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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 finish flat as markets digest US shutdown, data Stocks in the UK finished broadly flat on Tuesday as investors gave a subdued reaction to the news of the first partial US government shutdown in 17 years.
Indices across Europe and the States however edged higher today, with London's FTSE 100 bucking the trend given some sharp falls in the heavyweight mining sector on the back of falling metals prices.
Manufacturing figures across the globe also came in mixed today with activity growth picking up in the US, remaining stable in the Eurozone, and slowing down in the UK and China.
The FTSE 100 finished just 2.21 points lower at 6,460.01, marking a fresh one-month low; the last time the index closed lower was on August 30th, when it ended the session at 6,412.93.
Brenda Kelly, Senior Market Strategist at IG, said that downside was limited today "since the congressional capers and the potentially negative effects on the health of the US economy are not exactly conducive to tapering of quantitative easing".
Meanwhile, concerns over politics in Italy eased temporarily as Prime Minister Enrico Letta rallies up support ahead of a confidence vote on Wednesday. Angelino Alfano, the secretary of Silvio Berlusconi's PdL, said today that the centre-right party should back Letta in tomorrow's vote.
FTSE 100: Miners, Unilever provide a drag
Precious metals producers Fresnillo and Randgold were the worst performing stocks on the in afternoon trade as a political stalemate in the US prompted a reduction in risk appetite. Falling commodity prices and gloomy comments on gold from Fitch were also weighing on sentiment, as the ratings agency said that a rebound in gold prices is unlikely with the unwinding of quantitative easing.
Anglo American, Glencore Xstrata and Rio Tinto were all also firmly lower.
Consumer products group Unilever was also a heavy faller after markets reacted to a surprise trading update after the close last night which said that the company witnessed a weakening in the market growth of many emerging countries in the third quarter. Unilever is now guiding to organic growth of just 3-3.5%, well below analysts' forecasts.
Other consumer staples stocks - amongst which are some who also have substantial exposure to emergng markets - including SABMiller, Diageo, Reckitt Benckiser, Coca-Cola HBC and Imperial Tobacco were also lower today.
Budget airline easyJet was a high riser today after analysts at Citigroup said they expect full-year profits to be "near the upper-end of previous guidance". The company said in July that pre-tax profit would be between £450m to £480m; Citi's forecast is £474m.
Plumbers merchant Wolseley gained after saying it experienced a year of "solid progress in varied markets" as it saw headline profits more than double in the year to July 31st due to lower impairments and exceptional items. The company also raised its dividend by a tenth and revealed a £300m capital return to shareholders via a special dividend and share consolidatio
Banking peers Barclays and RBS were in demand, along with other financials including Aviva, Prudential and London Stock Exchange.
FTSE 250: ITE Group boosted by positive update
Conference and exhibition organiser ITE Group was a strong riser after it said it expects to reveal stronger annual revenue after positive trading conditions in most of its overseas markets during the fourth quarter.
Also on the up was engineering giant Kentz Corporation; the group has scored a contract to provide commissioning and start-up services to Bantrel Co.
Property investment and development business St. Modwen Properties rose after it said it had continued to perform strongly since the half year buoyed by a strengthening housing market. The company also said it remains confident of hitting full-year targets. |
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| | FTSE 100 - Fallers
Fresnillo (FRES) 924.50p -4.98%
Aggreko (AGK) 1,541.00p -3.93%
Unilever (ULVR) 2,358.00p -3.36%
SABMiller (SAB) 3,055.00p -2.82%
Randgold Resources Ltd. (RRS) 4,338.00p -2.54%
Anglo American (AAL) 1,484.50p -2.21%
British American Tobacco (BATS) 3,204.00p -2.21%
Imperial Tobacco Group (IMT) 2,237.00p -2.19%
Glencore Xstrata (GLEN) 330.50p -1.84%
Coca-Cola HBC AG (CDI) (CCH) 1,825.00p -1.35%
FTSE 250 - Risers
Daejan Holdings (DJAN) 4,200.00p +7.28%
ITE Group (ITE) 289.00p +6.33%
Workspace Group (WKP) 481.00p +5.95%
Oxford Instruments (OXIG) 1,330.00p +5.56%
Countrywide (CWD) 550.00p +4.76%
Regus (RGU) 190.60p +4.73%
Big Yellow Group (BYG) 460.00p +4.55%
Enterprise Inns (ETI) 151.00p +4.50%
Grainger (GRI) 181.00p +3.55%
TalkTalk Telecom Group (TALK) 250.00p +3.48%
FTSE 250 - Fallers
African Barrick Gold (ABG) 154.50p -5.79%
Polymetal International (POLY) 626.50p -4.20%
Hochschild Mining (HOC) 174.50p -3.70%
Kazakhmys (KAZ) 256.70p -3.50%
Perform Group (PER) 540.50p -3.48%
BBA Aviation (BBA) 295.90p -2.98%
Evraz (EVR) 125.00p -2.34%
De La Rue (DLAR) 972.50p -2.11%
Tullett Prebon (TLPR) 339.00p -2.08%
F&C Asset Management (FCAM) 96.30p -1.93% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Markets upbeat in face of US government shutdown FTSE 100: -0.03%
DAX: 1.10%
CAC 40: 1.28%
FTSE MIB: 3.11%
IBEX 35: 1.69%
Stoxx 600: 0.77%
European stocks proved resilient against news of a partial US government shutdown on Tuesday.
