| Mining stocks gain after Obama re-election
Market Movers
techMARK 2,115.16 +0.16%
FTSE 100 5,890.14 +0.09%
FTSE 250 12,087.19 +0.05% Mining stocks on Wednesday celebrated the news that Barack Obama has been re-elected as President of the United States, with hopes for further stimulus Stateside boosting the price of commodities.
Despite the fact that not all votes have been counted, Obama has won re-election as the leader of the world's largest economy.
After winning the state of Ohio, Obama obtained 274 electoral college votes, four more than the 270 out of 538 needed to proclaim his victory. By 08:00 London time, he had 303 electoral votes compared to Republican challenger Mitt Romney’s 206.
The news spurred a rise in dollar-denominated commodities such as gold, copper and oil this morning as the greenback eased.
Market analyst Michael Hewson from CMC Markets said: "As it slowly became apparent that the outcome of the US election was going Obama’s way the US dollar slowly started to slide back after the strength of recent days as markets slowly adjusted to the fact that there would be continuity with respect to the economic policies of the last four years." FTSE 100: Mining stocks celebrate Obama win
Mining stocks were making gains this morning on hopes that economic stimulus in the US will continue with Obama's re-election. Kazakhmys, EVRAZ, ENRC, Rio Tinto, Xstrata and BHP Billiton were all making decent gains.
Sector peer Vedanta was also higher after all the key numbers headed in the right direction in the first half. Profit before tax in the six months to the end of September rose to $1,059.4m from $916.2m the year before, on revenue that rose 14% to $7,451.9m from $6,552.6m.
However, bucking the trend was Randgold Resources after a disappointing third-quarter result. The gold miner reported the production fell back from the preceding quarter's record levels as the company suffered grid power supply problems at its Tongon mine and processed lower grades at Gounkoto.
Luxury brand Burberry gained after reporting a first-half adjusted profit before tax of £173m, up 6% year-on-year and ahead of the £167m consensus estimate. Revenue, up 8% at £883m, was already reported in the pre-close trading update last month.
Publishing group Pearson was higher on speculation that it exploring a sale of the Financial Times for over £1bn.
International services giant Serco fell after buying out its 15-year joint venture partner in Australian defence and marine services business DMS Maritime Pty Ltd for £68m.
Insurer Old Mutual was lower despite reporting a slight rise in funds under management in the third quarter. FTSE 250: Spirax Sarco surges after third-quarter update
Engineering group Spirax Sarco jumped after saying that organic sales increased 6% in the four months to the end of October, ahead of the rate of growth reported in the first half.
Online gaming software company Playtech was in demand after delivering impressive revenue growth in the third quarter while saying that this trend has continued into the fourth quarter.
Industrial conveyor belt maker Fenner was higher after reporting a stellar increase in profit and revenue for the year and lifted its dividend payment by 31%. | AIM/Small Cap Report | | FTSE 100 - Risers
Evraz (EVR) 259.60p +1.49%
Aberdeen Asset Management (ADN) 340.50p +1.25%
Pearson (PSON) 1,255.00p +1.21%
Associated British Foods (ABF) 1,380.00p +1.10%
Kazakhmys (KAZ) 724.50p +1.05%
Tate & Lyle (TATE) 744.00p +1.02%
RSA Insurance Group (RSA) 113.70p +0.89%
Vedanta Resources (VED) 1,134.00p +0.80%
