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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Stocks higher after late rally ahead of risk events The FTSE 100 managed to rally in afternoon trade on Wednesday to finish in positive territory after a strong start on Wall Street, though gains were only modest ahead of several key 'risk events' which have the potential to spark market volatility.
It is set to be a busy end to the week with central-bank policy decisions expected on Thursday from the Bank of Japan, Bank of England and the European Central Bank.
These will be followed by the all-important US jobs report on Friday which will be a large factor in the Federal Reserve's decision on whether or not to adjust current stimulus measures later this month.
The FTSE 100 finished up just 6.33 points at 6,474.74. However, the index rebounded strongly after hitting an intraday low of 6,424 in morning trade. The rally was ignited by decent gains for US markets helped by economic bellwetherFord Motor which reported 12% growth in new vehicle sales in August, its best retail-sales month in seven years.
World waiting on Congress vote on Syria
Fears about impending US military action in Syria were weighing on sentiment today as support for a Western intervention continues to grow.
The Senate Foreign Relations Committee last night gave the green light for a US attack on Syria, saying that the use of force "reflects the will and concerns of Democrats and Republicans alike".
This comes ahead of the crucial vote in Congress next week on President Barack Obama's call for action against the Bashar al-Assad regime which he claims is responsible for the deadly chemical weapons attack against the Syrian people in August.
Speaking in Sweden on Wednesday, Obama said the credibility of the US is on the line over its response. "We believe very strongly with high confidence that chemical weapons were used; we want to join with the international community for an effective response," he said.
Meanwhile, Russian President Vladimir Putin has warned America and its allies against taking one-sided action in Syria, saying any military strike without United Nations approval would be an “aggression”.
Services PMIs come in mixed
After a series of better-than-expected manufacturing surveys from across the globe in recent days, data from the Eurozone services sector disappointed today with activity growing by less than forecast in August.
The Eurozone services purchasing managers' index came in at 50.7, worse than the 51 estimate. Eurozone retail sales meanwhile increased by just 0.1% in July forecast: +0.2%.
In contrast, there was no letting up in the recent string of strong UK data this morning with the outlook for British economy continuing to brighten. The UK services PMI rose from 60.2 to 60.5 forecast: 59.7, the highest level since December 2006.
"Following surprisingly strong gains in August’s manufacturing and construction surveys, today’s services result at face value points to quarterly economic growth in Q3 not far off a rip-roaring 2%," said Martin Beck, UK Economist from Capital Economics.
FTSE 100: Airline stocks sink after Ryanair profit warning
Airline peers easyJet and IAG were flying lower after a gloomy outlook by Ryanair on the back of the hot weather in Northern Europe over the summer. Europe's largest budget airline scaled back its full-year profit guidance after worse-than-expected bookings but said that it could even fail to meet these forecasts if fares and yields continue to weaken over the coming winter.
IAG however managed to trim losses before the close slightly after reporting a 10.6% year-on-year jump in traffic numbers in August, with growth accelerating from the 6.6% annual rise registered in July.
Hargreaves Lansdown fell despite reporting record annual figures this morning. Full-year pre-tax profit rose 28% to £195.2m as the financial services company took on more clients and increased assets under administration by 38% rise in AuA to £36.4bn. Weighing on the price this morning could be Morgan Stanley's downgrade of the 'Diversified Financial' sector to 'neutral'.
TUI Travel, Resolution and BHP Billiton were also heavy fallers after going ex-dividend, meaning that from today new investors won't be able to get their hands on their latest dividend payments. Others that went ex-dividend on the blue-chip index include Admiral, Aggreko, ARM Holdings, IMI, Land Securities, Serco Group and Shire.
Even chemicals group Croda International was lower after going ex-div, shrugging off an upgrade by Exane BNP Paribas to 'outperform'. Sector peer Johnson Matthey however was a high riser after JPMorgan Cazenove raised its target from 2,600p to 2,800p.
Telecoms titan Vodafone also performed well as investors continue to digest Monday's deal to sell its 45% stake in Verizon Wireless to US partner Verizon for $130bn. While Vodafone will give out a hefty cash return to shareholders, it still has plenty of headroom to make some big acquisitions with the proceeds. Analysts also speculated that the downsized firm could itself become an M&A target from bigger suitors - American firm AT&T is said to be apparently interested.
