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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 open: Banks lead markets lower ahead of FOMC meeting Following a strong start to the week, investors turned cautious ahead of the conclusion of the Federal Open Market Committee (FOMC) meeting tomorrow afternoon as markets ready themselves for one of the most closely-watched US policy decisions in recent years, given rising expectations that the Fed will begin to scale back its quantitative easing (QE) programme.
The FTSE 100 was registering small losses early on, retreating from Monday's close of 6,622.86 - this was the best close for London's benchmark index since August 2nd, when it finished the day at 6,647.87.
"The two-day event is certain to install some trepidation in investors with the majority of economists surveyed of the belief that Fed policymakers will cut monthly bond buying by $10bn to $75bn per month," said Financial Sales Trader Max Cohen from Spreadex.
Markets across the globe gained on Monday after the announcement by well-known hawk Larry Summers that he has dropped out of the race to take over Ben Bernanke's position as Fed Chairman when he steps down in January. Cohen said that Summers would have tightened policy more than Fed Vice Chair Janet Yellen, who is now widely regarded as the firm favourite to succeed Bernanke.
He said: "many analysts point out that (interest) rate-hike expectations are of fundamental importance because of their impact on short-term US bond yields and thereby the dollar's yield attraction. A faster pace of rate increases would make the dollar more attractive given that many other central banks, such as the European Central Bank and the Bank of Japan, are perceived to be nowhere near tightening."
FTSE 100: Lloyds falls as government begins stake sale
Banking group Lloyds was in the red this morning after the UK Financial Investments sold a 6% stake in the bank for £3.2bn, reducing its shareholding from about 38.7% to approximately 32.7%. The Treasury sold 4.3bn shares at a price of 75p each. Part-nationalised peer RBS was also lower early on.
Barclays was also lower after it was reported yesterday that it is facing a £50m fine for allegedly breaching market listing rules over its capital raisings. The bank also said that its adjusted income for July and August was lower than in the same period of the previous year, resulting in a 5% year-on-year decline in adjusted income for the eight-month period to August 31st.
Mining stocks were also out of favour as risk appetite was scaled back ahead of the Fed decision - Vedanta Resources, Glencore Xstrata, Rio Tinto and Anglo American were among the FTSE 100's worst performers .
Glencore Xstrata was being weighed down by UBS which lowered its rating from 'buy' to 'neutral', saying that a "challenging" price outlook will cap share-price performance.
Randgold however bucked the trend as gold prices rebounded after hitting a five-week low the day before.
FTSE 250: Debenhams rises after pre-close statement
Debenhams was a high riser after saying it expects annual pre-tax profit in line with market forecasts on the back of growth in market share and like-for-like sales. In a trading update ahead of results for the year to end of August, the retailer reported a 2% rise in group like-for-like sales supported by online revenue and market share gains in clothing and non-clothing such as womenswear and beauty.
Crest Nicholson, the housebuilder which debuted on the stock market back in February, edged higher after reservations in the third quarter were given a boost by the government's stimulus measures as it gave a confident outlook for the future.
Domino Printing fell after it warned that market conditions have continued to remain "difficult" in many regions, and in some areas it has seen signs of possible deterioration. |
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| | FTSE 100: Fresnillo drops on Mexican levy concerns
Precious metals miners Fresnillo plummeted today on concerns over levies on the mining sector in Mexico. "All of Fresnillo's seven operational mines are in Mexico, leaving it heavily exposed to such an increase in its tax burden," said Financial Sales Trader Max Cohen from Spreadex.
Heading the other way were insurers as financials benefitted from the global rally. Standard Life, Legal & General, Aviva and Prudential were among the highest risers, with the latter lifted by Panmure Gordon which raised its target for the stock saying that the business is under-valued.
Barclays meanwhile was boosted by Nomura which upgraded its rating by two notches from 'reduce' to 'buy' saying that the UK banking group is well-positioned for building macroeconomic momentum.
Oil and gas services provider Petrofac was higher on the news that it is to operate and manage two training facilities for Malaysian oil major PETRONAS in a contract worth $120m.
Airlines were providing a lift as falling crude prices eased fears about rising jet fuel costs; easyJet and IAG were in demand.