Burberry Group (BRBY) 1,262.00p +0.80%
Wood Group (John) (WG.) 865.50p +0.76%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 7,010.00p -5.59%
CRH (CRH) 1,185.00p -1.58%
International Consolidated Airlines Group SA (CDI) (IAG) 173.00p -1.14%
Pennon Group (PNN) 705.50p -1.12%
Capita (CPI) 733.50p -1.01%
Aggreko (AGK) 2,173.00p -0.73%
G4S (GFS) 268.20p -0.67%
BP (BP.) 441.25p -0.66%
Admiral Group (ADM) 1,046.00p -0.66%
Intertek Group (ITRK) 2,851.00p -0.56%
FTSE 250 - Risers
Spirax-Sarco Engineering (SPX) 2,103.00p +6.16%
Fenner (FENR) 363.30p +3.80%
New World Resources A Shares (NWR) 271.70p +2.72%
Henderson Group (HGG) 115.50p +2.21%
Bank of Georgia Holdings (BGEO) 1,165.00p +2.01%
Ferrexpo (FXPO) 224.80p +1.95%
Playtech Ltd. (PTEC) 418.40p +1.80%
Bumi (BUMI) 284.70p +1.57%
Millennium & Copthorne Hotels (MLC) 479.60p +1.50%
Salamander Energy (SMDR) 196.40p +1.34%
FTSE 250 - Fallers
RPS Group (RPS) 231.00p -3.02%
FirstGroup (FGP) 199.60p -2.78%
Ashmore Group (ASHM) 360.40p -2.52%
Perform Group (PER) 400.10p -2.41%
Betfair Group (BET) 735.00p -2.13%
Talvivaara Mining Company (TALV) 125.80p -1.80%
COLT Group SA (COLT) 103.50p -1.71%
Menzies(John) (MNZS) 591.00p -1.50%
Dechra Pharmaceuticals (DPH) 607.00p -1.46%
Stobart Group Ltd. (STOB) 108.90p -1.36% |
| UK Event Calendar |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | | INTERIMS
Burberry Group, Canaccord Financial Inc., FirstGroup, Vedanta Resources
INTERIM DIVIDEND PAYMENT DATE
Bodycote, Carillion, SIG, StatPro Group
INTERIM EX-DIVIDEND DATE
Amati VCT , Andrews Sykes Group, BlackRock Smaller Companies Trust, Bunzl, Elderstreet VCT, Maven Income & Growth VCT, Pace, Scottish Mortgage Inv Trust, SThree, Stobart Group Ltd., Whitbread
QUARTERLY EX-DIVIDEND DATE
Barclays, BP, IBM Corp.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Credit (US) (20:00)
Crude Oil Inventories (US) (15:30)
Industrial Production (GER) (11:00)
MBA Mortgage Applications (US) (12:00)
PMI Construction (GER) (08:55)
Retail Sales (EU) (10:00)
Q2
Canaccord Financial Inc.
Q3
Mood Media Corp. (DI), Randgold Resources Ltd., Smurfit Kappa Group
IMSS
4Imprint Group, Aer Lingus Group, Capital & Counties Properties , G4S, Old Mutual, Playtech Ltd., RPS Group
AGMS
Hays, Public Service Properties Investments Ltd (DI), Schroder Japan Growth Fund, Sinclair Is Pharma
UK ECONOMIC ANNOUNCEMENTS
BRC Shop Price Index (00:01)
FINAL DIVIDEND PAYMENT DATE
Begbies Traynor Group, Photo-Me International
FINAL EX-DIVIDEND DATE
Ashmore Group, Asian Citrus Holding, Centaur Media, Craneware, Dechra Pharmaceuticals, Genus, Hargreaves Services, James Halstead, JPMorgan Overseas Inv Trust, Jupiter Primadona Growth Trust, London Finance & Investment Group, Manchester & London Inv Trust, Matchtech Group, Regenersis, Sherborne Investors (Guernsey) 'A' Shares, Swallowfield, Third Point Offshore Investors Ltd. EUR Shares, Third Point Offshore Investors Ltd. GBP Shares, Third Point Offshore Investors Ltd. USD Shares |
| US Market Report | | Stocks Close Mostly Higher As Voters Head To The Polls
Stocks moved mostly higher during trading on Tuesday, adding to the gains posted in the previous session. With the upward move, the markets continued to recover from the substantial weakness that was seen last Friday.
The major averages ended the day firmly in positive territory but well off their highs for the session. The Dow jumped 133.24 points or 1 percent to 13,245.68, the Nasdaq rose 12.27 points or 0.4 percent at 3,011.93 and the S&P 500 climbed 11.13 points or 0.8 percent to 1,428.39.
