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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks up but gains limited on Fed uncertainty, mixed data Markets closed slightly higher on Tuesday afternoon after a choppy day though upside was limited as investors focused on mixed data and the uncertain future for Federal Reserve monetary policy.
Last week's surprise decision by the Fed to maintain its stimulus programme is still fresh in investors' minds given that the central bank said the recovery was not strong enough to warrant a 'taper'.
New York Fed President William Dudley on Monday defended the move, saying the US economy had not picked up enough forward momentum, while James Bullard (St Louis Fed) said last week that quantitative easing could still be scaled back in October.
With a distinct lack of cohesion and an array of conflicting messages on monetary policy emanating from the Fed in the past few days, it is no wonder that an air of caution persists in equity markets at present," said Alex Young, Senior Sales Trader at CMC Markets.
The FTSE 100 in London finished 14.09 points higher at 6,571.46.
Economic data comes in mixed
Markets opened cautiously this morning after the rise in the German IFO business climate indicator for the month of September missed exectations. Business confidence increased in September to 107.7 from a revised 107.6 in August, falling below the consensus forecast for a gain up to 108.2.
On the other side of the Atlantic, the Conference Board's index measuring consumer confidence fell from a revised 81.8 to 79.7 in September, a four-month low and below the 79.9 expected by analysts.
Meanwhile, US house prices increased at an annual rate of 12.4% in July, up from the 12.1% rise in June, according to the S&P/Case-Shiller home price index. This was the biggest annual jump since February 2006 and was more or less in line with forecast.
Market Strategist Ishaq Siddiqi from ETX Capital said that the market is "again having to re-adjust its expectations for the timing of tapering" after figures showed a drop-off in housing and consumer activity – "both being engines of growth for the US". |
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| FTSE 100: Carnival Q3 hit by Costa Concordia
Carnival's shares fell in afternoon trade after the cruise line operator reported a decline in third-quarter income as it tries to recover from the sinking of its Costa Concordia ship last year. It also said that adjusted per-share results for the fourth quarter would be in the range of a loss of 3 cents to a profit of 3 cents, well below the current consensus forecast of 9 cents and 14 cents the year before.
Falling metals prices were weighing on the miners today with precious metal producers Fresnillo and Randgold among the worst performers as gold and silver values fall.
Banking stocks were leading the upside with Barclays, RBS and Standard Chartered registering decent gains before the close. Lloyds was also higher after a ratings upgrade by Investec from 'sell' to 'hold'. Analyst Ian Gordon said that the bank could benefit from less price-led competition in the mortgage market.
FTSE 100 newcomers Sports Direct and Coca-Cola HBC were also performing well, rebounding after their recent weakness since entering the top-tier index.
Power systems firm Rolls-Royce was a high riser after Jefferies raised its target for the stock from 1,250p to 1,400p and kept a 'buy' rating, showing optimism with its 'TotalCare' services.
Sector peer BAE Systems meanwhile advanced following the news that South Korea has reopened an $8bn tender to upgrade its ageing air force, raising hopes for the group's jointly-made Eurofighter aircraft (made with partners EADS).
FTSE 250: Euromoney jumps on Q4 pick-up
Business and financial magazine publisher Euromoney Institutional Investor surged this morning after reporting that revenue growth accelerated from 2% in the third quarter to 9% in the fourth. In a pre-close trading update, the company said that full-year adjusted pre-tax profit would be around £114m, slightly ahead of estimates.
Finance house Close Bros also gained after it reported a strong set of full-year results as Asset Management returned to profit while Banking and Securities improved.
