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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: US and Italian politics weigh on risk appetite Political uncertainty in the US and Italy along with disappointing economic figures from China weighed heavily on risk appetite on Monday morning with mining stocks bearing the brunt of the selling.
The FTSE 100 opened around 0.8% lower at 6,458.29 in early trading; the last time it closed lower was on August 30th when it ended the day at 6,412.93.
"Unsurprisingly, safe-haven assets have been the destination of a lot of the cash leaving risk assets. High-quality fixed income, Swiss francs and dollars have been in demand against this sell-off and will continue to be so until a catalyst can stabilise or reverse sentiment," said Financial Trader David White from Spreadex.
US politicians have so far failed to agree a new spending bill and have only until midnight tonight to make a decision over an extension to the current debt-ceiling limit of $16.7tn to avoid a government shutdown. The House of Representatives yesterday voted to tie in a delay of the 'Obamacare' health act to its extension of the debt-ceiling deadline. It is now up to the Senate to approve the bill later today, however the Democrats have already stated that they would not agree to such a measure.
"This is just one example of the games still being played in Congress, as we approach the deadline, and both parties are as guilty as each other for creating so much uncertainty for the financial markets," said Market Analyst Craig Erlam from Alpari.
Meanwhile in Italy, centre-right leader Silvio Berlusconi pulled his ministers out of their five-month-old coalition, putting Prime Minister Enrico Letta's government in a difficult position. Letta and President Giorgio Napolitano are anticipated to seek a new parliamentary majority to support a cabinet and avoid elections.
HSBC's China purchasing managers' index came in at 50.2 in September, significantly below estimates of 51.2 and under last month's reading of 50.1. A readings of 50 separates expansion and contraction. HSBC China Chief Economist, Hongbin Qu, said: "Growth is bottoming out on Beijing's mini-stimulus. We expect continuous policy efforts to sustain the recovery."
As for economic data closer to home, house prices in England and Wales rose by 0.5% month-on-month in September and are now up by 2.4% since the same month of one year ago, according to a survey from property analysis firm Hometrack. That was their biggest month-on-month gain in more than six years, since May 2007.
Miners sink sharply after Chinese data
Mining stocks were shrugging off an upturn in metals prices this morning and instead fell on the back of the disappointing data from the world's top metals user, China. Glencore Xstrata, Anglo American, Rio Tinto, Fresnillo, Antofagasta and Randgold Resources were all falling sharply this morning.
Housebuilder Persimmon was among the better performers this morning, rebounding after some heavy falls on Friday after today's upbeat data from the UK housing market and an upgrade from JPMorgan Cazenove to 'overweight'. Persimmon sank sharply last week as investors reacted to comments over stimulus from government officials as well as the news that the company is halting building work in some parts of the south Wales valleys.
Housing peers Barratt Development, Tayloy Wimpey and Bellway were also higher this morning. Bovis Homes however was in the red after JPMorgan downgraded the stock to 'underweight'.
High Street bookie William Hill was higher after Deutsche Bank lifted its recommendation for the shares to 'buy', while pharmaceutical firm Shire was upgraded by JPMorgan to overweight'. |
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| FTSE 100: Persimmon drops on Carney, Osborne comments
Housebuilder Persimmon was leading the downside on Friday after Bank of England (BoE) Governor Mark Carney said that he doesn't see the need for more stimulus to prop up the economy. Markets were also reaction to Persimmon's plans to halt building work in some parts of the south Wales valleys after the company said the sites don't generate sufficient profits.
Mining stocks including Antofagasta, Rio Tinto, BHP Billiton and Vedanta Resources were also providing a drag today bearing the brunt of reduced risk appetite. Rio was shrugging off some upbeat comments from Nomura which labelled it as "one of the cheapest stocks" within its peer group.
Randgold Resources and Fresnillo edged lower after Bank of America Merrill Lynch cut its gold-price forecast by 17% to $1,294 an ounce for 2014.
SABMiller and Diageo were under pressure after Credit Suisse downgraded the European beverages sector from 'overweight' to 'benchmark', saying it is the "third-most expensive sector in Europe [...] and has the second-worst earnings revisions".
Engineering group IMI was among the best performers after hiring former Weir boss Mark Selway as its new Chief Executive. He will take the reins from company veteran Martin Lamb who will step down at the end of this year after nearly 13 years at the helm.
Babcock, the engineering support services firm, edged higher after saying that trading in the first half ending September 30th has "remained positive". The company said it "will continue to make further strong progress and that results for the 2013/14 financial year will be in line with its expectations".
FTSE 250: Premier Farnell climbs on UBS comments
Shares in Premier Farnell gained strongly on Friday after analysts at UBS said that an acceleration of growth at the electronic components firm should be "around the corner". "Given forward indicators (e.g. PMIs) only improved from around May, with the normal six-month lag we note company growth should start to improve from November and so are unconcerned by the lack of acceleration seen so far," the bank said.