The strength on Wall Street came even as traders express continued uncertainty about the outcome of the presidential race between President Barack Obama and Republican challenger Mitt Romney.
Along with the outcome of the presidential race, traders are also likely to keep an eye on which party controls the House and the Senate following the elections.
Some traders may have made bets based on their expectations about the election results, although trading activity remained relatively subdued.
A win for Obama is expected to be good news for the alternative energy, telecom, and housing sectors, while a win for Romney could benefit the defense, resource, and financial sectors.
According to reports, some buying interest was generated by a post on the Cincinnati Enquirer's website showing Romney with a lead in the key swing state of Ohio.
However, the Enquirer later said the chart showed "dummy data" and pulled the link, noting that vote counting doesn't start until the polls close.
Among individual stocks, Intel (INTC) closed modestly lower on the heels of a report from Bloomberg News indicating that Apple (AAPL) is preparing to replace Intel processors in its Mac personal computers with a version of its own chip technology used in the iPhone and iPad.
Meanwhile, CVS Caremark (CVS) posted a modest gain after the drugstore operator and pharmacy benefits manager reported better than expected third quarter results. The company also raised its full-year earnings guidance.
Shares of Office Depot (ODP) moved notably higher after the office supplies retailer reported adjusted earnings that exceeded analyst estimates but on weaker than expected revenues.
Sector News
Steel stocks saw considerable strength on the day, with the NYSE Arca Steel Index advancing by 2.4 percent. Despite the gain, the index remains stuck in a recent trading range.
AK Steel (AKS) turned in one of the steel sector's best performances, climbing by 6.4 percent after announcing a price increase for carbon steel products.
Considerable strength also emerged among airline stocks, as reflected by the 2.4 percent gain posted by the NYSE Arca Airline Index. With the gain, the index ended the session at its best closing level in over eight months.
Trucking stocks also showed a strong move to the upside, driving the Dow Jones Trucking Index up by 2.2 percent. Con-way (CNW) and Arkansas Best (ABFS) posted notable gains.
Oil, computer hardware, and gold stocks also saw significant strength, while some healthcare provider stocks bucked the uptrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Australia's All Ordinaries Index inched up by 0.2 percent, Japan's Nikkei 225 Index dipped by 0.4 percent and Hong Kong's Hang Seng Index edged down by 0.3 percent.
In the bond market, treasuries came under pressure in afternoon trading following the release of the results of a three-year note auction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5.8 basis points to 1.742 percent.
Looking Ahead
Trading on Wednesday is likely to be driven by reaction to the election results, although uncertainty could prevail if the presidential race does not yet have a definitive outcome.
On the earnings front, Time Warner (TWX), Macy's (M), and Tenet Healthcare (THC) are among the companies scheduled to release their quarterly results before the start of trading on Wednesday. |
| Wednesday newspaper round-up | | Pearson, Bank of England, Tesco Pearson, the FTSE 100 media group, is planning to explore a sale of the financial daily newspaper within months, Bloomberg reported, so that the company can focus on its fast-growing education division. Dame Majorie Scardino, the chief executive of Pearson, once said famously that the FT would be sold “over my dead body”. But sources said the company had decided to start the sale process before she steps down at the end of the year. Investment bankers and analysts have been predicting the FT’s sale since Dame Marjorie announced her retirement. Her successor, John Fallon, has refused to rule out a sale, The Telegraph says. The Bank of England should hold fire on injecting more money into the economy until the impact of the Funding for Lending scheme is clear, The Times’ Shadow Monetary Policy Committee believes. Rupert Pennant-Rea, chairman of Henderson Group and a former Bank Deputy Governor, voted against increasing quantitative easing, arguing that the lending scheme introduced by the Bank in August should increase the flow of credit into the economy. He was joined by Andrew Sentance, a senior economic adviser to PwC, who said that the MPC would need to plan an exit from quantitative easing if growth continued to pick up into next year. Hedge funds are betting there will be blood on the high-street this Christmas as Britain’s retail stocks dominate a list of big short positions that has been