyds and the other UK domestic banks as we believe that there is a low, but non-zero, risk of regulatory driven dilutive equity raising."
Nomura has raised its target for beverages giant Diageo from 2,000p to 2,100p and retained its 'buy' recommendation for the stock, following last week's deal to buy a stake in Indian spirits group United Spirits Limited (USL).
The broker said: "Announcement of this deal ahead of Diwali next week means that the celebrations can really begin, with the company gaining control whilst retaining a significant local minority interest."
Credit Suisse has raised its target for International Consolidated Airlines Group, otherwise known as IAG, but has retained its 'neutral' stance on the stock.
After factoring in a lower fuel bill next year (given recent jet fuel spot price weakness) and 2% lower labour costs, the broker has raised its underlying earnings before interest and tax (EBIT) forecast for 2013 from €241m to €372m, though this is still 25% behind the Reuters consensus estimate of €495m. As such, the target for the shares has been raised from 140p to 184p. |
|
No comments:
Post a Comment