London open: HSBC and miners provide a drag early on
Market Movers
- techMARK 2,089.95 -0.69%
- FTSE 100 5,830.18 -0.65%
- FTSE 250 11,998.04 -1.01%
UK stocks declined sharply on Monday morning on the back of a mixed reaction to economic data from China and caution ahead of the presidential elections in the US and a parliamentary vote in Greece.
The HSBC China services sector purchasing managers' index (PMI) fell from a four-month high of 54.3 to 53.5 in October, contrasting with the official services PMI from the National Bureau of Statistics this weekend, which rose from 53.7 to 55.5.
Despite the slight fall in the HSBC index, the HSBC composite PMI (which measures both manufacturing and services) rose from 50.3 to 50.5, leading some pundits to say that the urgency for further economic stimulus is diminishing.
"European headline shares opened tentatively this morning as volumes remained thin ahead of America's presidential elections," said financial trader Shavaz Dhalla from Spreadex.
"Although it is difficult to anticipate how risk-on assets will respond to potential news that either the Republican or Democratic parties are winning the most support, it could be argued that US equities may show a bias for a Republican victory given Mitt Romney's proposition of tax cuts."
Markets will also be keeping an eye on Greece today ahead of critical parliamentary votes on austerity. Greek Prime Minister Antonis Samaras said: "We have to save the country from catastrophe…Leaving the euro would be a nightmare and we intend to avert it."
The smallest party in the coalition government Democratic Left has already pledged to vote against the €13.5bn in cuts due to opposition to labour reforms. Even some members of the leading New Democracy party have announced plans to vote against the package.
Markus Huber, head of German HNW Trading at ETX Capital, said: "with not all of the coalition partners potentially in full agreement with these budget cuts, it needs to be seen if these important austerity measures will indeed pass a parliament vote." FTSE 100: Miners weigh in London
Mining stocks were providing a drag on the Footsie early on as investors digested the economic figures from China. Vedanta, Rio Tinto, Kazakhmys, ENRC, Fresnillo and Antofagasta were all registering losses in the opening hour.
Banking giant HSBC was under the weather after reported pre-tax profit fell from $3.7bn to $3.5bn in the third quarter. As well as further provisions for PPI redress, third-quarter results included an additional provision of $800m in relation to the ongoing anti-money laundering investigation in the US.
Leading the upside was engineering group Weir after saying that it is set to deliver double-digit profit growth this year despite weak order inputs and a slowdown in growth in the third quarter.
Insurance goliath Prudential fell after entering into a long-term exclusive bancassurance partnership in Thailand with Thai firm Thanachart Bank.
FTSE 250: Centamin surges after court judgment
Gold miner Centamin rocketed this morning after the Egyptian administrative court decided that its flagship Sukari mining licence is valid, reassured investors who took profits last week on rumours that the company could lose its primary source of revenue.
Data centre operator Telecity dropped despite saying that full-year earnings will be in line with market forecasts. Consensus estimates for the full year ending December 31st are for pre-tax profits of £81.66m on revenues of £284.35m.
Specialist insurance group Hiscox fell after saying it is too early to produce any meaningful estimate of claims from Sandy as it posted 6.4% increase in gross written premiums for the nine months to September 30th.
| UK Event Calendar | | Monday November 05
INTERIMS
Active Risk Group, E2V Technologies
INTERIM DIVIDEND PAYMENT DATE
Fiberweb, JZ Capital Partners Ltd, M. P. Evans Group, Mears Group, Morrison (Wm) Supermarkets, Nationwide Accident Repair Services, Northbridge Industrial Services, UK Select Trust Ltd.
QUARTERLY PAYMENT DATE
Dcg Iris Ltd Red Sterling
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
ISM Non-Manufacturing (US) (15:00)
ISM Services (US) (15:00)
Q3
Inmarsat, PostNL NV
FINALS
Egdon Resources
IMSS
Hiscox Ltd., HSBC Holdings, Inmarsat, Telecity Group
AGMS
Merchant House Group, TR European Growth Trust
UK ECONOMIC ANNOUNCEMENTS
Official Reserves (09:30)
FINAL DIVIDEND PAYMENT DATE
CPL Resources, Stavert Zigomala |
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Asian markets are broadly lower, tracking sharp losses on Wall Street and a commodity sell-off on Friday as the upbeat jobs report before the election lowered expectations of economic stimulus provided by global central banks.
The dollar is holding firm on safe-haven buying after opinion polls indicated a tough fight between incumbent U.S. President Barack Obama and Republican rival Mitt Romney. The Republican candidate already pledged to replace Fed Chairman Ben Bernanke, when his term in office expires in January 2014.
