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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Markets extend losses after poor US data Moderate losses in early trading on Friday turned into a steep sell-off by the close as markets ended August in a cautious mood following a choppy week.
A series of closely-watched economic indicators from the States prompted a negative reaction this afternoon, causing a weak start on Wall Street as investors trimmed positions ahead of a long three-day weekend - US markets will be closed on Monday for Labour Day.
Second-quarter US economic growth forecasts were revised higher yesterday, building the case for the Federal Reserve to scale back quantitative easing at its next meeting in September. Today's data however will complicate matters somewhat - US consumer confidence declined in August, while consumer spending and consumer incomes rose less than forecast in July.
"With a raft of important US economic announcements due next week it seems that markets are content to wait until we see the latest ISM, ADP and employment reports which are all due out in the coming days," said Senior Market Analyst Michael Hewson from CMC Markets.
Meanwhile, the outcome of the debate over whether to launch a military strike in Syria still remains a concern for markets after UK Prime Minister David Cameron lost an initial vote to intervene - oppositions decided to wait for firm evidence from UN inspectors on the alleged use of chemical weapons by the Bashar al-Assad regime.
In contrast, French President Francois Hollande signalled that he could be the main ally to the US in taking action against the Syrian government, saying that the UK vote made no difference to France's position.
FTSE 100: G4S' recent strength continues
There were only a handful of stocks in positive territory on the FTSE 100 by the close of trade, yet security solutions group G4S was extending gains made earlier this week when it announced plans to sell assets to reduce its debt pile and issue new shares to help strengthen its balance sheet. G4S has gained by around 15% over the last month alone and has now erased all of the losses experienced earlier in the year.
JPMorgan Cazenove kept an 'overweight' rating on the shares saying that there could be upside to current forecasts on the back of the company's revenue growth potential and new business opportunities.
Outsourcing giant Serco was rebounding after a heavy fall yesterday after confirming that it is under investigation because of a "misreporting of data" in connection with it prisoner escort contract with the Ministry of Justice. Shares dropped 11% the day before after it said it would forgo any past and future profits on the £285m contract.
Telecoms giant Vodafone was continuing to rise after yesterday's impressive surge following the confirmation that it is in talks about selling its 45% stake in Verizon Wireless to US partner Verizon. The sale could generate up to $130bn for the UK group, reports have suggested.
Burberry was also higher on positive readacross from some better-than-expected interim earnings figures out from French luxury peer Hermes.
Among the worst performers was Vedanta as mining stocks tracked metals prices lower. Anglo American dropped on reports that it could close or sell off mines at Anglo Platinum Amplats if the division doesn't see improving profits next year. Meanwhile, Rio Tinto was down on concerns over delays to its Simandou iron ore project in Guinea.
Energy Stocks were also providing a drag on the Footsie today as oil prices pulled back from hitting a two-year high earlier in the week. Shell, BP and BG Group were all out of favour this afternoon. |
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| | TSE 100 - Risers
G4S (GFS) 260.00p +3.38%
Serco Group (SRP) 547.50p +1.67%
Vodafone Group (VOD) 206.25p +0.73%
Antofagasta (ANTO) 855.00p +0.71%
Burberry Group (BRBY) 1,534.00p +0.26%
Babcock International Group (BAB) 1,138.00p +0.18%
Aggreko (AGK) 1,627.00p +0.12%
FTSE 100 - Fallers
Petrofac Ltd. (PFC) 1,385.00p -2.67%
WPP (WPP) 1,195.00p -2.61%
Aviva (AV.) 386.80p -2.54%
Melrose Industries (MRO) 294.40p -2.45%
GKN (GKN) 328.00p -2.32%
Prudential (PRU) 1,078.00p -2.27%
InterContinental Hotels Group (IHG) 1,803.00p -2.17%
Vedanta Resources (VED) 1,162.00p -2.11%
International Consolidated Airlines Group SA (CDI) (IAG) 286.30p -2.09%
United Utilities Group (UU.) 678.50p -2.09%
FTSE 250 - Risers
Ocado Group (OCDO) 330.50p +5.25%
Polymetal International (POLY) 755.50p +3.42%
JPMorgan Indian Inv Trust (JII) 296.50p +2.60%
COLT Group SA (COLT) 104.50p +2.55%
Micro Focus International (MCRO) 791.50p +2.46%
Domino Printing Sciences (DNO) 668.50p +2.37%
Euromoney Institutional Investor (ERM) 1,202.00p +1.86%
Bumi (BUMI) 217.60p +1.63%
African Barrick Gold (ABG) 190.00p +1.60%
Electrocomponents (ECM) 259.40p +1.37%
FTSE 250 - Fallers
Bwin party Digital Entertainment (BPTY) 110.00p -13.59%
Evraz (EVR) 125.00p -6.72%
Kazakhmys (KAZ) 301.50p -3.49%
Essar Energy (ESSR) 127.50p -3.48%
Imagination Technologies Group (IMG) 247.00p -3.48%
Brewin Dolphin Holdings (BRW) 263.20p -3.24%
Petra Diamonds Ltd.(DI) (PDL) 120.10p -3.22%
Salamander Energy (SMDR) 128.00p -3.10%
Wetherspoon (J.D.) (JDW) 710.00p -3.07%
F&C Asset Management (FCAM) 97.00p -2.90% |
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Capital at Risk. |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks slide as Syria military strike looms FTSE 100: -1.10%
DAX: -0.95%
CAC 40: -1.10%
FTSE MIB: -1.32%
IBEX 35: -1.60%
Stoxx 600: -0.87%
European stocks ended the week lower as a slate of upbeat data failed to mitigate a slump in oil and gas shares.