FTSE 250: Ashtead falls despite upbeat guidance
Equipment rental company Ashtead Groupsaid it now expects a full-year result ahead of previous expectations after a strong first quarter, but shares slumped today pulling back after a strong +50% surge so far this year. Analysts at Panmure Gordon raised their target for the stock today but noted that comparatives will become tougher as the year progresses.
Micro Focus and Phoenix were falling sharply today after going ex-dividend. A host of others were also trading without the rights to their latest payouts, including 888 Holdings, Betfair, Elementis, esure, Greggs, Hikma Pharmaceuticals, Jardine Lloyd Thompson, Michael Page International, National Express Group, Polymetal International, Regus, SEGRO and Xaar.
Kenmare Resources was higher after Goldman raised its recommendation to 'conviction buy', while Salamander Energy was boosted by a Morgan Stanley upgrade to 'equalweight'. |
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| | FTSE 100 - Risers
Vodafone Group (VOD) 207.00p +2.22%
BG Group (BG.) 1,271.00p +1.92%
Johnson Matthey (JMAT) 2,972.00p +1.89%
Petrofac Ltd. (PFC) 1,418.00p +1.58%
Barclays (BARC) 289.55p +1.56%
Imperial Tobacco Group (IMT) 2,184.00p +1.39%
CRH (CRH) 1,393.00p +1.31%
Smith & Nephew (SN.) 769.50p +1.12%
Glencore Xstrata (GLEN) 315.35p +1.01%
ITV (ITV) 169.40p +0.95%
FTSE 100 - Fallers
easyJet (EZJ) 1,215.00p -5.08%
Resolution Ltd. (RSL) 314.80p -3.26%
TUI Travel (TT.) 334.60p -3.21%
Associated British Foods (ABF) 1,841.00p -3.16%
Persimmon (PSN) 1,111.00p -2.71%
Carnival (CCL) 2,334.00p -2.14%
BHP Billiton (BLT) 1,902.50p -1.73%
Hargreaves Lansdown (HL.) 1,014.00p -1.65%
Severn Trent (SVT) 1,698.00p -1.45%
Wood Group (John) (WG.) 792.00p -1.43%
FTSE 250 - Risers
Kenmare Resources (KMR) 28.69p +5.48%
St. Modwen Properties (SMP) 303.10p +5.28%
Bumi (BUMI) 219.70p +5.27%
Centamin (DI) (CEY) 45.91p +3.94%
JPMorgan Indian Inv Trust (JII) 300.90p +3.90%
Hochschild Mining (HOC) 267.50p +3.68%
PZ Cussons (PZC) 425.80p +3.68%
Fisher (James) & Sons (FSJ) 1,130.00p +3.39%
Supergroup (SGP) 1,159.00p +2.84%
Daejan Holdings (DJAN) 3,876.00p +2.68%
FTSE 250 - Fallers
Ashtead Group (AHT) 651.00p -5.31%
Barratt Developments (BDEV) 299.50p -4.92%
Thomas Cook Group (TCG) 135.70p -4.84%
Berkeley Group Holdings (The) (BKG) 2,076.00p -3.84%
Micro Focus International (MCRO) 744.00p -3.44%
Phoenix Group Holdings (DI) (PHNX) 729.00p -3.44%
Amlin (AML) 378.60p -2.90%
Bellway (BWY) 1,326.00p -2.79%
Bovis Homes Group (BVS) 753.50p -2.77%
Dunelm Group (DNLM) 934.00p -2.61% |
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Capital at Risk. |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks mixed on Syria and economic data FTSE 100: 0.08%
DAX: 0.20%
CAC 40: 0.14%
FTSE MIB: -1.36%
IBEX 35: 0.56%
Stoxx 600: 0.17%
European equities were little changed as the US prepared to vote on a resolution for military action in Syria and as data showed modest growth in the Eurozone.
The Senate Foreign Relations Committee laid out a deal on Tuesday evening that would set a 60-day deadline for military action in Syria, with one 30-day extension possible, according to a draft of the resolution.
The proposal, drafted by senators Robert Menendez and Bob Corker, would also stop involvement of US ground forces in Syria.
US President Barack Obama on Tuesday gained backing from Speaker John A. Boehner and House majority leader, Representative Eric Cantor of Virginia, for intervention in Syria.
It paved the way for wider approval in Congress when they vote on September 9th.
Speaking in Sweden on Wednesday, Obama said the credibility of the US is on the line over their response to Syria's alleged use of chemical weapons against civilians on August 21st.
Russian President Vladimir Putin has warned the US and its allies against taking one-sided action in Syria, saying any military strike without United Nations approval would be an “aggression”.