FTSE 100 - Risers
Sports Direct International (SPD) 709.00p +2.16%
Coca-Cola HBC AG (CDI) (CCH) 1,864.00p +2.14%
Vodafone Group (VOD) 213.10p +1.91%
Barclays (BARC) 271.45p +1.91%
Royal Bank of Scotland Group (RBS) 367.90p +1.91%
International Consolidated Airlines Group SA (CDI) (IAG) 333.00p +1.83%
WPP (WPP) 1,292.00p +1.73%
Mondi (MNDI) 1,077.00p +1.70%
BG Group (BG.) 1,208.00p +1.68%
BAE Systems (BA.) 450.90p +1.55%
FTSE 100 - Fallers
Carnival (CCL) 2,258.00p -5.60%
Fresnillo (FRES) 971.00p -4.15%
Randgold Resources Ltd. (RRS) 4,493.00p -2.77%
Anglo American (AAL) 1,545.50p -1.78%
Unilever (ULVR) 2,524.00p -1.64%
Amec (AMEC) 1,091.00p -1.53%
Diageo (DGE) 2,019.50p -1.51%
Imperial Tobacco Group (IMT) 2,257.00p -1.40%
Schroders (SDR) 2,549.00p -1.39%
GKN (GKN) 347.60p -1.25%
FTSE 250 - Risers
Euromoney Institutional Investor (ERM) 1,149.00p +9.32%
Computacenter (CCC) 538.00p +6.53%
Diploma (DPLM) 636.00p +5.91%
Close Brothers Group (CBG) 1,189.00p +4.94%
Enterprise Inns (ETI) 148.00p +4.45%
Alent (ALNT) 368.80p +4.24%
Savills (SVS) 606.00p +4.21%
Barr (A.G.) (BAG) 541.50p +3.74%
NMC Health (NMC) 326.40p +3.45%
Howden Joinery Group (HWDN) 294.70p +3.44%
FTSE 250 - Fallers
Ocado Group (OCDO) 381.00p -4.56%
AL Noor Hospitals Group (ANH) 830.00p -3.71%
Hochschild Mining (HOC) 190.40p -3.40%
Ferrexpo (FXPO) 175.10p -2.61%
Workspace Group (WKP) 414.70p -2.33%
Afren (AFR) 142.80p -1.65%
Elementis (ELM) 246.60p -1.56%
Crest Nicholson Holdings (CRST) 335.10p -1.41%
Telecom Plus (TEP) 1,305.00p -1.29%
Cairn Energy (CNE) 259.40p -1.14% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rise following batch of economic data - German business confidence improves
- UK mortgage approvals rise
- US consumer confidence falls
- ECB officials speak on LTROs
FTSE 100: 0.21%
DAX: 0.32%
CAC 40: 0.59%
FTSE MIB 0.85%
IBEX 35: 0.58%
Stoxx 600: 0.18%
European stocks were sitting pretty as investors processed a mix of economic data in Germany, the UK and the US.
A report from the Ifo Institute showed business confidence in Germany increased at a slower-than-expected rate in September. The business climax index, based on a survey of 7,000 executives, rose to 107.7 from a revised 107.6 in August. Economists had pencilled in a reading of 108.
"Investors reacted favourably to the German Ifo release this morning, despite the headline figure falling short of expectations at 107.7," Alpari Market Analyst Craig Erlam pointed out.
"The miss was due to businesses assessment of current conditions, which fell slightly from a month earlier, despite expectations of a small rise. However, going forward businesses were much more optimistic, which is much more important from an investor perspective."
In the UK, mortgage approvals rose less than forecast in August but still reached the highest level since December 2009, the British Bankers' Association said today. The number of new mortgages approved in August rose to 38,200 from July's revised total of 37,400, compared to the consensus of 38,950 approvals.
Later in the day, a report revealed US consumer confidence declined in September to a four-month low as Americans showed pessimism towards the outlook for employment. The index for consumer sentiment in the world's biggest economy fell to 79.1 from 81.5 in August. A reading of 79.9 was expected by economists.
Meanwhile, the US house price index rose 1.0% in July from 0.7% the prior month, beating the estimate for a 0.8% rise.
US policymakers are turning to economic indicators as the Federal Reserve continues to weigh up when to begin scaling back its $85bn per month in bond purchases.
The Fed shocked markets last week when it announced it would keep its stimulus unchanged.
New York Fed President on Monday defended the central bank's move, saying the US economy was not ready for tapering, while St Louis Fed President James Bullard on Friday said a quantitative easing reduction could come in October.
Fed Bank of Cleveland President Sandra Pianalto and Fed Bank of Kansas President Esther George were due to speak in the US on Tuesday.
Debt ceiling talks are also in focus as the government must approve a budget to avoid a shutdown by October 1st.
ECB still deciding on LTROS, policymakers say
European Central Bank (ECB) policymakers stressed on Tuesday that a new round of long-term loans to banks was not a given.
While President Mario Draghi indicated that he's ready to provide funds to banks if needed, Executive Board member Benoit Coeure said that didn't mean they're committed to action at the moment.
"There has been no specific discussion on what the right instrument would be in case there would be a need for the ECB to act," he said at an event at the Bank of Finland in Helsinki.
Finnish central bank governor Erkki Liikanen, Austria's Ewald Nowotny and Vice President Vitor Constancio, reiterated Coeure's point.
Nokia, Total, Barclays
Nokia Corp. rallied following reports HTC infringed on two patent rights held by the Finnish phonemaker.
Total SA rose after Barclays raised its rating on the oil producer to 'equal weight' from 'underweight'.
Barclays gained following Monday's announcement that it was working to improve customer satisfaction with a review of overdraft fees.
Carnival slumped after reporting a drop in third-quarter income as the cruise operator continued to try to turn around profits following the sinking of the Costa Concordia ship off the coast of Italy last year.
Burckhardt Compression Holding declined after saying fiscal first-half net income will drop from a year ago.
Close Brothers Group jumped as the British financial services company said full-year net income increased 20% to £119.4m.
Deutsche Wohnen AG retreated following news Blackstone Group LP is selling a 4.8% stake in the German residential landlord.
Other asset classes slide
The euro fell 0.01% to the 1.3491 US dollar.
