London close: Late rally not enough as stocks finish lower
Market Movers
techMARK 2,079.39 -0.23%
FTSE 100 5,769.68 -0.11%
FTSE 250 11,842.42 -0.45% After steep falls for most of the session, UK stocks picked up in afternoon trade to finish only slightly lower by the close after a reading of US consumer sentiment smashed expectations.
The FTSE 100 finished at 5,770 this evening, well off its intraday low of 5,717.
The University of Michigan consumer confidence index from 82.6 to 91.3 points in November, marking the highest level since July of 2007 when the S&P 500 hit its all-time high. Analysts's were looking for a slight rise to just 83 points.
Nevertheless, it was a "rocky day" for European financial markets, as market strategist Ishaq Siddiqi from ETX Capital explained: "Kicking off positively on encouraging China economic data points only to see pessimism take over once again as EU lawmakers playing a game of brinkmanship with Greece’s financial future. This unnerved markets considerably as the likelihood that we will see a signoff for the next bailout tranche at Monday’s Eurogroup meeting seem to be waning."
Markets seemed to shrug off some decent economic data from China this morning, where industrial production and retail figures came in better than forecast. Meanwhile, consumer price index (CPI) inflation was lower than expected in October, which "leaves the door wide open for further stimulus", according to market analyst Craig Erlam from Alpari.
Worries about the impending US 'fiscal cliff' and Greece's bailout have taken their toll on stock markets this week.
While Greek policy-makers voted in favour of the country's harsh austerity measures on Wednesday night, sentiment has been shaken after reports suggested yesterday that the decision on whether to release the next tranche of the country's bailout won't come next week as expected.
An EU official has said that ministers will not decide on the next €31.5bn of aid until late November as they wait for a final report from the Troika on how Greece is complying with the terms of its bailout.
In the UK, the Bank of England today announced plans to transfer to the Exchequer excess cash held in its quantitative easing (QE) facility in order to pay down debt. The Bank of England will transfer interest payments it has received as part of its asset purchases programme since 2009 to the Treasury. FTSE 100: Admiral accelerates after upgrade
Car insurance giant Admiral was the highest riser of the day today after Bank of America hiked its rating on the stock by two notches from 'underperform' to 'buy'.
Analyst William Hardcastle said: "We are shifting our focus away from the PE growth multiple (close to historical low at 10.7 times) to the 2013 estimated dividend yield of 9.1%. This is now the highest in the sector (and FTSE 100) following 18 percentage point relative underperformance since 2011 results, and can't be ignored in our view. We now see Admiral as an income rather than growth stock."
Tate & Lyle shares were recovering after reporting a decline in first-half profits on Thursday. Jefferies and UBS raised their target prices on the stock today.
IAG was flying higher after revealing details of a "transformation plan" to get its loss-making Spanish airline Iberia back on track, which includes laying off 4,500 employees. To accompany its third-quarter results, which showed a sharp decline in its bottom line, the company said that a restructuring is needed to "save" Iberia and return it to profitability.
Engine and power systems giant Rolls-Royce edged higher after maintaining its outlook for the full year despite lowering its assumptions for underlying growth in the Marine division.
Drinks behemoth Diageo gained after saying that it is to spend £1.285bn taking a majority stake (53.4%) in Indian spirits firm USL.
The banks were also out of favour today on concerns over the Eurozone; Barclays, RBS and Lloyds were among the worst performers. Meanwhile, HSBC was being weighed down by reports that it is under investigation over the alleged loss of data and that criminals have used accounts at its operation in the tax haven of Jersey to evade tax and launder money. | AIM/Small Cap Report | FTSE 250: Talvivaara dives on leakage issuesNickel miner Talvivaara dropped on reports about leaks at its gypsum pond in Finland, later confirmed by the company. The group issued a statement this afternoon saying that the leak, first reported on Monday, was completely stemmed this morning but a "further small leakage has occurred, and work to stem it continues".
"Talvivaara re-iterates its opinion that the re-start of the plant is an important step in the overall environmental risk management of the mine," the company said.
Inter-dealer broker Tullett Prebon tanked after reporting a big drop in revenue in the four months to October on subdued market activity.
Waste management firm Shanks made a good recovery after it revealed on Thursday that half-year profit fell 29% as markets in the UK and Netherlands are hit by recession and record lows on construction output.
Shares in recruitment firm Michael Page International were also on the up today after UBS upgraded its rating on the stock from 'neutral' to 'buy', saying that there is a more favourable risk/reward balance. With MPI still trading close to the bottom of its two-year share price range, UBS says that the risk/reward balance is now "skewed to the upside".
