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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 flat as focus turns to Fed meeting UK markets paused at a one-month high on Thursday morning as easing fears over Syria gave investors the chance to focus on the upcoming policy meeting at the Federal Reserve.
Traders were also showing caution ahead of speeches from Bank of England Governor Mark Carney as he testifies to the Treasury Select Committee along with Paul Fisher and David Miles about the recent Inflation Report. European Central Bank President Mario Draghi will also be in focus as he speaks at the Bank of Latvia’s Economic Conference.
The FTSE 100 was trading more or less flat on yesterday's close of 6,588.43 - this was its highest closing price since August 13th when it ended the day at 6,611.94.
"There is a suspicion that with no other major catalysts to spark further gains or trigger a sell-off, investors may decide to hold fire until the Federal Reserve meeting due to be held next Tuesday-Wednesday," said Financial Sales Trader Max Cohen from Spreadex.
A September 'tapering' of Fed stimulus had looked almost certain - according to the majority of economists - up until last week when a worse-than-expected US jobs report cast doubt on analysts' expectations. Given that the Fed said that reduction in asset purchases would be largely tied to the recovery in the labour market, there is now speculation that policymakers could wait until later on in the year before pulling the plug.
Fears over an impending US strike on Syria eased this week after it accepted a Russian proposal to hand over all chemical weapons to international control in an attempt to avoid US military action.
In a nationally televised speech on Tuesday night, US President Barack Obama asked Congress to delay a vote on military action against Bashar al-Assad's regime in light of recent diplomatic developments.
Meanwhile, Russian President Vladimir Putin on Wednesday called on the US not to intervene in Syria, especially if action is not approved by the United Nations first. In a commentary in The New York Times, he said: "The potential strike by the United States against Syria, despite strong opposition from many countries and major political and religious leaders, including the pope, will result in more innocent victims and escalation."
FTSE 100: Morrisons rises after first-half results
Supermarket group Morrisons was on the rise early on after a broadly in-line set of first-half results. Profits fell 21.8% to £344m while total turnover was flat at £8.9bn. Analysts at Jefferies said it was a "mixed" first half, but an "undemanding valuation and a clear reduction in capes intensity from here onwards point to an improving outlook". Sector peers Tesco and Sainsbury were also making gains.
Fellow retailer Next edged higher after it hiked its interim dividend payout after driving up half-year profits by 8.2% despite a fall in sales. The company said it was able to sell more clothes at full price and few clothes in its sale.
AMEC rose after walking away from making a firm offer for FTSE 250 engineering peer Kentz Corporation. The company said that it continues to see "attractive opportunities to extend its geographic footprint in the growth regions" and additional cash returns will be considered in the fourth quarter.
Travel and leisure stocks were in demand today with TUI Travel, InterContinental Hotels, IAG and Carnival among the best performers.
Silver and gold prices were heading lower this morning, causing shares of precious metals producers Randgold and Fresnillo to take a hit.
Industrial group Melrose was also in the red after Citigroup downgraded the stock to 'neutral' on valuation grounds after a strong outperformance so far this year. The bank said: "While we continue the see attractions on a long-term view, driven by a management team, which has strong record of creating value, we believe the near-term catalysts are appropriately captured in today’s share price."
Meanwhile, SABMiller was taken down a peg by Nomura which cut its rating to 'reduce'. The broker said that the exceptional profit growth across the industry since 2005 is "unlikely to be matched".
FTSE 250: Dialight and Kentz slump early on
Delays in the signing of large contracts has forced industrial lighting group Dialight to warn that profits will be flat for the full year, causing shares to plummet this morning. The group reassured that it had made good progress towards gaining "significant" deals for its obstruction systems products, but had only highlighted one since the June half-year point. However, a trading statement from the LED lighting specialist has warned that management did not expect these contracts to be awarded in time to make much of an impact on the current financial year.