Investors are worried any strike would put a strain on America’s relationship with Syria’s allies Russia and China.
“Thus, investors should look out for any signs of volatility until at least the September 9th when the US congress reconvenes and the markets receive more information as to officials’ intentions towards Syria,” said Spreadex Financial Trader, Shavaz Dhalla.
Eurozone GDP rises
Second quarter gross domestic product in the euro-area rose 0.3% from the previous quarter, in line with expectations, a Eurostat report said.
Separately, Eurostat said July's volume of retail trade in the euro area rose a modest 0.1% on the month, even as June's reading was revised downwards to a 0.7% fall. Analysts had expected month-on-month growth of 0.4%.
Eurozone services activity expanded in August, according to Markit’s purchasing managers’ index (PMI) which increased to 50.7 last month from 49.8 in July. It came in below estimates for a final reading of 51 but above the 50 level that signals growth.
In the UK, Markit's Services PMI climbed to 60.5 last month from 60.2 in July, the highest level since December 2006, as new business growth reached a record high. Economists expected a reading of 59.
The data comes ahead of the Bank of England and the European Central Bank’s interest rate decision announcements on Thursday. The central banks are expected to keep interest rates on hold.
US trade deficit widens
The US trade deficit widened more than expected in July by 13.3% to $39.1bn from $34.5bn in June, the Commerce Department revealed, as imports rose and exports fell.
It came ahead of the Federal Reserve’s Beige Book, the central bank’s regional economic snapshot.
The report will offer some insight into how policymakers view the current economic environment before the central bank’s highly anticipated September 17th to 18th policy meeting.
The Fed is expected to start reducing its $85bn per month in bond purchases at its meeting this month so long as the economy and unemployment improves enough.
Ryanair and easyJet shares plunge
Ryanair fell to lead travel and leisure stocks lower after the budget carrier said full-year profit would be at the lower end of its forecast range of €570m to €600m.
easyJet also slipped along with an index of travel and leisure companies which dropped 2.5% on the Stoxx 600.
Iliad SA tumbled after the French mobile carrier’s founder Xavier Niel sold a 3% stake valued at about €320m.
ProSiebenSat.1 declined following reports KKR and Permira are selling a stake valued at more than €760m through holding company Lavena.
Ingenico SA gained after Goldman Sachs upgraded the French provider of payment terminals and services to ‘buy’ from ‘neutral’, citing profit growth.
SAS Group advanced as the Nordic region’s largest airline beat its profitability target in its fiscal third quarter.
Brent crude declines
Brent crude futures were down $0.2560 to $115.360 per barrel on the ICE.
The euro was up 0.34% to the 1.3215 US dollar. |
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| | US Market Report | | Syria vote may be delayed Dow Jones Industrials: 0.38%
Nasdaq Composite: 0.62%
S&P 500: 0.50%
Stocks are gaining as the news-flow regarding the Syria crisis continues to ebb and flow. Investors are also waiting on the release of the Federal Reserve’s Beige Book.
Fresh concerns over Syria ignited on Tuesday after US President Barack Obama gained backing from two Congressional leaders for military action in the country.
House speaker John A. Boehner and the House majority leader, Representative Eric Cantor of Virginia, said they would support the president’s call for an intervention in Syria, setting the stage for a broader approval from Congress when they vote on September 9th.
Russian President Vladimir Putin, however, has warned the US and its allies against taking one-sided action in Syria, saying any military strike without United Nations approval would be an “aggression”.
However, the most recent reports indicate that a vote on Syria by a Senate panel may be delayed, perhaps until as late as September 12th.
The Federal Reserve’s Beige Book, which comes ahead of the central bank’s highly anticipated September 17th to 18th policy meeting, has yet to be published tonight.
The book, a report in which each Federal Reserve bank gathers anecdotal information on current economic conditions in its district, should provide some insight as to where policymakers feel America’s financial state stands.
The Fed is expected to start reducing its $85bn per month in bond purchases at its meeting this month so long as the economy and unemployment improve.
News-flow particularly heavy in the technology sector
Shares of Micron jumped on news of a major fire at rival Hynix which forced the Asian manufacturer to suspend operations at one of its factories.
Apple is moving higher after Cantor initiated coverage of the stock with a price target of $777.
Linkedin stock is off by 2% after unveiling a $1bn share offering.
Morgan Stanley downgraded Microsoft to equal-weight.