Housing stocks were falling heavily today after comments from Carney and Osborne prompted investors to take profits. Countrywide, Taylor Wimpey, Barratt Developments and Bellway were registering heavy losses by the close. Mining stocks were also lower including Hochschild Mining, EVRAZ, Kazakhmys and Centamin.
FTSE 100 - Risers
Sports Direct International (SPD) 713.00p +1.78%
Aggreko (AGK) 1,608.00p +1.13%
IMI (IMI) 1,469.00p +1.10%
BT Group (BT.A) 346.40p +0.96%
GKN (GKN) 352.10p +0.83%
Petrofac Ltd. (PFC) 1,410.00p +0.71%
Babcock International Group (BAB) 1,201.00p +0.67%
Carnival (CCL) 2,113.00p +0.62%
ARM Holdings (ARM) 1,010.00p +0.60%
SSE (SSE) 1,468.00p +0.55%
FTSE 100 - Fallers
Persimmon (PSN) 1,061.00p -4.33%
Antofagasta (ANTO) 830.00p -2.75%
Vedanta Resources (VED) 1,073.00p -2.72%
Rio Tinto (RIO) 3,067.00p -2.34%
Tate & Lyle (TATE) 738.00p -2.25%
BHP Billiton (BLT) 1,841.00p -2.23%
SABMiller (SAB) 3,165.00p -2.12%
Unilever (ULVR) 2,457.00p -1.92%
Anglo American (AAL) 1,540.00p -1.88%
Sage Group (SGE) 329.90p -1.79%
FTSE 250 - Risers
Moneysupermarket.com Group (MONY) 150.10p +4.53%
Premier Farnell (PFL) 216.70p +2.75%
Menzies(John) (MNZS) 809.00p +2.34%
Fenner (FENR) 398.90p +2.05%
Millennium & Copthorne Hotels (MLC) 552.00p +1.66%
Crest Nicholson Holdings (CRST) 335.50p +1.64%
RPS Group (RPS) 268.00p +1.63%
Thomas Cook Group (TCG) 147.50p +1.51%
888 Holdings (888) 165.90p +1.47%
Fidessa Group (FDSA) 2,012.00p +1.46%
FTSE 250 - Fallers
Hochschild Mining (HOC) 180.10p -6.15%
Countrywide (CWD) 518.00p -4.87%
Kazakhmys (KAZ) 273.90p -4.46%
Centamin (DI) (CEY) 45.35p -4.10%
Evraz (EVR) 128.00p -4.05%
Taylor Wimpey (TW.) 97.00p -3.87%
AZ Electronic Materials SA (DI) (AZEM) 299.40p -3.67%
Keller Group (KLR) 1,002.00p -3.19%
Barratt Developments (BDEV) 302.10p -3.08%
Bellway (BWY) 1,262.00p -3.07% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks dragged lower as US government shutdown looms - US government shutdown looms
- Eurozone CPI
- German retail sales
- Chinese manufacturing data
FTSE 100: -0.81%
DAX: -1.14%
CAC 40: -1.13%
FTSE MIB: -2.04%
IBEX 35: -1.13%
Stoxx 600: -0.77%
European equities opened in the red over concerns of a US government shutdown.
The US faces its first government shutdown in 17 years if it fails to pass a bill on the budget later Monday.
The House of Representatives on Sunday refused to pass a budget unless it involved a delay to Barack Obama's signature healthcare reforms, making the prospect of a shutdown more likely.
If the White House and Republicans fail to reach a last-minute deal, the government will come to screeching halt.
Economists predict it would reduce fourth-quarter economic growth by as much as 1.4 percentage points, depending on the length of a closure.
Turning to the Eurozone, investors will be watching out for the consumer price index which is expected to rise 1.1% year-on-year in September, the same increase as the previous month. Month-on-month it rose 1.2% compared to a 1.3% jump in August, according to consensus.
Separately a report has revealed German retail sales climbed less than forecast by 0.3% in August on the year compared to July when it fell 0.2%. Consensus was for an increase of 0.6%.
Rio Tinto falls on Chinese data
Rio Tinto dropped to lead miners lower after Chinese manufacturing data missed analysts' estimates.
China's manufacturing gauge rose to 50.2 in September, down from 50.1 in August, according to a Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics. Economists predicted a reading of 51.2. A reading above 50 signals expansion.
Glencore Xstrata declined after rumours that it was buying a stake in OZ Minerals were dismissed.
Italian banks UniCredit SpA and Intesa Sanpaolo SpA fell as the nation's benchmark FTSE MIB Index sank amid political turmoil.
Italy is facing international pressure if the current political crisis continues and affects the rest of the Eurozone, Labour Minister Enrico Giovannini said on Sunday.