FTSE 100 - Risers
Antofagasta (ANTO) 883.00p +3.94%
Standard Life (SL.) 354.10p +3.33%
International Consolidated Airlines Group SA (CDI) (IAG) 325.00p +3.27%
Sage Group (SGE) 360.40p +2.77%
easyJet (EZJ) 1,331.00p +2.38%
Shire Plc (SHP) 2,533.00p +2.26%
Aviva (AV.) 419.80p +2.19%
Aggreko (AGK) 1,649.00p +2.04%
Vedanta Resources (VED) 1,183.00p +1.98%
Prudential (PRU) 1,189.00p +1.89%
FTSE 100 - Fallers
Fresnillo (FRES) 1,045.00p -12.77%
Eurasian Natural Resources Corp. (ENRC) 215.50p -2.05%
Rolls-Royce Holdings (RR.) 1,106.00p -1.69%
Tate & Lyle (TATE) 786.00p -0.88%
Persimmon (PSN) 1,153.00p -0.77%
Admiral Group (ADM) 1,214.00p -0.74%
ITV (ITV) 182.10p -0.71%
GlaxoSmithKline (GSK) 1,614.00p -0.49%
Pearson (PSON) 1,277.00p -0.47%
Burberry Group (BRBY) 1,602.00p -0.44%
FTSE 250 - Risers
Dunelm Group (DNLM) 997.50p +6.12%
Genus (GNS) 1,387.00p +4.76%
Xaar (XAR) 798.00p +3.77%
PayPoint (PAY) 1,125.00p +3.21%
Betfair Group (BET) 1,087.00p +2.94%
Beazley (BEZ) 216.40p +2.90%
Elementis (ELM) 262.60p +2.70%
Fidessa Group (FDSA) 2,173.00p +2.65%
Amlin (AML) 400.60p +2.64%
Ashtead Group (AHT) 668.50p +2.45%
FTSE 250 - Fallers
Hochschild Mining (HOC) 237.40p -13.99%
African Barrick Gold (ABG) 143.90p -12.36%
Polymetal International (POLY) 659.50p -7.05%
Kazakhmys (KAZ) 290.00p -3.69%
Petra Diamonds Ltd.(DI) (PDL) 117.40p -2.81%
888 Holdings (888) 160.40p -2.79%
Cobham (COB) 294.10p -2.39%
Halfords Group (HFD) 396.90p -2.24%
Atkins (WS) (ATK) 1,212.00p -2.18%
TalkTalk Telecom Group (TALK) 252.90p -1.79% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Markets jittery ahead of Fed meeting - Federal Reserve begins policy meeting
- German investor confidence report
- UK consumer price index
FTSE 100: -0.28%
DAX: -0.21%
CAC 40: -0.33%
FTSE MIB: -0.51%
IBEX 35: -0.49%
Stoxx 600: -0.35%
European stocks were in the red as investors grew nervous ahead of the Federal Reserve's two-day policy meeting.
The closely watched meeting, which begins later Tuesday, will announce whether the central bank will trim stimulus measures.
According to analysts at Barclays Research, the Fed is likely to taper monthly asset purchases from $85bn to $70bn this week. However, they note that the announcement of tapering by $10-15bn in itself is unlikely to move the market.
"We think the key to gauge the market reaction would be: 1) the Fed's updated economic forecasts, especially its forecast for end-2016 to be included for the first time; and 2) the tone in the Chairman Bernanke's press conference regarding the pace/conclusion of tapering," Barclays Research explained.
Global stocks started the week higher following news Lawrence Summers bowed out of the race for the position of Federal Reserve Chairman, paving the way for current Vice Fed Chair Janet Yellen.
Yellen is favoured by investors as she is expected to support a slow tapering of quantitative easing.
German and UK economic data
A report on Germany's investor confidence is expected to show a rise in September when released Tuesday morning. The ZEW index will jump to 45 from a reading of 42 in August, according to forecasts.
Britain's consumer price index will come in at 2.7% for August, down from the previous month's 2.8%, economists predict.
UK government sells Lloyds stake
Lloyds slumped after the UK government sold a £3.2bn stake in the lender.
Continental and Acerinox SA retreated after investors sold shares in the companies.
Glencore Xstrata fell as UBS lowered its rating on the miner from 'buy' to 'neutral'.
Domino Printing Services declined after warning of difficult market conditions restricting revenue growth in the 10 months to the end of August.
Brent crude oil falls
Brent crude futures dropped $0.228 to $109.820 per barrel on the ICE.
The euro rose 0.12% to the 1.3350 US dollar. |
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| | US Market Report | | US close: Markets broadly higher after Summers´ withdrawal, Apple weighs on Nasdaq - S&P 500 within reach of record high
- Apple drags Nasdaq lower on China worries
- Summers' withdrawal celebrated by markets
Dow Jones: 0.77%
Nasdaq: -0.12%
S&P 500: 0.57%
US stocks finished broadly higher on Monday after the announcement by Larry Summers that he has dropped out of the race to take over Ben Bernanke's position as head of the Federal Reserve.
The S&P 500 finished up 9.61 (+0.6%) at 1,697.6, coming within just five points of its record high of 1,709.67 reached on August 2nd. Analysts at Citi Research said they expect the index to rise to 1,900 by the end of 2014.