BP and Royal Dutch Shell were among the biggest fallers as the price of oil dropped after the UK parliament voted against supporting US-led military action in Syria.
Brent Crude futures slipped $0.331 to $114.780 per barrel on Friday at 16:20.
The US is set to launch a strike against Syrian President Bashar al-Assad's government for an apparent chemical weapons attack on civilians last week.
The US has been trying to rally up international backers and has managed to gain the support of France.
However, any military action will be held off at least until United Nations investigators report back after leaving Syria on Saturday.
European, UK and US data floods market
The European Commission revealed that measure of business managers’ confidence in the Eurozone’s economy improved sharply in August by 2.7 points to 95.2, the fourth consecutive monthly rise.
The euro-area unemployment rate held steady in July at 12.1% in line with expectations, the European Union’s statistics office revealed. The number of jobless fell for a second month in a row last month by 15,000 to 19.23m.
In the UK, GfK’s consumer sentiment index rose to -13 in August from -16 in June when it increased by 5 points. Economists had predicted an incline to -14.
Economic growth accelerated to 0.7% in the three months through June, encouraging Britons to spend more, according to separate figures from the British Chambers of Commerce.
In the US, the Commerce Department said consumer spending climbed 0.1% in July after a revised 0.6% in the prior month, as incomes increased 0.1%. Economists had forecast a 0.3% rise in consumer purchases, which account for about 70% of the economy.
The University of Michigan’s consumer confidence index showed US optimism climbed to 82.1 from an initial reading of 80, beating forecasts for a reading of 80.5.
The MNI Chicago Business Barometer, made of production, new orders, order backlogs, employment and supplier deliveries indicators, increased to 53 in August from 52.3 in July. A reading higher than 50 signals expansion.
KPN, Danone
Royal KPN retreated after the telecommunications company’s independent foundation exercised an option to acquire preferred shares in a bid to block America Movil SAB’s offer.
Danone plunged after the French food products firm said baby-nutrition sales will fall in Asia in the third quarter.
bwin.party tumbled after the online gaming company said 2013 sales will fall up to 17% lower than last year’s results as it reported a drop in first half earnings.
Ferragamo gained after the Italian luxury-goods company reported first-half net income that beat analysts’ expectations.
Hermes advanced as the French maker of Kelly bags posted a rise in first-half operating profit that exceeded forecasts.
The euro/dollar fell 0.31% to the 1.3200 dollar mark. |
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| | US Market Report | | Stocks fall after consumer spending, confidence data Dow Jones: -0.20%
Nasdaq: -0.43%
S&P 500: -0.16%
US markets slipped into the red in morning trade on Friday after consumer spending and confidence data failed to meet forecasts, with caution setting in ahead of the long three-day weekend.
The outcome of the debate over whether to launch a military strike in Syria still remains a concern for markets after UK Prime Minister David Cameron lost an initial vote to intervene - oppositions decided to wait for firm evidence from UN inspectors on the alleged use of chemical weapons by the Bashar al-Assad regime.
Meanwhile, French President Francoise Hollande signalled that he could be the main ally to the US in taking action against the Syrian government, saying that the UK vote made no difference to France's position.
"In addition to traders abstaining from buying risk-on assets today, ahead of a decision regarding Syria, investors in the US will also be looking forward to a long-weekend owing to the Labour Day holiday on Monday," said Financial Trader Shavaz Dhalla from Spreadex.
