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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 rise as debt talks continue in Washington Stocks finished at a three-week high on Tuesday on hopes that politicians Stateside can come to an agreement to avert a default with just two days to go before the government hits its borrowing limit.
London’s FTSE 100 benchmark index finished 41.46 points higher at 6,549; the last time it has closed higher was on September 24th when it finished at 6,571.46.
House Speaker John Boehner said that lawmakers were “working […] on a way forward”, but added that “there have been no decisions about what exactly we will do”.
According to various reports, the proposal under discussion includes reopening the government to January and suspending the debt limit through to February 2014.
Democrat Senate Majority Leader Harry Reid said on Monday he was “very optimistic” that an agreement will be made ahead of the October 17th deadline following lengthy discussions with Republican counterpart Mitch McConnell.
However, Reid warned this afternoon that credit-rating agencies could downgrade US debt “as soon as tonight” if a bill is not passed to raise the limit.
US markets opened cautiously in New York today after banking heavyweight Citigroup missed consensus forecasts with third-quarter earnings. The bank reported a third-quarter profit of $1 per share ($1.02 on an adjusted basis), up from just 15 cents the year before but under the $1.05 forecast.
FTSE 100: Burberry slides after surprise CEO exit
The share price of high-end luxury brand Burberry dropped to a three-month low after the surprise exit of Chief Executive Officer Angela Ahrendts and appointment of Chief Creative Officer Christopher Bailey. With Bailey also retaining his current position, the sole custody of both roles has “led to concerns over the burden placed on one pair of shoulders, especially given his lack of experience for at that level”, said Toby Morris, Senior Sales Trader at CMC Markets.
The news came as the company reported 14% growth in underlying sales in the first half, helped by strong demand from Chinese customers, and raised its profit guidance for the period.
Leading the upside were the miners as risk appetite returned to the market on hopes over a fiscal deal in the US. Rio Tinto led the risers after enjoying a good third quarter of production, having produced and shipped a record level of iron ore thanks to its new infrastructure in Western Australia.
Anglo American was higher despite revealing that a pending regulatory application could restrict access one of its subsidiary’s Sishen mine in South Africa.
Sector peers Antofagasta, Fresnillo and BHP Billiton were also making decent gains this morning.
Hargreaves Lansdown rose after achieving record assets under administration (AuA) in the first quarter of fiscal year 2014. The financial services company reported AuA of £39.3bn in the three months to September 30th, up 7.9% from the previous quarter’s £36.4bn. |
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| | FTSE 100 - Risers
Rio Tinto (RIO) 3,215.00p +4.25%
Petrofac Ltd. (PFC) 1,410.00p +3.68%
Aberdeen Asset Management (ADN) 410.30p +3.38%
ARM Holdings (ARM) 1,018.00p +3.19%
WPP (WPP) 1,281.00p +3.14%
Hargreaves Lansdown (HL.) 1,040.00p +3.07%
Anglo American (AAL) 1,569.00p +2.99%
Old Mutual (OML) 196.10p +2.67%
Centrica (CNA) 367.90p +2.56%
Antofagasta (ANTO) 888.50p +2.48%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,464.00p -7.63%
Capita (CPI) 970.50p -3.62%
Tullow Oil (TLW) 987.00p -1.30%
Sage Group (SGE) 320.00p -1.14%
BAE Systems (BA.) 439.20p -1.04%
Imperial Tobacco Group (IMT) 2,189.00p -0.99%
Diageo (DGE) 1,935.00p -0.95%
Rolls-Royce Holdings (RR.) 1,115.00p -0.89%
RSA Insurance Group (RSA) 118.50p -0.67%
Admiral Group (ADM) 1,223.00p -0.49%
FTSE 250 - Risers
Man Group (EMG) 83.70p +6.35%
Kazakhmys (KAZ) 268.10p +5.05%
Ferrexpo (FXPO) 194.10p +4.92%
Bellway (BWY) 1,453.00p +4.83%
Rightmove (RMV) 2,524.00p +4.77%
Senior (SNR) 264.90p +4.75%
African Barrick Gold (ABG) 154.10p +4.26%
Pace (PIC) 285.60p +4.04%
Imagination Technologies Group (IMG) 283.50p +3.69%
CSR (CSR) 536.00p +3.67%
FTSE 250 - Fallers
Edinburgh Inv Trust (EDIN) 572.50p -4.98%
Homeserve (HSV) 242.60p -4.49%
Serco Group (SRP) 516.50p -3.91%
Oxford Instruments (OXIG) 1,355.00p -3.35%
Ladbrokes (LAD) 185.50p -3.18%
Drax Group (DRX) 639.00p -3.03%
Rentokil Initial (RTO) 107.90p -2.88%
Renishaw (RSW) 1,692.00p -2.76%
Dialight (DIA) 1,175.00p -2.57%
Kenmare Resources (KMR) 24.65p -2.38% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks rally as debt ceiling talks make headway FTSE 100: 0.49%
DAX: 0.82%
CAC 40: 0.64%
FTSE MIB: 0.35%
IBEX 35: 0.76%
Stoxx 600: 0.70%
European stocks rose as the US government came closer to a deal on the debt ceiling.