The US government came to a screeching halt for the first time in 17 years after Congress failed to pass a budget bill by the Monday midnight deadline. Congress was unable to break the political statement as they continued to disagree over President Barack Obama’s highly controversial healthcare reform. The shutdown could potentially put up to one million workers on unpaid leave, close national parks and halt some services.
The closure could also cost the US at least $300m a day in lost economic output at the start, according to IHS Inc.. While fears of a shutdown sent stocks spiralling downwards on Monday, the market appeared more upbeat in the aftermath on Tuesday as economists predicted a budget deal in coming days.
ETX Capital Market Strategist Ishaq Siddiqi said “investors are not fretting” as demonstrated by the upward movement of stocks today.
“See, even though economic growth may get a knocking on the back of this, for markets addicted to the Federal Reserve’s liquidity programme, quantitative easing, this shutdown has just bought risk-junkie investors some precious time to enjoy the current mammoth of easy Fed cash still floating around in the global money markets,” he said.
“The Fed intended to taper quantitative easing, announcing their exit strategy during the summer of 2013, gearing the market up for a withdrawal only to not executing it last month when investors were almost convinced tapering was on the cards.”
Italian PM faces showdown over Berlusconi crisis
Prime Minister Enrico Letta has been trying to rally up support ahead of a meeting in Parliament on Wednesday as centre-right leader Silvio Berlusconi works to topple the ruling coalition.
Berlusconi sent the government into disarray after ordering the resignation of his People of Freedom party ministers from the coalition over the weekend.
Letta's survival appears to depend on some 20 senators from Berlusconi's party who are displeased with his shock decision.
Sources in Letta's center-left Democratic Party told Reuters he was yet to decide whether to call a formal vote of confidence in parliament on Wednesday or hand in his resignation to President Giorgio Napolitano if he feels he cannot win.
Eurozone manufacturing, unemployment
Eurozone manufacturing activity growth eased in September, according to a survey on Tuesday. Markit Economics said its Eurozone factory index fell to 51.1 in September from 56.7 in August. However, it was in line with forecasts and exceeded the 50 reading the signals expansion.
The German manufacturing purchasing manager’s index (PMI) was at 51.1 in September, down a tad from August’s 51.3 reading and below expectations for the reading to remain unchanged.
Germany’s jobless rate rose slightly to 6.9% in September from 6.8% the prior month. Economists predicted the rate to hold steady.
The Eurozone unemployment rate was flat in August at 12%, beating forecasts for a rise to 12.1%.
Telecom Italia, Vestas
Telecom Italia jumped after Goldman Sachs reiterated a ‘buy’ rating on the shares.
Vestas Wind Systems rallied after Bank of America Corp. raised its price forecast on the Danish maker of wind turbines to 180 kroner from 150 kroner, saying the company will pay off almost all its debt earlier than initially expected.
Wolseley advanced after the distributor of plumbing and heating products posted full-year earnings that beat analysts’ estimates.
Unilever dropped after the world’s second-largest consumer-goods maker said sales growth slowed in the third quarter.
A gauge of commodity producers slid as the price of gold and silver declined. Mining companies Fresnillo and Randgold Resources were among the fallers.