Silvio Berlusconi took five of his ministers out of the cabinet over the weekend, putting Prime Minister Enrico Letta's government in a difficult position.
Letta and President Giorgio Napolitano are anticipated to seek a new parliamentary majority to support a cabinet and avoid elections. |
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- 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 | | US close: Debt-ceiling fears drive stocks lower - Debt ceiling, Fed taper in focus
- Stocks fall for first week since August
- JC Penny, United Continental drop sharply
Dow Jones: -0.46%
Nasdaq: -0.14%
S&P 500: -0.39%
US stocks finished slightly down on Friday with benchmarks registering their first weekly decline in a month as investors continued to show hesitance to build positions in the face of ongoing budget negotiations in Washington.
Debt-ceiling talks continue to hamper risk appetite on markets ahead of the October 1st deadline, as politicians wrangle over an extension to the current debt-ceiling limit of $16.7tn to avoid a government shutdown.
Treasury Secretary Jacob Lew said that the government would only have enough cash to see it through to October 17th.
According to analyst Mark Zandi from Moody's Analytics, a three-to-four-week shutdown could shave 1.4 percentage points off US economic growth in the fourth quarter. He currently estimates an expansion of 3% without a government closure.
"The equity markets have been remarkably resilient demonstrating overconfidence in the last couple of weeks but as the deadline looms, reality seems to be taking over about the possible negative impact on growth and corporate profitability," said Ronnie Chopra, Head of Strategy at Tradenext.
Conflicting comments from members of the Federal Reserve continue to grab the headlines in the aftermath of the central bank's surprise decision last week not to scale back quantitative easing.
Fed Bank of Richmond President Jeffrey Lacker spoke on Thursday saying that he supported a scaling back of stimulus this month, while Charles Evans from the Chicago Fed said Friday that there is "a decent chance" that a 'taper' might not come until early 2014.
JC Penney slumps on cash raise
JC Penney declined after the retailer started selling 84m shares to raise over $900m in cash. The stock has now dropped by around 30% over the past week.
Concerns over the economy hit cyclical stocks on Friday with banks bearing the brunt of the selling including Goldman Sachs, Wells Fargo, Bank of America and Citigroup finishing in the red.
Airline giant United Continental slumped over 9% after lowering its guidance for third-quarter revenue. Third-quarter unit revenue growth is expected to be one percentage point below previous targets at 2.5-3.5%.
Nektar Therapeutics plummeted after a study of its painkiller NKTR-181 failed to reach targets.
Sporting-goods titan Nike advanced after strong demand for running and basketball shows in North America helped the company to beat fiscal first-quarter profits.
Slightly mixed economic reports
US personal income and spending data for the month of August have come in as expected, rising by 0.4% and 0.3% on the month, respectively.
The University of Michigan's consumer confidence gauge for the month of August has come in at 77.5, down from a reading of 76.8 for the month of July (consensus: 78.0).
S&P 500 - Risers
Cerner Corp. (CERN) $52.61 +8.01%
Nike Inc. (NKE) $73.64 +4.69%
Celgene Corp. (CELG) $154.64 +3.17%
Yahoo! Inc. (YHOO) $33.55 +2.44%
Time Warner Inc. (TWX) $66.20 +2.05%
Microsoft Corp. (MSFT) $33.27 +1.53%
Teradyne Inc. (TER) $16.71 +1.52%
Comcast Corp. (CMCSA) $44.74 +1.45%
Regions Financial Corp. (RF) $9.30 +1.31%
L Brands Inc (LTD) $61.11 +1.28%
S&P 500 - Fallers
J.C. Penney Co. Inc. (JCP) $9.05 -13.15%
International Game Technology (IGT) $19.23 -6.97%
International Paper Co. (IP) $45.44 -3.91%
Cliffs Natural Resources Inc. (CLF) $21.00 -3.80%
United States Steel Corp. (X) $20.44 -3.13%
Air Products & Chemicals Inc. (APD) $107.00 -2.53%
Dow Chemical Co. (DOW) $39.02 -2.43%
PulteGroup Inc. (PHM) $16.57 -2.41%
Accenture Plc (ACN) $74.09 -2.35%
Sprint Nextel Corporation (S) $6.16 -2.22%
Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $33.27 +1.53%
Pfizer Inc. (PFE) $28.88 +1.26%
JP Morgan Chase & Co. (JPM) $52.24 +0.67%
Merck & Co. Inc. (MRK) $47.79 +0.23%
Dow Jones I.A - Fallers
Intel Corp. (INTC) $22.98 -1.84%
Cisco Systems Inc. (CSCO) $23.33 -1.83%
International Business Machines Corp. (IBM) $186.92 -1.73%
Verizon Communications Inc. (VZ) $47.00 -1.41%
Bank of America Corp. (BAC) $13.90 -1.28%
McDonald's Corp. (MCD) $97.12 -1.09%
Procter & Gamble Co. (PG) $77.21 -1.08%
Coca-Cola Co. (KO) $38.40 -0.88%
Alcoa Inc. (AA) $8.20 -0.85%
E.I. du Pont de Nemours and Co. (DD) $59.01 -0.84%