Kentz was also a heavy faller after AMEC said it would not make a firm offer for the company after its £700m proposal was rejected. Kentz Chief Executive Christian Brown said: “I would like to take this opportunity to reiterate our focus on delivering value to our shareholders. Naturally, while we have every confidence in our ability to deliver further value to our shareholders as an independent company, the board fully understands its responsibilities to all our shareholders.” |
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| | FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 311.80p +4.91%
William Hill (WMH) 428.40p +2.24%
TUI Travel (TT.) 362.80p +2.08%
International Consolidated Airlines Group SA (CDI) (IAG) 317.90p +1.86%
Carnival (CCL) 2,463.00p +1.65%
Amec (AMEC) 1,072.00p +1.32%
InterContinental Hotels Group (IHG) 1,941.00p +1.30%
Wolseley (WOS) 3,420.00p +1.18%
Serco Group (SRP) 573.00p +0.97%
British Land Co (BLND) 576.00p +0.96%
FTSE 100 - Fallers
Aggreko (AGK) 1,602.00p -2.97%
Fresnillo (FRES) 1,196.00p -1.81%
Melrose Industries (MRO) 308.30p -1.41%
Randgold Resources Ltd. (RRS) 4,562.00p -1.13%
Vedanta Resources (VED) 1,182.00p -1.00%
Centrica (CNA) 394.30p -0.85%
SABMiller (SAB) 3,114.00p -0.83%
Antofagasta (ANTO) 879.00p -0.79%
Burberry Group (BRBY) 1,629.00p -0.67%
Rio Tinto (RIO) 3,186.00p -0.65%
FTSE 250 - Risers
Home Retail Group (HOME) 170.30p +3.90%
BH Global Ltd. USD Shares (BHGU) 11.84 +2.07%
Salamander Energy (SMDR) 127.40p +1.92%
Derwent London (DLN) 2,353.00p +1.73%
Crest Nicholson Holdings (CRST) 327.00p +1.71%
Alent (ALNT) 387.70p +1.47%
Capital & Counties Properties (CAPC) 326.20p +1.34%
KCOM Group (KCOM) 91.20p +1.33%
FirstGroup (FGP) 124.60p +1.30%
Debenhams (DEB) 103.70p +1.27%
FTSE 250 - Fallers
Dialight (DIA) 1,186.00p -13.75%
Kentz Corporation Ltd. (KENZ) 486.80p -11.41%
African Barrick Gold (ABG) 162.60p -4.35%
Rank Group (RNK) 155.00p -2.58%
Bumi (BUMI) 209.90p -2.24%
Spirax-Sarco Engineering (SPX) 3,015.00p -2.17%
Kazakhmys (KAZ) 303.60p -1.81%
Fenner (FENR) 384.00p -1.56%
Euromoney Institutional Investor (ERM) 1,167.00p -1.44%
Cranswick (CWK) 1,170.00p -1.35% |
| | UK Event Calendar | | INTERIMS
32Red, Elektron Technology, Fairpoint Group, Futura Medical, M. P. Evans Group, Morrison (Wm) Supermarkets, Next, Restore
INTERIM DIVIDEND PAYMENT DATE
Anglo American, Glencore Xstrata, Inchcape, Informa, Law Debenture Corp., Rio Tinto
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
ECB Report (EU) (09:00)
Import and Export Price Indexes (US) (13:30)
Industrial Production (EU) (10:00)
Initial Jobless Claims (US) (13:30)
Treasury Budget Statement (US) (19:00)
GMS
Aurum Mining
FINALS
Centaur Media, Dunelm Group, Kier Group
AGMS
Artemis Alpha Trust, Aurum Mining, Avengardco Investments Public Ltd GDR, Downing Distribution VCT 1, HML Holdings, Jaywing, NCC Group, New World Oil And Gas, Newmark Security PLC, Photo-Me International, Schroder Real Estate Investment Trust Ltd, Sirius Real Estate Ltd., The Real Good Food Company
FINAL DIVIDEND PAYMENT DATE
Creston
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks mixed on Syria, ahead of industrial data FTSE 100: 0.14%
DAX: 0.5%
CAC 40: -0.06%
FTSE MIB: -0.08%
IBEX 35: 0.62%
Stoxx 600: 0.02%
European stocks were mixed as the US warned that a diplomatic solution for Syria would take “some time”.
The White House said it would pursue talks despite scepticism from US lawmakers the Syria would accept Russia’s proposal to relinquish chemical weapons to international control.
President Barack Obama has called for a military strike if diplomacy failed after Syrian President Bashar Hafez al-Assad’s regime allegedly used chemicals weapons against civilians on August 21st.
Russia warned that a US strike could unleash extremist attacks and see Syria’s civil war go outside its borders.
“The news that Syria is willing to give up its chemical weapons to the international community to be destroyed and that the US is willing to consider this has provided a major boost to the markets,” said Craig Erlam, Market Analyst at Alpari Research.
“As we can see by the approval ratings in most countries, people do not want another war and this provides an alternative. Obviously, it’s unlikely to be plain sailing from here, with complications arising along the way, but this is an encouraging development from last week.”
Eurozone still needs loose monetary policy, says Asmussen
European Central Bank (ECB) member Jorg Asmussen said the Eurozone was not ready for an end to loose monetary policy.
In an interview with newspaper Boersen Zeitung, Amussen said any swift change in monetary policy would be too soon for the Eurozone economy.
He also said Europe’s biggest economy Germany would slow slightly in the third and fourth quarters of this year and encouraged France to do more to boost its competitiveness.
The ECB will release its monthly report on Thursday. On the same day industrial production figures will be unveild for July, and are expected to show a 0.2% drop compared to the previous month's 0.3% rise.
EDF, Morrison
Électricité de France’s shares fell after Norges Bank launched the sale of a €289m euro stake in the utility company on Wednesday evening.
Morrison Supermarkets advanced after raising its dividend and saying its restructuring plan was on track as it reported half-year results.
Travel stocks TUI Travel and International Consolidated Airlines (IAG) rallied. TUI’s stock was upgraded to an ‘overweight’ rating by JP Morgan Chase & Co while IAG announced it had expanded its services from Heathrow.
Oil gains, euro falls
Brent crude futures rose $0.233 to $111.760 per barrel on the ICE.