Other asset classes mixed
The euro was up 0.13% to the 1.3544 US dollar.
Brent crude futures were down $1.271 to $101.010 per barrel on the ICE. |
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| | US Market Report | | October Fed taper now off the table, some say US stocks were advancing by midday as investors weighed a partial US government shutdown and as manufacturing in the world’s biggest economy grew more than expected.
Significantly, in the afternoon some economists – such as ex-MPC member David Blanchflower – argued that an October start to Fed tapering may now be off the table.
Investors appeared to shrug off news of the first government shutdown in 17 years after Congress failed to meet its Monday midnight deadline for passing the budget bill.
The shutdown will potentially put up to one million workers on unpaid leave, close national parks and halt some services.
Congress was unable to break a political stalemate as they continued to disagree over President Barack Obama’s signature healthcare reform.
House Republicans floated a late offer to break the impasse but Democrats rejected the idea.
The closure of the government will cost the US at least $300m a day in lost economic output at the start, according to IHS Inc..
However, ETX Capital Market Strategist Ishaq Siddiqi said “investors are not fretting” as demonstrated by the upward movement of stocks today.
He said the positive reaction may come from the likehood that the Federal Reserve will push back a decision to start scaling back its $85bn per month in bond purchases.
“See, even though economic growth may get a knocking on the back of this, for markets addicted to the Federal Reserve’s liquidity programme - quantitative easing - this shutdown has just bought risk-junkie investors some precious time to enjoy the current mammoth of easy Fed cash still floating around in the global money markets,” he said.
“The Fed intended to taper quantitative easing, announcing their exit strategy during the summer of 2013, gearing the market up for a withdrawal only to not executing it last month when investors were almost convinced tapering was on the cards.”
The shutdown meant that this afternoon´s construction spending data was not released.
If the closure continues until the end of the week then the non-farm payrolls report may not be published either.
One report that made it to publication, however, was the Institute for Supply Management’s manufacturing sector purchasing managers´ index for September. The index rose to 56.2, the strongest since April 2011, from 55.7 a month earlier.
Economists had predicted a reading of 55. A reading above 50 signals expansion.
Merck to lay-off thousands
In company news, pharmaceutical giant Merck, the second-biggest US drugmaker by sales, rose after saying it will fire 8,500 workers following the delay of new medicines by US regulators.
Walgreen gained after the US drugstore retailer said fiscal fourth-quarter profit climbed to $657m in the quarter ended August 31st from $353m.
H&R Block Inc. jumped after Morgan Stanley raised its recommendation on the shares to ‘overweight’.
Analysts at Citi upped their target on Yahoo stock to $39 per share.
Crude futures off
Ten-year US Treasury yields were still up 2 basis points to 2.63%.
Front month West Texas crude futures were down by $0.95 to the $101.350 per barrel level on the NYMEX.
S&P 500 - Risers
Sears Holdings Corp. (SHLD) $63.82 +7.28%
Walgreen Co. (WAG) $56.15 +4.37%
First Solar Inc. (FSLR) $41.70 +3.71%
Netflix Inc. (NFLX) $320.64 +3.70%
Pioneer Natural Resources Co. (PXD) $195.33 +3.46%
Cliffs Natural Resources Inc. (CLF) $21.12 +3.02%
H&R Block Inc. (HRB) $27.47 +3.02%
TripAdvisor Inc. (TRIP) $78.08 +2.95%
Goodyear Tire & Rubber Co. (GT) $23.09 +2.85%
Helmerich & Payne Inc. (HP) $70.91 +2.84%