UK inflation holds steady
The UK inflation rate remained unchanged in September as a fall in both petrol and diesel prices was offset by rising air fares, the Office for National Statistics revealed.
The consumer price index came in at 2.7% last month, compared to forecasts for a drop to 2.6%.
The Bank of England is targeting an inflation rate of 2% but is putting off lifting interest rates to control inflation until the unemployment rate falls.
“We expect CPI inflation to drift slowly downwards to the 2% target, making it increasingly unlikely that either of the price stability knock-outs under the Monetary Policy Committee’s forward guidance policy will be triggered,” Barclays said.
In Germany, economic sentiment rose unexpectedly in October to the highest level since April 2010, according to a ZEW survey.
The investor confidence index climbed to 52.8 points this month from 49.6 last month, beating forecasts for the reading to remain unchanged.
The report comes as the Angela Merkel holds talks to form a coalition after failing to win enough votes at last month's federal election.
Rio Tinto, Burberry
Rio Tinto gained after reporting a 1% year-on-year increase in third quarter iron ore output to 53.4m metric tonnes.
Burberry declined after announcing Chief Executive Officer Angela Ahrendts will leave to join Apple next year.
Ashtead rallied after JP Morgan raised its rating on the shares to ‘overweight’ from ‘neutral’, citing a prediction for an increase in earnings in fiscal year 2016.
Schindler Holding slumped after the Swiss elevator maker said operating profit fell 5.7% to 682m francs in the nine months through September from a year earlier and cut its forecast for the year.
Man Group advanced after UBS added the hedge-fund manager to its most-preferred list on the back of strong performance of its GLG Partners unit.
Advertising giant WPP edged higher after agreeing to buy digital-ad agency IM2.0 through its VML operating company.
Other asset classes decline
The euro fell 0.43% to $1.3503.
Brent crude futures slipped $0.653 to $110.320 per barrel on the ICE. |
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| | US Market Report | | Citi leads markets lower as debt deal remains elusive Dow Jones: -0.37%
Nasdaq: -0.09%
S&P 500: -0.24%
US markets opened slightly lower on Tuesday with disappointing results from banking heavyweight Citigroup weighing on sentiment as investors wait cautiously for a deal over the debt ceiling in Washington.
The S&P 500 was pulling back after hitting a three-week high of 1,710 on Monday, not far off its record close of 1,725.52 reached on September 18th.
Stocks rallied the day before after the Democrat’s Senate Majority Leader Harry Reid said he made “tremendous progress” on talks with his Republican counterpart, Mitch McConnell, hinting that an agreement could be reached as soon as today.
The proposal under discussion would end the partial government shutdown and increase the debt ceiling by enough to cover the nation's borrowing needs at least through mid-February 2014.
However, according to Financial Sales Trader Alex Conroy from Spreadex, “it has just come to light […] that the Republicans disapprove of the spending provision in the proposed senates plan”.
While the economic data calendar continues to be on the thin side in light of the ongoing shutdown, the Empire State manufacturing index was putting downwards pressure on stocks today, falling from 6.3 to 1.5 in October, well below the consensus forecast for a rise to 7.0.
Citi falls after missing Q3 estimates
Citigroup reported third-quarter earnings that missed consensus estimates, weighing on the stock in morning trade. The bank reported a third-quarter profit of $1 per share ($1.02 on an adjusted basis), up from just 15 cents the year before but under the $1.05 forecast. Revenues of $18.2bn (excluding an accounting charge) came up short of the $18.58bn estimate.
Other banks including Goldman Sachs, JPMorgan Chase & Co, Wells Fargo and Bank of America were making gains today.
Apple gained following news Angela Ahrendts will step down as Chief Executive Officer of Burberry to head the tech giant’s retail operations.
Microsoft rallied after Jefferies upgraded the software company to ‘buy’ from ‘hold’ and raised its target to $42 from $33.
Data solutions firm Teradata declined after the company reported third-quarter earnings that missed forecasts. |
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| | Broker Tips | | Petrofac, AMEC, Ashtead Citigroup has labelled Petrofac as one of its most preferred stocks among oil services names in the UK ahead of the sector’s third-quarter reporting season.
Citi said that Petrofac is exposed to defensive energy investments, such as the Middle East, the Commonwealth of Independent States and Integrated Energy Services. The company’s backlog is up over 50% year-on-year and the bank sees scope for this to further increase over the next six months.
AMEC however is the least preferred oil services name, given that it trades at a 10% premium to Petrofac on 2015 estimates.
Equipment rental firm Ashtead was making gains after JPMorgan Cazenove upgraded its rating for the stock from ‘neutral’ to ‘overweight’, saying that recent falls in the share price have been overdone.
JPMorgan said Ashtead’s US business, Sunbelt, has continually “outpaced” the market over the past two years, delivering significant growth without any material pick-up in end markets. “We believe that, as market conditions recover, the trend of larger players taking market share should continue allowing Sunbelt to continue this outperformance,” it said. | | |
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