Brent crude futures dipped $0.241 to $107.900 per barrel on the ICE. |
| | This major London estate agent is listing on the LSE. | | Your free report on the Foxtons IPO includes: - IPO parameters (price range/market cap etc)
- Full breakdown of dates, including grey-market period.
- Performance of peers and recent similar IPOs.
Click here for your free Foxtons IPO report Losses can exceed deposits. |
| | US Market Report | | - Consumer confidence falls in September
- Home prices jump in July
- Stimulus, debt ceiling in focus
Dow Jones: 0.11%
Nasdaq: 0.32%
S&P 500: 0.08%
US markets opened with small gains on Tuesday morning in New York as investors digested mixed economic data and what it means for the future of monetary policy.
The Conference Board’s index measuring consumer confidence fell from a revised 81.8 to 79.7 in September, a four-month low and below the 79.9 expected by analysts.
“We suspect that if the rebound in equity prices is sustained, along with the drop back in gasoline prices, confidence will rebound,” said analyst Amna Asaf fromCapital Economics.
Other economic data released today showed that US house prices increased at an annual rate of 12.4% in July, up from the 12.1% rise in June, according to the S&P/Case-Shiller home price index. This was the biggest annual jump since February 2006 and was more or less in line with forecast.
Meanwhile, the regional manufacturing index for Richmond dropped from 14 to 0 in September (forecast: 12).
Last week’s surprise decision by the Federal Reserve to maintain its stimulus programme is still fresh in investors’ minds given that the central bank said the recovery was not strong enough to warrant a ‘taper’. New York Fed President William Dudley on Monday defended the move, saying the US economy had not picked up enough forward momentum, while James Bullard (St Louis Fed) said last week that a taper could still come in October.
Market Strategist Ishaq Siddiqi from ETX Capital said that the market is “again having to re-adjust its expectations for the timing of tapering” after figures showed a drop-off in housing and consumer activity – “both being engines of growth for the US”.
“Fed members haven’t been helpful, sending out contradictory messages; this all has left investors feeling as confused as ever over when we are likely to see the first round of liquidity reduction by the Fed,” he said.
Markets will now turn to speeches from Fed Bank of Cleveland President Sandra Pianalto and Fed Bank of Kansas President Esther George today.
Debt ceiling talks are also high on the agenda after President Barack Obama urged Congress to approve a budget to prevent a government shutdown by October 1st. If the government fails to reach an agreement to raise the borrowing authority, which is currently limited to $16.7tn, it could lead to the first default by the US on its debt obligations.
Facebook jumps after broker upgrade
Facebook advanced after Citigroup raised its rating from ‘neutral’ to ‘buy’ and hiked its price target from $32 to $55.
The bank had previously been concerned that the rapid shift from desktop to mobile could create “monetisation challenges”. However, after speaking to advertisers and agencies, it said: “We believe the factors driving the sudden inflection and growth in 2Q13 are sustainable and that there are a number of factors that should contribute to further growth and gains, and potential upside".
Semiconductor equipment maker Applied Materials rose strongly after saying it had agreed to buy Japanese peer Tokyo Electron for about $9.3bn in shares, merging the two companies into an entity worth around $29bn.
Boeing gained after EADS’ latest Global Market Forecast report said that current global aeroplane fleet could double to 36,560 aircraft by 2032. Investors were shrugging off the news that South Korea has reopened an $8bn tender to upgrade its ageing air force; Boeing’s S-15SE model had been seen as the firm favourite.
Software group Red Hat was a heavy faller today after disappointing second-quarter results following the bell last night. The company’s earnings and revenue figures beat analysts’ forecasts but billings growth came in well below expectations. |
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| | Broker Tips | | Broker tips: Lloyds, Rolls-Royce, Euromoney Investec has upgraded its rating for Lloyds from 'sell' to 'hold' and lifted its target from 65p to 76p on a more accommodative and targeted political and regulatory backdrop.
Analyst Ian Gordon said that the Prudential Regulation Authority's (PRA's) decision to impose an "accelerated" 3% leverage ratio will cause all banks to constrain lending relative to their pre-existing plans. There are now reduced incentives for price-led competition in the mortgage lending market which should support net interest margin (NIM) progression at Lloyds, Gordon said.
Power systems giant Rolls-Royce was a high riser on the FTSE 100 on Tuesday morning after Jefferies raised its target for the stock from 1,250p to 1,400p and kept a 'buy' rating as it expressed optimism with 'TotalCare', its maintenance and repair services activities.
"As time passes, we have deduced and discovered more about TotalCare to a point where we see it as an opportunity rather than as a risk or threat," Jefferies said.
Canaccord Genuity has upped its target for business and financial magazine publisher Euromoney Institutional Investor from 1,100p to 1,188p, saying that the company is 'back on track' after a pick-up in trading in the fourth quarter.
Analyst Simon Davies said that Euromoney's current valuation "looks attractive given the strength of the balance sheet, quality of earnings (with the highest proportion of subscription revenues within the peer group, at 51% of group sales), and high Emerging Markets exposure". | | |
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