S&P 500 - Fallers
Newmont Mining Corp. (NEM) $26.94 -4.13%
Paychex Inc. (PAYX) $39.74 -2.23%
Tesoro Corp. (TSO) $43.29 -1.57%
PVH Corp. (PVH) $116.93 -1.48%
Autodesk Inc. (ADSK) $40.68 -1.19%
Crown Castle International (CCI) $72.22 -1.11%
Carnival Corp. (CCL) $32.29 -1.08%
Discovery Communications Inc. Class A (DISCA) $83.65 -0.91%
Boston Scientific Corp. (BSX) $11.65 -0.81%
Dr Pepper Snapple Group Inc. (DPS) $44.47 -0.78%
Dow Jones I.A - Risers
Merck & Co. Inc. (MRK) $48.75 +2.40%Unitedhealth Group Inc. (UNH) $72.75 +1.59%
General Electric Co. (GE) $24.17 +1.15%
Procter & Gamble Co. (PG) $76.46 +1.15%
Hewlett-Packard Co. (HPQ) $21.21 +1.05%
Walt Disney Co. (DIS) $65.06 +0.88%
Caterpillar Inc. (CAT) $84.09 +0.83%
AT&T Inc. (T) $34.10 +0.83%
Alcoa Inc. (AA) $8.18 +0.74%
Pfizer Inc. (PFE) $28.92 +0.70%
Dow Jones I.A - Fallers
United Technologies Corp. (UTX) $107.03 -0.74%
Wal-Mart Stores Inc. (WMT) $73.47 -0.66%
Cisco Systems Inc. (CSCO) $23.39 -0.17%
Chevron Corp. (CVX) $121.49 -0.01%
Nasdaq 100 - Risers
Sears Holdings Corp. (SHLD) $63.82 +7.28%
Netflix Inc. (NFLX) $320.64 +3.70%
Yahoo! Inc. (YHOO) $34.10 +2.79%
F5 Networks Inc. (FFIV) $87.91 +2.45%
Cerner Corp. (CERN) $53.77 +2.32%
Mylan Inc. (MYL) $39.03 +2.25%
Amgen Inc. (AMGN) $114.31 +2.13%
Fastenal Co. (FAST) $51.31 +2.07%
Apple Inc. (AAPL) $486.12 +1.97%
Biogen Idec Inc. (BIIB) $245.15 +1.82%
Nasdaq 100 - Fallers
Paychex Inc. (PAYX) $39.74 -2.23%
Randgold Resources Ltd. Ads (GOLD) $70.23 -1.82%
Mondelez International Inc. (MDLZ) $30.91 -1.64%
Autodesk Inc. (ADSK) $40.68 -1.19%
Sba Communications Corp. (SBAC) $79.55 -1.13%
Discovery Communications Inc. Class A (DISCA) $83.65 -0.91%
Symantec Corp. (SYMC) $24.58 -0.67%
Tesla Motors Inc (TSLA) $192.31 -0.55%
Intuitive Surgical Inc. (ISRG) $374.95 -0.35%
Applied Materials Inc. (AMAT) $17.48 -0.29% |
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| | Broker Tips | | African Minerals: Credit Suisse reduces target from 350p to 280p and downgrades to neutral.
British Land: Societe Generale cuts target from 670p to 620p and downgrades to hold.
Derwent London: Societe Generale reduces target from 2610p to 2470p downgrading to hold.
Faroe Petroleum: RBC Capital lowers target from 200p to 190p and keeps an outperform rating.
Genus: N+1 Singer takes target from 1348p to 1357p and reiterates a hold recommendation.
Great Portland Estates: Societe Generale cuts target from 600p to 550p and keeps a hold recommendation.
Hays: Deutsche Bank moves target from 90p to 105p keeping a hold recommendation.
HellermannTyton: Canaccord Genuity ps target from 280p to 295p and reiterates a buy recommendation.
Innovation Group: Investec shifts target from 33p to 38p maintaining its buy recommendation.
Intu Properties: Societe Generale downgrades to sell with a target of 290p.
Innovation Group: Investec reduces target from 520p to 465p, while staying with its buy recommendation.
Iomart: Canaccord Genuity downgrades from buy to hold with an unchanged target of 300p.
Kingfisher: Jefferies ups target from 400p to 440p and retains a buy recommendation.
Ladbrokers: Nomura cuts target from 165p to 145p leaving its reduce rating unchanged.
Land Securities: Societe Generale lowers target from 1000p to 960p and maintains a hold recommendation.
New World Resources: JP Morgan moves target from 50p to 59p, while maintaining its underweight rating.
Pure Wafer: WH Ireland shifts target from 11p to 11.50p and retains a buy recommendation.
Renew Holdings: Numis raises target from 148p to 185p and keeps a buy recommendation.
Segro: Societe Generale reduces target from 340p to 320p downgrading to hold.
Walker Greenbank: WH Ireland increases target from 155p to 185p and stays with a buy recommendation | | |
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