published for the first time. The secretive financiers have bet millions of pounds that companies including WH Smith, Home Retail Group, Ocado, Sainsbury, Tesco and Dixons will fall in value, according to a list published under new rules by the Financial Services Authority (FSA). Lansdowne Partners, one of London’s best known hedge funds, has short sold 0.63% of the value of Tesco - a £163m bet that the supermarket’s shares will fall. The Mayfair-based group has a 2.51% short position in WM Morrisons, worth £159.8m. GMT Capital, an American group, has built up a 3.56% short position in Carpetright - which is worth just £16.3m but is the third biggest position of the list relative to the size of the company. Barrington Wilshire, another US fund, has a bet against Mothercare worth £8.24m or 3.18% of the company’s market value. Two hedge funds have revealed big short positions in Marks & Spencer, whose shares rose 1.18% yesterday despite revealing a 10% slide in profits, The Telegraph reports. Britain is prepared to walk away from talks with French giant EDF Energy over its planned UK nuclear plant if the burden for the consumer is too high, said John Hayes, the energy minister. EDF, majority-owned by the French state, is negotiating with the UK Government over a guaranteed price for electricity from the plant at Hinkley Point in Somerset, which would leave consumers liable for “top up” subsidies. Mr Hayes on Tuesday told a select committee hearing that the Government has a bottom line it will not abandon, after MPs asked if the Coalition is prepared to say “that’s too much for the consumer”. “Absolutely,” he said. “There’s absolutely no doubt - and as I looked into the eyes of [EDF Energy chief executive] Vincent de Rivaz yesterday, I told him that the Government will always put the national interest first," the Minister further added, according to The Telegraph. According to those in the know, representatives of a major Canadian life insurance group are in town shopping for a UK fund manager. But yesterday it was rumours of a £14bn or 250p a share cash offer from US insurance giant MetLife which got Legal & General excited. Its shares raced away on well-above average turnover of 22m to close 3.9p up at a 52-week high of 144.2p. MetLife operates in Latin America, Europe, Asia’s Pacific region and the Middle East. It is one of the largest global providers of insurance, annuities and employee benefit programmes, with 90m customers in more than 60 countries. It has assets of $730.9bn and apparently has a big war chest for acquisitions and wants bigger exposure to the UK market. Legal & General is no stranger to takeover speculation and is forever mentioned as possible fodder for Allianz or Australia’s AMP. Resolution, up 15.4p to 236.6p on a Bank of America/Merrill Lynch recommendation, has often been mentioned in the same breath, according to The Daily Mail. BHP Billiton has quietly started looking for a successor to Marius Kloppers, chief executive, in what could herald a further shake-up in the leadership of the global mining industry following a five-year period of stability. The process, led by Chairman Jac Nasser, is at a very preliminary stage and a succession at the top of the world’s biggest mining company by market capitalisation could take another 12 to 24 months, according to people familiar with the talks. BHP’s move could mark a period of significant change in miners’ executive suites, after several years in which chief executives of the largest global mining houses have clung on to their jobs despite the industry turbulence in the wake of the 2008-09 global financial crisis, The Financial Times says. Investors will be forced to buy billions of dollars of Brent oil futures and sell US crude after S&P GSCI, the most widely tracked commodity index, said it would increase the weighting of the North Sea benchmark at the expense of West Texas Intermediate. The change, effective in January, is likely to affect the price difference between Brent and WTI, one of the favourite spreads traded by specialist hedge funds and commodities trading houses. The expected increase in Brent buying was likely to force the spread between the two global benchmarks to widen further, analysts and traders said. Brent has for years traded at a $1 to $2 a barrel discount to WTI. But since mid-2010, Brent has traded consistently at a premium to WTI due to a logistical bottleneck around Cushing, the Oklahoma town that serves as the delivery point for the WTI contract. JBC Energy, an oil consultancy, said the repercussions of the reweighting on the WTI-Brent spread would be “a hotly discussed issue over the coming months”. Investors including pension funds gain commodities exposure by tracking the S&P GSCI, writes The Financial Times. |
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