However, while both the Dow Jones and S&P 500 performed strongly the tech-heavy Nasdaq was dragged down by Apple, the largest listed company by market capitalisation.
Furthermore, gains across the wider market were trimmed by the close after a shooting at a Navy Yard in Washington DC which left 12 people dead and several others injured. The gunman, found to be a government contractor who entered the facility legally with a valid ID card, was eventually killed by police. The incident caused delays to flights from the nearby Reagen National Airport and sent the US Senate into lockdown.
Summers withdraws; Fed in focus
Stocks across the globe were performing well after former Treasury Secretary Summers withdrew from the race to replace Bernanke as head of the US central bank when he steps down in January. The removal of Summers - widely viewed as a hawkish candidate in the running - prompted a positive reaction on the back of hopes that current Fed Vice Chair and well-known dove Janet Yellen may now be the firm favourite. She is expected to favour a slower reduction of stimulus than Summers.
The Federal Open Market Committee's (FOMC's) two-day meeting is due to come to a close on Wednesday and will likely be one of the most closely-watched policy decisions in recent years, given rising expectations that the Fed will begin to scale back its quantitative easing (QE) programme.
According to analysts at Barclays Research, the Fed is likely to taper monthly asset purchases from $85bn to $70bn this week. However, they note that the announcement of tapering by $10-15bn in itself is unlikely to move the market.
Empire State index disappoints
The Federal Reserve Bank of New York´s regional manufacturing gauge fell back in August to a reading of 6.29 from 8.24 in the month before. Analysts were expecting a small rise to 9.10.
US industrial production increased by 0.4% from July to August, in line with the consensus forecast. Manufacturing production meanwhile rose by 0.7%, ahead of the 0.5% increase expected.
"[Monday] saw the release of two key manufacturing figures, with both coming in below market estimates and pointing to yet more confusion as to whether the FOMC outlook will see the US economy as sufficiently strong enough to withstand a reduction in the current rate of asset purchases," said Market Analyst Joshua Mahony from Alpari.
Apple slumps on China reports
Tech giant Apple, which underwhelmed analysts with the release of two new iPhone models last week, was under the weather again on Monday after The Wall Street Journal said that China Telecom was reducing its subsidies for the popular smartphone.
Packaging products group Boise surged by as much as a quarter after being bought by larger rival Packaging Corp of America for $1.28bn.
JPMorgan has raised its recommendation on Bristol-Myers Squibb to 'overweight' from 'neutral', causing the stock to advance strongly. The bank said the move came after a pull-back in the shares over the past several months and ahead of "a number of important catalysts over the next 12-18 months, particularly for the company's immunotherapy platform".
Financial stocks were performing well on Monday on the back of the news that Summers is no longer running for the position of Fed Chair - Morgan Stanley, Goldman Sachs, JPMorgan Chase, Bank of America and Citigroup were all making gains.
S&P 500 - Risers
Allegheny Technologies Inc. (ATI) $30.95 +8.10%
Boeing Co. (BA) $115.67 +3.90%
PulteGroup Inc. (PHM) $17.14 +3.75%
D. R. Horton Inc. (DHI) $19.84 +3.66%
Bristol-Myers Squibb (BMY) $45.14 +3.63%
Adt Corp (ADT) $41.48 +3.62%
CF Industries Holdings Inc. (CF) $200.68 +3.53%
Franklin Resources Inc. (BEN) $50.19 +3.38%
International Game Technology (IGT) $20.96 +3.15%
Broadcom Corp. (BRCM) $26.91 +3.10%
S&P 500 - Fallers
Apple Inc. (AAPL) $450.12 -3.18%
Altera Corp. (ALTR) $37.85 -2.12%
Denbury Resources Inc. (DNR) $17.41 -2.08%
AutoNation Inc. (AN) $52.20 -1.60%
Hewlett-Packard Co. (HPQ) $21.74 -1.50%
Anadarko Petroleum Corp. (APC) $93.36 -1.41%
Valero Energy Corp. (VLO) $34.56 -1.40%
Marathon Petroleum Corporation (MPC) $66.95 -1.38%
Tesoro Corp. (TSO) $45.49 -1.34%
J.C. Penney Co. Inc. (JCP) $13.64 -1.30%
Dow Jones I.A - Risers
Boeing Co. (BA) $115.67 +3.90%
General Electric Co. (GE) $24.14 +1.51%
Procter & Gamble Co. (PG) $80.16 +1.40%
E.I. du Pont de Nemours and Co. (DD) $59.70 +1.39%
Travelers Company Inc. (TRV) $84.57 +1.21%
United Technologies Corp. (UTX) $109.70 +1.21%
Verizon Communications Inc. (VZ) $48.30 +1.13%
JP Morgan Chase & Co. (JPM) $53.14 +1.05%