FTSE 100 - Risers
Admiral Group (ADM) 1,054.00p +3.43%
Croda International (CRDA) 2,271.00p +2.76%
Tate & Lyle (TATE) 747.00p +2.33%
Smith & Nephew (SN.) 656.50p +2.18%
Rolls-Royce Holdings (RR.) 877.00p +1.86%
International Consolidated Airlines Group SA (CDI) (IAG) 170.60p +1.55%
BG Group (BG.) 1,057.00p +1.25%
Fresnillo (FRES) 1,929.00p +0.99%
CRH (CRH) 1,140.00p +0.89%
Tesco (TSCO) 324.80p +0.81%
FTSE 100 - Fallers
Barclays (BARC) 230.15p -2.73%
Evraz (EVR) 236.40p -2.48%
G4S (GFS) 253.40p -2.24%
National Grid (NG.) 689.00p -1.57%
Royal Bank of Scotland Group (RBS) 270.10p -1.57%
Eurasian Natural Resources Corp. (ENRC) 290.00p -1.56%
Aviva (AV.) 325.40p -1.48%
Tullow Oil (TLW) 1,382.00p -1.36%
United Utilities Group (UU.) 650.50p -1.29%
Pennon Group (PNN) 669.50p -1.18%
FTSE 250 - Risers
Shanks Group (SKS) 87.00p +4.82%
Perform Group (PER) 420.20p +3.75%
Computacenter (CCC) 344.80p +2.93%
AZ Electronic Materials SA (DI) (AZEM) 362.10p +2.46%
Michael Page International (MPI) 366.50p +2.32%
ITE Group (ITE) 187.50p +2.18%
Dunelm Group (DNLM) 675.00p +1.96%
International Personal Finance (IPF) 364.00p +1.79%
Grainger (GRI) 115.30p +1.59%
Stobart Group Ltd. (STOB) 108.80p +1.49%
FTSE 250 - Fallers
Talvivaara Mining Company (TALV) 103.50p -14.88%
Tullett Prebon (TLPR) 240.00p -8.40%
Man Group (EMG) 81.00p -6.03%
New World Resources A Shares (NWR) 253.00p -4.56%
Centamin (DI) (CEY) 71.25p -4.30%
Atkins (WS) (ATK) 652.00p -3.76%
Bank of Georgia Holdings (BGEO) 1,085.00p -3.56%
Anite (AIE) 136.80p -3.18%
Brewin Dolphin Holdings (BRW) 175.30p -2.93%
Jupiter Fund Management (JUP) 269.30p -2.92% |
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | European Markets Closed Mixed With Weakness In Banks
The European markets ended Friday's trading session with mixed results. Shares of European banks were under pressure throughout the day. A number of Eurozone concerns continued to weigh on sentiment, as well as concerns over the fiscal cliff in the U.S. A series of positive economic releases from China was unable to provide a boost to the markets.
A report from the Bank of France stated that fourth quarter economic activity in France is expected to decrease by 0.1 percent, which means the French economy will enter recession. A meeting of European finance ministers will be held on Monday, which is no longer expected to result in a determination on when the next aid payment to Greece will be delivered.
China's inflation dropped to its weakest level in nearly three years in October amid slowing growth in food prices, leaving ample room for policymakers to continue policy easing to stimulate economic growth. Growth in China's industrial production accelerated more than expected in October and retail sales also grew more than expected in October.
Investors will be watching President Barack Obama's speech later today, for any comments regarding a potential resolution to the fiscal cliff in the U.S. This will be Obama's first public comments since winning a second term in Tuesday's election.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.18 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, finished unchanged.
The DAX of Germany dropped by 0.58 percent and the FTSE 100 of the U.K. fell by 0.11 percent. The SMI of Switzerland climbed by 0.02 percent and the CAC 40 of France rose by 0.47 percent.
In Frankfurt, Commerzbank declined by 6.27 percent and Deutsche Bank fell by 2.08 percent. EON decreased by 1.05 percent. Exane BNP downgraded the stock to "Neutral" from "Outperform."
JPMorgan reduced its rating on HeidelbergCement. The stock finished lower by 2.82 percent. Allianz lost 0.68 percent, after reporting a surge in third-quarter profit.
Rheinmetall declined by 5.43 percent, after its third quarter profit decreased. The company also lowered its forecast for the full year.
In Paris, Credit Agricole dropped by 5.85 percent after reporting a hefty loss for the third quarter. Nomura upgraded Societe Generale to "Buy" from "Reduce." The stock closed down by 1.50 percent.
Lafarge, which announced third-quarter financial results, finished higher by 1.63 percent. In London, Eurasian Natural Resources lost 1.56 percent and Anglo American fell by 0.96 percent.
Barclays dropped by 2.73 percent and Lloyds Banking Group tumbled by 0.89 percent. Royal Bank of Scotland declined by 1.57 percent and HSBC fell by 0.33 percent.
International Consolidated Airlines climbed by 1.55 percent. The airline is cutting 4,500 jobs in the Iberia unit that ''continues to cause concern'' and ''is in a fight for survival.''
Diageo rose by 0.78 percent. The company has agreed to acquire a 27.4 percent stake in Indian spirits company USL.
Luxury goods company Richemont reported higher profits for its first half and also announced that its CEO Johann Rupert would leave the company next year. The stock gained 0.31 percent in Zurich.
Germany's harmonized inflation came in at 2.1 percent in October, in line with flash estimate, final data from the Federal Statistical Office showed Friday. The annual rate also remained unchanged from September.