"Although volumes will probably get thinner over the course of today, investors should still remain cautious for any signs of a sell-off. It is entirely possible that certain investors will contemplate trimming some risk from their portfolios ahead of what is likely to be a headline-driven market next week."
Economic data comes up short
Consumer spending edged just 0.1% higher in July, down from a revised 0.6% gain the month before and below the 0.3% increase expected by analysts. Personal incomes only improved by 0.1% as well last month, slowing from the 0.3% rise in June and the 0.2% forecast.
The core personal consumption expenditure price index meanwhile - the Federal Reserve's measure of inflation - rose by 0.1% in July, down from 0.2% in June and below the 0.2% increase expected.
Paul Dales, Senior US Economist at Capital Economics, said that the July data suggests that real consumption in the third quarter may struggle to match the 1.8% growth seen in the second, especially given the recent rise in oil prices.
"What’s more, the recent rise in oil prices may restrain real growth as households will pay more to buy the same amount of gasoline. At the moment, incomes aren’t rising fast enough to support faster consumption growth," he said.
The closely-watched University of Michigan/Thomason Reuters consumer confidence index fell to a four-month low of 82.1 in August, pulling back from a six-year high of 85.1 the month before. Nevertheless this was still higher than the preliminary August figure of 80 and ahead of the 80.5 consensus forecast.
The Chicago purchasing mangers’ index (PMI) rose from 52.3 to 53.0 in August, as expected.
Krispy Kreme fails to meet forecasts
Krispy Kreme Doughnuts tumbled after its second-quarter adjusted earnings came in at 14 cents a share, missing the 16 cents estimate by analysts. Revenue grew by 10% to $112.7m but also missed forecasts.
Salesforce.com Inc. surged after the company issued third-quarter sales and earnings forecasts that beat analysts’ estimates.
Exxon Mobil Corp. tumbled as the price of oil declined after a delay of a possible imminent strike in Syria was delayed. |
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| | Broker Tips | | Antofagasta: Morgan Stanley cuts target from 830p to 810p and maintains an underweight rating. ARM Holdings: Deutsche Bank raises target from 470p to 1080p upgrading to buy.
Aviva: Barcalys increases target from 294.50p to 320p, while its underweight rating remains unaltered.
Bwin.Party: Investec places its target prev.: 180p under review, while its buy recommendation is kept.
Cape: Investec reduces target from 375p to 360p staying with its buy recommendation. JP Morgan lowers target from 323p to 320p and keeps an overweight rating.
Chime Communications: Investec ups target from 300p to 335p and retains a buy recommendation.
Computacenter: Investec raises target from 550p to 575p reiterating its buy recommendation. Panmure Gordon increases target from 473p to 504p and leaves its hold recommendation unchanged.
Darty: Aplhavalue shifts target from 74.90p to 74.60p downgrading from reduce to sell.
DP World: HSBC takes target from 975p to 1028p maintaining a neutral rating.
GoldStone Resources: WH Ireland lowers target from 9.70p to 5p and moves from buy to a speculative buy recommendation.
G4S: Cantor Fitzgerald moves target from 220p to 240p and reiterates a hold recommendation.
Hansteen: Jefferies shifts target from 88p to 90p keeping its hold recommendation.
Hays: Numis ups target from 100p to 140p and upgrades to buy.
Imperial Tabacco: UBS reduces target from 2660p to 2500p, while its buy recommendation remains unaltered.
KWS: Numis initiates with a target of 175p and an add rating. Lamprell: JP Morgan moves target from 166p to 172p and leaves its neutral rating unchanged.
Marshalls: Numis ups target from 140p to 175p keeping an add rating. Panmure Gordon revises target from 125p to 145p and retains a hold recommendation.
Melrose: RBC Capital moves target from 300p to 325p and maintains an outperform rating.
Minera IRL: Fox Davies lowers target from 48p to 36p, while staying with its buy recommendation.
Pheonix Group Holdings: Morgan Stanley raises target from 564p to 790p, while leaving its equal-weight rating unchanged.
Polymetal International: Citi reduces target from 698p to 612p and downgrades from neutral to sell.
Publishing Technology: Westhouse Securities increases target from 360p to 475p and reiterates a buy recommendation.
Restaurant Group: Panmure Gordon ups target from 560p to 600p and keeps its buy recommendation.
Signet Jewelers: Deutsche Bank cuts target from 4850p to 4700p retaining a hold recommendation.
Sweett Group: Westhouse Securities moves target from 50p to 58p and stays with its buy recommendation.
WPP Group: Morgan Stanley takes target from 1135p to 1235p reiterating an equal-weight rating. Investec increases target from 1250p to 1325p and keeps its buy recommendation. | | |
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