Regardless of the outcome of the election, Congress and the White House have to act swiftly to avert the so-called "fiscal cliff" that looms at year's end.
Closer home, small and medium-sized manufacturers in the U.K. reported further declines in output and export orders in the three months to October, according to a survey by the Confederation of British Industry. Nonetheless, manufacturers expect output to grow slightly and new orders to level off over the coming quarter.
In corporate news, bailed out lender Lloyds Banking Group Plc plans to offload its 60 percent stake in St James's Place Wealth Management in a deal that could fetch as much as 1 billion pounds or $1.6 billion, reports suggest.
Swiss-based Transocean reported that its third-quarter net loss attributable to controlling interest widened to $381 million or $1.06 per share from $32 million or $0.10 per share in the year-ago period.
European stocks ended Friday's session in the green after U.S. nonfarm-payrolls numbers showed employers stepped up hiring in October. The Euro Stoxx 50 index of Eurozone bluechip stocks rose half a percent and the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.3 percent. Around Europe, the U.K.'s FTSE 100 edged up 0.1 percent, while key benchmark indexes in Germany, France and Switzerland rose between 0.4 percent and 0.6 percent.
U.S. stocks fell sharply on Friday, offsetting the previous session's strong gains, as optimism over upbeat jobs report gave way to nervousness ahead of Tuesday's presidential election. The Dow slid 1.1 percent, tech-heavy Nasdaq fell 1.3 percent and the S&P 500 declined 0.9 percent. |
| US Market Report | US close: Markets shrug off jobs data to finish lower
Market Movers
Dow Jones: 13,093 (-1.06%)
Nadsaq: 2,982 (-1.26%)
S&P 500: 1,414 (-0.95%) Wall Street benchmark closed with losses of around one per cent on Friday as a better-than-expected jobs report failed to give stocks a boost.
US non-farm payrolls rose by 171,000 last month, well above the 125,000 expected by the market consensus. The unemployment rate did increase, by 10 basis points to 7.9%, but this was expected.
What's more, upwards revisions were made to previous month's figures which added "more lustre to an already-solid report", said analyst Michael Gapen from Barclays Research.
Gapen said that the labour market is exhibiting good momentum heading into Q4, "although we would not be surprised to see some volatility in upcoming jobless claims and payrolls as a result of Hurricane Sandy. We do not see the momentum in hiring and decline in the unemployment rate in recent months as changing the calculus for the Fed at this stage."
All eyes are now on the presidential elections on Tuesday with current President Barack Obama and Republican challenger Mitt Romney still close in preliminary polls.
Apple finished firmly in the red despite the launch of its news gadget, the iPad mini. Shares, finishing at around $577, are now well off their peak of $705 hit in mid-September after the release of the iPhone 5.
Coffee shop chain Starbucks saw like-for-like sales growth of 6% in the third quarter. Shares frothed higher despite revenue of $3.36bn being short of the $3.39bn analysts had been expecting. The stock was also given a lift by Credit Suisse who upgraded the shares from 'buy' to 'overweight'.
Resources titan Chevron dropped after reporting a worse-than-expected decline in third-quarter earnings and a 3% fall in oil and gas production.
Travel website TripAdvisor surged today after topping analysts' forecasts in the third quarter with a 9.3% rise in earnings.
Sector peer Priceline.com was also making gains after third-quarter earnings and revenues beat consensus estimates by 3.5% and 4.5%, respectively.