Trade numbers worsen
The US trade deficit worsened to -$39.1bn in July, after a revised short-fall of -$34.5bn in the month before. The consensus estimate had been for a negative reading of -$38.6bn.
Same store comparable store sales dropped by 0.6% week-on-week according to the latest survey data from ICSC.
Crude futures retreat
Front month West Texa crude futures are now falling by 1.03% to the $107.42/barrel mark on the NYMEX.
10 year US Treasury yields are now rising by 1 basis point to the 2.87% |
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| | Wednesday newspaper round-up | | Abbey Protection: Numis lowers target from 120p to 110p keeping a hold recommendation.
Antofagasta: Investec takes target from 707p to 725p, but still recommends selling.
Ashtead Group: Numis ups target from 640p to 670p and retains a hold recommendation. Panmure Gordon increases target from 784p to 835p and stays with its buy recommendation.
ASOS: Citi increases target from 4800p to 5800p and keeps a buy recommendation. Barclays raises target from 4500p to 5600p staying with an overweight rating.
Belgravium Technologies: WH Ireland reintroduces with a target of 4.50p and an outperform rating.
Croda International: JP Morgan ups target from 2820p to to 2850p maintaining an overweight rating. Exane upgrades to outperform with a target of 3200p.
Dixons Retail: Citi shifts target from 50p to 53p and stays with its buy recommendation. Barclays revises target from 46p to 52p maintaining an overweight rating.
Elementis: JP Morgan moves target from 280p to 284p reiterating an overweight rating.
Faroe Petroleum: Morgan Stanley downgrades to underweight with a target of 130p.
Greene King: Deutsche Bank ups target from 820p to 890p keeping a buy recommendation.
Hargreaves Lansdown: Canaccod Genuity increases target from 850p to 1040p keeping a hold recommendation. Numis takes target from 997p to 1006p leaving its hold recommendation unchanged.
Home Retail Group: Citi moves target from 105p to 115p, but still recommends selling.
IFG Group: N+1 Singer cuts target from 130p to 121p, while retaining a buy recommendation.
Inmarsat: Alphavalue lowers target from 743.60p to 742p downgrading from add to reduce.
Johnson Matthey: JP Morgan takes target from 2600p to 2800p and maintains a neutral rating.
Kenmare Resources: Goldman Sachs upgrades to strong buy with a target of 40p.
Kingfisher: Barclays ups target from 430p to 450p retaining an overweight rating.
Kofax: Investec places both its target prev.: 280p and its sell recommendation under review. Panmure Gordon ups target from 331p to 363p and upgrades from hold to buy.
Lombard Medical Technologies: Canaccord Genuity ups target from 243p to 256p and maintains a buy recommendation.
Mar City: WH Ireland upgrades to outperform with a target of 11p.
Monitise: Goldman Sachs takes target from 60p to 100p and reiterates a strong buy recommendation.
Next: Citi increases target from 5200p to 5650p and maintains its buy recommendation.
Pan Africa Resources: HSBC shifts target from 15p to 16p and keeps its neutral rating.
Pearson: Investec raises target from 1250p to 1325p reiterates an add rating.
Prezzo: Canaccord Genuity moves target from 105p to 140p and stays with its buy recommendation.
Regus: JP Morgan ups target from 140p to 165p, but keeps an underweight rating.
Rio Tinto: Alphavalue shifts target from 2973.60p to 2978.20p, while downgrading from add to reduce.
Salamander Energy: Morgan Stanley upgrades to equal-weight with a target of 165p. HSBC lowers target from 264p to 260p and leaves its overweight rating unaltered.
Sierra Rutile: Goldman Sachs cuts target from 100p to 60p downgrading to neutral.
Smith DS: JP Morgan raises target from 277p to 308p and retains an overweight rating.
SQS Software Quality Systems: Sanlam Securities increases target from 360p to 400p, while downgrading to hold. Westhouse Securities ups target from 400p to 460p and keeps a buy recommendation. Canaccord Genuity takes target from 380p to 400p and leaves its buy recommendation unchanged.
Staffline Recruitment Group: Liberum Capital raises target from 530p to 570p maintaining a buy recommendation.
Synthomer: JP Morgan moves target from 235p to 244p and leaves its neutral rating unchanged.
Victrex: JP Morgan takes target from 1500p to 1550p staying with its neutral rating.
WPP Group: Jefferies raises target from 1185p to 1425p and keeps a buy recommendation. Citi ups target from 1040p to 1250p reiterating a neutral rating. | | |
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