French industrial production contracted more than forecast in September, the latest figures from the statistical office Insee showed Friday. Total industrial production fell 2.1 percent year-on-year in September, faster than the 0.1 percent decline forecast by economists. Month-on-month, output dipped 2.7 percent while expectations were for a 1 percent fall.
U.K. trade improved in September underscoring the fact that exports played a major role in economic rebound in the third quarter. Largely due to an increase in exports, the trade in goods resulted in a smaller deficit of GBP 8.4 billion in September compared to a GBP 10 billion shortfall in August, a report published by the Office for National Statistics showed Friday. It fell below a GBP 8.9 billion deficit forecast by economists.
British construction output declined 2.6 percent quarter-on-quarter in the third quarter, the latest figures from the Office for National Statistics showed Friday. Data released along with the preliminary estimate for the third quarter gross domestic product had shown a decline of 2.5 percent in construction output. Therefore, this variation is estimated to have a negligible impact on GDP, the statistical office said. |
| US Market Report | Stocks Moving Mostly Higher Following Recent Weakness
Stocks have moved mostly higher over the course of the trading day on Friday, regaining some ground after ending the two previous sessions sharply lower. The markets have benefited from some bargain hunting following the recent weakness.
The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 43.20 points or 0.3 percent at 12,854.52, the Nasdaq is up 21.39 points or 0.7 percent at 2,916.97 and the S&P 500 is up 8.03 points or 0.6 percent at 1,385.54.
The strength that has emerged on Wall Street is partly due to the release of a report from Reuters and the University of Michigan showing a significant improvement in U.S. consumer sentiment in the month of November.
The report showed that the preliminary reading on the consumer sentiment index for November came in at 84.9 compared to the final October reading of 82.6. Economists had been expecting the index to show a much modest increase for the month, predicting a reading of 83.3.
With the much bigger than expected increase, the consumer sentiment index rose for the fourth straight month, reaching its highest level since July of 2007.
Jennifer Lee, senior economist at BMO Capital, said, "Looks like U.S. consumers were feeling the warm fuzzies so far in November (although I'm not sure about those without power in the Northeast). But in general, that's good news for consumer spending and economic growth."
Before the start of trading, the Labor Department released a separate report showing that U.S. import prices rose by more than expected in the month of October amid a continued increase in fuel prices.
The Commerce Department also released a report showing a bigger than expected increase in wholesale inventories in September as well as notable jump in wholesale sales.
Despite the upward move by the broader markets, shares of Disney (DIS) are seeing continued weakness after the entertainment giant reported fourth quarter earnings that met analyst estimates but on weaker than expected revenues.
Groupon (GRPN) and J.C. Penney (JCP) are also showing notable moves to the downside after reporting third quarter revenues that came in below analyst estimates.
Sector News
Biotechnology stocks are seeing significant strength in mid-day trading, with the NYSE Arca Biotechnology Index up by 2.3 percent. With the gain, the index has nearly offset the losses posted in the two previous sessions.
Sequenom (SQNM) has helped to lead the biotech sector higher, surging up by 20.5 percent after reporting its third quarter results.
Considerable strength has also emerged among steel stocks, as reflected by the 1.8 percent gain being posted by the NYSE Arca Steel Index. The index is regaining some ground after ending Thursday's trading at a one-month closing low.
Defense, networking, and banking stocks have also shown strong moves to the upside on the day, while moderate weakness remains visible among housing and gold stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both ended the day down by 0.9 percent, while Australia's All Ordinaries Index dipped by 0.4 percent.
Meanwhile, the major European markets turned mixed over the course of the trading day. While the French CAC 40 Index ended the day up by 0.5 percent, the German DAX Index fell by 0.6 percent and the U.K.'s FTSE 100 Index edged down by 0.1 percent.
In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note is unchanged at 1.632 percent. |
| Broker tips | Rolls-Royce, Randgold, Michael Page Investec has retained its 'buy' rating and 930p target for power systems group Rolls-Royce after the company's in-line third-quarter statement on Friday.
The broker labelled today's trading update as "typically brief" but confirming full-year guidance for good growth in underlying revenues and profit, as well as break-even cash. "So another 'tick-in-the-box update' that is unlikely to materially move the shares," Investec said.
Nomura has cut its target for gold miner Randgold Resources from 7,400p to 7,075p and retained its 'reduce' rating on the stock, saying the business needs to execute to maintain its premium rating.
The broker now says that fourth-quarter figures are under pressure, following the poorly-received third-quarter results. Nomura is forecasting full-year production of 819,000 ounces of gold, below Randgold's own guidance of 825,000 ounces, saying that while its possible that the miner will meet targets, "it will be a challenge".
UBS has upgraded its recommendation for recruitment firm Michael Page (MPI) from 'neutral' to 'buy', saying that there is a more favourable risk/reward balance.
In a separate staffing sector research note published today, UBS says highlighted many "structural challenges" that face the industry (such as fragmentation, alternative models and regulation) but also "opportunities" (like professional staffing).
The broker said: "MPI is not immune to these pressures, but we continue to see it as relatively well-positioned within its peer group." |
|
No comments:
Post a Comment