The euro fell 0.06% to the 1.3303 US dollar. |
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| | US Market Report | | US close: S&P 500 at one-month high, but Apple drags Nasdaq lower - Syria concerns continue to recede
- S&P at highest level since August 13th
- Apple disappoints with latest iPhone models
Dow Jones: 0.89%
Nasdaq: -0.11%
S&P 500: 0.31%
Both the Dow Jones and S&P 500 rose again on Wednesday as concerns over Syria continued to eased, though the Nasdaq was pushed into the red as analysts failed to show excitement over two new iPhones from tech giant Apple.
This was the seventh consecutive winning session for the S&P 500, sending the index to its highest level since August 13th, while the Dow Jones registered its third straight day of triple-digit gains.
Fears over an impending US strike on Syria eased on Tuesday after it accepted a Russian proposal to hand over all chemical weapons to international control in an attempt to avoid US military action.
In a nationally televised speech on Tuesday night, US President Barack Obama asked Congress to delay a vote on military action against Bashar al-Assad's regime in light of recent diplomatic developments. He said that the Russian initiative "has the potential to remove the threat of chemical weapons without the use of force".
Russian President Vladimir Putin on Wednesday called on the US not to intervene in Syria, especially if action is not approved by the United Nations first.
In a commentary in The New York Times, he said: "The potential strike by the United States against Syria, despite strong opposition from many countries and major political and religious leaders, including the pope, will result in more innocent victims and escalation."
Apple slumps as iPhone launch underwhelms
Apple, the biggest company on Wall Street by market capitalisation, didn't have the sort of effect it was hoping for with the launch of two new smartphones: its share price sharply as analysts expressed their disappointment with the latest gadgets - the iPhone 5S and iPhone 5C.
The 5S is an upgraded version of the iPhone 5 which features a faster chip, better camera and fingerprint scanner; while the 5C is a cheaper, more colourful, plastic version of the smartphone aimed at the emerging markets.
However, investments banks UBS, Credit Suisse and Bank of America Merrill Lynch (BofA) all downgraded their ratings for the stock. All three brokers were dissatisfied with Apple's pricing strategy given that the cost difference between the supposedly high- and lower-end versions is not substantial.
Verizon was slightly higher as the US telephone carrier began selling up to $49bn of bonds to help fund its buy-out of Verizon Wireless from joint venture partner Vodafone. The sale marks the largest corporate debt sale in history and is more than twice the size of Apple's unprecedented $17bn issue in April. Demand is said to have been positive so far.
IBM rose strongly after selling its customer care unit to Synnex for $505m.
Marriott International gained as China's richest man Wang Jianlin said he has hired two investment banks to buy hotel-management companies.
Weak third-tier economic figures
A report on wholesale inventories from the Commerce Department showed stockpiles at distributors rose less than forecast. US wholesale inventories grew by 0.1% month-on-month (Consensus: 0.3%). |
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| | Newspaper Round Up | | Thursday newspaper round-up: Royal Mail, Pensioners, Water bills The government will formally begin the sale of Royal Mail on Thursday by announcing its intention to float the 497-year-old postal service on the London Stock Exchange. It is the most ambitious privatisation since the sale of the railways in the 1990s and is forcefully opposed by the unions, who are meeting Royal Mail chief executive, Moya Greene, in Birmingham on Thursday to discuss threatened strike action, The Guardian explains.
Brussels is probing Ireland, Luxembourg and the Netherlands over their tax deals with multinationals paving the way potentially for a formal investigation into illegal sweeteners. Europe's top competition authority has asked the governments to explain their system of tax rulings and give details of assurances given to several specific companies – including Apple and Starbucks – according to people who have seen the request, the Financial Times explains.
Some water bills could fall by as much as 13% by the end of the decade with the industry regulator warning that it is to get tough on profiteering. Stung by a stream of negative publicity about the earnings of the big water companies, many of them foreign-owned, Ofwat has told bosses they should give up some of their profits and take advantage of record low interest rates to cut spending costs, The Times reports.
Over 75s have seen disposable incomes surge by almost a fifth during the economic downturn – the equivalent of £1,000 a year since 2008, a new study has revealed. While households across the country have seen their incomes squeezed by stagnant wage growth and rising inflation, some have had a much tougher time than others, new figures from Asda and the Centre for Economics and Business Research reveal. The gap has emerged as pensioners have seen rises in their income protected, while younger workers have been hit by stagnant wages and higher unemployment, The Daily Mail reports.
Grocery sales in the UK are set to surge by a fifth to more than £200bn by 2018 amid a combination of inflation, an increasing population and a steadily improving economy. Research from IGD, the consumer goods research group, predicts growth of 21% to push the market to roughly £206bn in the next five years. UK food sales are currently worth almost £170bn, up 3.7% on 2012, The Scotsman says.
The pound surged yesterday to its highest level against the dollar since January as investors bet that the Bank of England will lift rates sooner than expected in response to the rapidly improving jobs market. The number of jobless benefit claimants dropped to 1.4m in August, the lowest since early 2009, in the latest sign that Britain's recovery is gathering steam, The Times says. | | |
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