S&P 500 - Risers
TripAdvisor Inc. (TRIP) $35.12 +19.42%
Starbucks Corp. (SBUX) $50.84 +9.05%
Priceline.Com Inc. (PCLN) $634.74 +8.30%
Washington Post Co. (WPO) $356.50 +5.02%
Whole Foods Market Inc. (WFM) $97.15 +2.85%
Beam Inc. Common Stock (BEAM) $57.15 +2.82%
Alpha Natural Res (ANR) $9.06 +2.26%
Simon Property Group Inc. (SPG) $155.75 +2.10%
Varian Medical Systems Inc. (VAR) $70.15 +2.01%
Mead Johnson Nutrition Co. (MJN) $64.97 +1.96%
S&P 500 - Fallers
Pitney Bowes Inc. (PBI) $12.73 -13.05%
Fluor Corp. (FLR) $52.01 -9.80%
First Solar Inc. (FSLR) $22.54 -8.92%
Newmont Mining Corp. (NEM) $48.74 -8.42%
Chesapeake Energy Corp. (CHK) $18.49 -7.87%
American International Group Inc. (AIG) $32.68 -7.16%
Republic Services Inc. (RSG) $26.48 -6.46%
CF Industries Holdings Inc. (CF) $199.03 -5.62%
Frontier Communications Co. (FTR) $4.51 -4.25%
F5 Networks Inc. (FFIV) $82.59 -4.08%
Dow Jones I.A - Risers
Bank of America Corp. (BAC) $9.85 +1.13%
Walt Disney Co. (DIS) $49.86 +0.16%
Merck & Co. Inc. (MRK) $46.00 +0.13%
McDonald's Corp. (MCD) $86.86 +0.07%
Pfizer Inc. (PFE) $24.55 +0.00%
Dow Jones I.A - Fallers
Chevron Corp. (CVX) $108.37 -2.77%
Caterpillar Inc. (CAT) $85.79 -2.12%
Mondelez International Inc. (MDLZ) $26.28 -1.94%
E.I. du Pont de Nemours and Co. (DD) $44.15 -1.89%
International Business Machines Corp. (IBM) $193.43 -1.89%
Hewlett-Packard Co. (HPQ) $13.76 -1.71%
Exxon Mobil Corp. (XOM) $90.27 -1.45%
Verizon Communications Inc. (VZ) $44.52 -1.37%
United Technologies Corp. (UTX) $78.07 -1.25%
Alcoa Inc. (AA) $8.65 -1.14%
Nasdaq 100 - Risers
Starbucks Corp. (SBUX) $50.84 +9.05%
Priceline.Com Inc. (PCLN) $634.74 +8.30%
Sirius Satellite Radio Inc. (SIRI) $2.90 +3.20%
Whole Foods Market Inc. (WFM) $97.15 +2.85%
Yahoo! Inc. (YHOO) $17.11 +0.94%
Cerner Corp. (CERN) $77.73 +0.54%
Symantec Corp. (SYMC) $18.80 +0.48%
Perrigo Company (PRGO) $115.00 +0.39%
O'Reilly Automotive Inc. (ORLY) $88.35 +0.34%
Comcast Corp. (CMCSA) $37.61 +0.16%
Nasdaq 100 - Fallers
Vertex Pharmaceuticals Inc. (VRTX) $45.01 -10.84%
F5 Networks Inc. (FFIV) $82.59 -4.08%
Alexion Pharmaceuticals Inc. (ALXN) $88.88 -3.81%
VeriSign Inc. (VRSN) $39.67 -3.60%
Altera Corp. (ALTR) $30.51 -3.48%
Automatic Data Processing Inc. (ADP) $57.37 -3.35%
Apple Inc. (AAPL) $576.80 -3.31%
Life Technologies Corp. (LIFE) $48.63 -3.26%
Flextronics International Ltd. (FLEX) $5.74 -2.88% |
| FX and Commodities round-up | FX round-up: Dollar rallies across the board
The dollar rallied against major currencies on Friday as investors cheered better than expected US jobs data.
US non-farm payrolls rose by 171,000 in October, well above the 125,000 forecast by market analysts. However the unemployment rate increased by 10 basis points to 7.9%, in line with expectations.
The dollar index, which measures the US currency against a basket of six major currencies, advanced to 80.601 versus 80.054 on Thursday.
The euro tumbled to $1.2828 from $1.2943 the previous session as markets keep a close eye on an upcoming parliamentary vote in Greece for more austerity measures.
Against the yen the greenback rallied to its strongest level since April as the US currency made broad progress. It traded at ¥80.40 compared to ¥80.20 the session before.
Sterling declined to $1.6014 from $1.6128 despite some encouraging UK data. Activity in the UK´s construction sector improved in October, however volumes of new work fell again, as the economic environment weighs on business. Commodities: Crude tumbles as dollar strengthens
Crude oil futures fell almost three per cent on Friday as the US dollar pushed higher on the back of better than expected jobs data.
Crude oil for December delivery lost $2.23 to settle at $84.86 a barrel on the New York Mercantile Exchange. Over the week futures declined 1.7%, marking its third weekly consecutive decline.
The latest data showed US non-farm payrolls rose by 171,000 last month, way above the 125,000 forecast by market consensus. However the unemployment rate increased by 10 basis points to 7.9%, in line with expectations.
Oil prices were also pressured by persistent concern about buoyant US supplies and weak demand in the wake of hurricane Sandy.
Focus was also on the presidential elections on Tuesday with preliminary polls showing support for President Barack Obama and Republican challenger Mitt Romney is close.
December gasoline fell 6 cents to $2.57 a gallon.
Among precious metals gold plunged 2.4% on Friday as the strong than expected US jobs data gave the dollar a boost.
Gold for December delivery tanked $40.30 to settle at $1,675.20 an ounce on the Comex division of the New York Mercantile Exchange. |
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