Nasdaq 100 - Risers
Cerner Corp. (CERN) $52.61 +8.01%
Celgene Corp. (CELG) $154.64 +3.17%
Yahoo! Inc. (YHOO) $33.55 +2.44%
Facebook Inc. (FB) $51.24 +1.71%
Microsoft Corp. (MSFT) $33.27 +1.53%
Comcast Corp. (CMCSA) $44.74 +1.45%
Tesla Motors Inc (TSLA) $190.90 +1.20%
Gilead Sciences Inc. (GILD) $63.54 +1.18%
Avago Technologies Ltd. (AVGO) $42.70 +1.02%
Discovery Communications Inc. Class A (DISCA) $84.84 +1.01%
Nasdaq 100 - Fallers
Sears Holdings Corp. (SHLD) $59.05 -2.20%
QUALCOMM Inc. (QCOM) $67.38 -2.16%
Broadcom Corp. (BRCM) $25.84 -2.01%
Akamai Technologies Inc. (AKAM) $51.75 -1.91%
Intel Corp. (INTC) $22.98 -1.84%
Cisco Systems Inc. (CSCO) $23.33 -1.83%
Charter Communications Inc. (CHTR) $133.57 -1.78%
Citrix Systems Inc. (CTXS) $70.80 -1.72%
Green Mountain Coffee Roasters Inc. (GMCR) $74.88 -1.69%
Nuance Communications Inc. (NUAN) $18.87 -1.62% |
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| | Newspaper Round Up | | Monday newspaper round-up: Italy, China manufacturing, Help to Buy Enrico Letta, Italy's centre-left Prime Minister, is seeking urgently parliamentary support for a new government after centre-right leader Silvio Berlusconi pulled his ministers out of their five-month-old coalition, risking a financial market backlash. Mr Letta held crisis talks on Sunday night with Giorgio Napolitano, head of state, who earlier said he would explore all alternatives before using his constitutional powers to dissolve parliament and call new elections. Mr Letta is expected to address parliament early this week, according to the FT.
China's manufacturing growth this month was much weaker than initial estimates, according to an industrial survey that raises concerns about the durability of the economy's rebound. The purchasing managers' index published by HSBC edged up to 50.2 in September from 50.1 in August. While that points to mild expansion for the vast Chinese manufacturing sector, it is well below the preliminary survey result of 51.2 that had been announced just last week, the FT writes.
Banks accounting for about a third of the mortgage market will start offering taxpayer-subsidised mortgages in just over a week after the Government brought forward the launch date of its controversial Help to Buy scheme by three months. On the eve of the Conservative party conference in Manchester, David Cameron said that the state-backed lenders, Royal Bank of Scotland and Lloyds Banking Group, have signed up to the scheme and the launch date has been brought forward from January. Help-to-Buy will initially be available under the NatWest, RBS and Halifax brands but a Tory spokesman said that other banks are expected to take part over time, The Daily Telegraph reports.
The end of the investment drought could be in sight after a survey of top company executives revealed that they are prioritising expansion over cost-cutting for the first time in more than two years. Deloitte asked 116 chief financial officers — from FTSE 100 executives to the bosses of British divisions of big foreign-listed entities — what priorities would affect their plans for the UK and Europe in the next year. Those answering "expansionary strategies" outnumbered others answering defensive strategies by 54%, The Times says.
All of Britain's "Big Four" accountancy firms plan to expand in the coming months to cope with a resurgence of demand for business advice. Between them, the group of four want to hire more than 13,000 people by the summer next year. PwC, Britain's biggest accountant, said that it expected to hire at least 4,000 people by the end of June, split evenly between experienced professionals, graduates and school leavers, The Times reports.
BP is to face the second round of its legal trial over the Gulf of Mexico oil spill this week which could leave it with an $18bn (£12bn) fine as it fights claims that it could have capped the biggest offshore spill in US history earlier. The figure is more than five times the $3.5bn BP has put aside to settle the case which has been hanging over the company since 2010 when the explosion of the Deepwater Horizon oil platform triggered the biggest marine disaster in US history, according to The Daily Telegraph.
Royal Bank of Scotland should split off its US-based Citizens arm, as well as the loss-making Ulster Bank division, to create a new bank that could be privatised more easily, according to analysts at UBS. However, the bank's house broker said the state-backed lender – which last week sealed a deal to spin off more than 300 branches to a consortium supported by the Church of England – should not be carved up into a "good" and "bad" bank, arguing that the benefits would be outweighed by the efforts involved, The Scotsman says. | | |
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