Unitedhealth Group Inc. (UNH) $75.12 +0.86%
Merck & Co. Inc. (MRK) $48.19 +0.84%
Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $21.74 -1.50%
Microsoft Corp. (MSFT) $32.80 -0.69%
Intel Corp. (INTC) $23.39 -0.21%
Chevron Corp. (CVX) $124.08 -0.05%
Nasdaq 100 - Risers
Broadcom Corp. (BRCM) $26.91 +3.10%
Expedia Inc. (EXPE) $52.42 +2.40%
Autodesk Inc. (ADSK) $39.07 +2.33%
Staples Inc. (SPLS) $14.76 +2.29%
Biogen Idec Inc. (BIIB) $239.57 +2.07%
Amgen Inc. (AMGN) $117.18 +1.84%
Dollar Tree Inc (DLTR) $55.86 +1.80%
Catamaran Corp (CTRX) $55.47 +1.78%
Seagate Technology Plc (STX) $40.94 +1.71%
Activision Blizzard Inc. (ATVI) $17.25 +1.65%
Nasdaq 100 - Fallers
Facebook Inc. (FB) $42.51 -4.06%
Apple Inc. (AAPL) $450.12 -3.18%
Vertex Pharmaceuticals Inc. (VRTX) $76.18 -2.65%
Altera Corp. (ALTR) $37.85 -2.12%
Equinix Inc. (EQIX) $173.76 -1.86%
F5 Networks Inc. (FFIV) $90.88 -1.23%
Netflix Inc. (NFLX) $302.16 -1.14%
Fossil Group Inc (FOSL) $115.02 -1.02%
Celgene Corp. (CELG) $148.04 -0.96%
Nuance Communications Inc. (NUAN) $19.15 -0.83% |
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| | Newspaper Round Up | | Tuesday newspaper round-up: Argentina, Yellen, European banks Shale oilfields in countries such as Argentina, Russia and Algeria hold larger reserves than the regions at the heart of the US energy boom, and have the potential to make a significant contribution to global crude supplies in the next decade, according to new research. Analysis by IHS published on Tuesday morning suggests fields including the Vaca Muerta of Argentina, the Bazhenov shale of Siberia and the Silurian shales of north Africa could produce more than the Bakken shale of North Dakota and the Eagle Ford of Texas, the Financial Times says.
Rebel Democrats on Monday threw their weight behind a growing campaign for Janet Yellen to take over the US Federal Reserve, as their successful revolt against White House pick Larry Summers emboldened those calling for tougher policy toward Wall Street. Senator Elizabeth Warren, one of four banking committee members who helped force Summers, a former Citigroup adviser, to withdraw from the race on Sunday, said the development should give President Barack Obama a chance to rethink his strategy, which has been criticised for being too accommodating toward banking interests, according to The Guardian.
A £100m blunder by one of Britain's biggest banks will result in more than 300,000 loan customers each receiving a refund of hundreds of pounds next month. Barclays admitted yesterday that it had incorrectly charged interest to personal loan customers after making mistakes on their paperwork, in breach of the Consumer Credit Act. The errors, which go back five years, are understood to have been made mostly on statements and arrears notices, The Times reports.
The UN declared on Monday that it has found "clear and convincing evidence" that surface-to-surface rockets armed with the chemical nerve agent sarin were used to carry out the mass killings in eastern Damascus last month. As the US and Russia pressed ahead with negotiations over a plan to rid the Assad regime of its chemical weapons, the UN said the massacre in Ghouta on August 21st "unequivocally and objectively" involved chemical weapons to kill civilians on a "relatively large scale," the Financial Times writes.
The acrimonious legal battle between Eurasian Natural Resources Corporation (ENRC) and its former director, Sir Paul Judge, took a further twist on Monday when the Kazakh miner published what it claimed were transcripts of conversations showing the senior City figure leaking confidential company information. It is the latest salvo in ENRC's lawsuit against Judge, launched in July, which alleges he deliberately disclosed details of company board meetings to the media. Judge filed a counter claim this month denying the accusation and accusing the mining firm of libel, The Guardian reports.
European banks have cut lending across borders under pressure from politicians to keep cash in their respective countries and lend locally, economists André Sapir and Guntram Wolff said in a paper for Brussels-based Bruegel. "The euro area financial system is now in an unsatisfactory state. Banks do not lend to each other across borders without asking for a significant premium," they told the think-tank. "Markets still believe that significant problems lurk in the balance sheets of euro area banks," they added, according to The Times. | | |
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