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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 rally on hopes over 11th-hour deal in Washington Stocks swung sharply into positive territory on Wednesday afternoon with the FTSE 100 hitting a four-week high on that US leaders can come to a deal to raise the debt ceiling before tomorrow's deadline.
Despite a weak start, the FTSE 100 finished up 22.48 points at 6,571.59, its highest level since September 20th when it closed at 5,696.43.
Markets surged in afternoon trade after reports that House Speaker John Boehner has agreed to take up a Senate plan which involves reopening the government until January and lifting the borrowing limit until February.
Speaking to Bloomberg, Senior House Republican Kevin Brady said that Boehner will allow the proposal to go to the House floor for a vote "in a very timely way". If in favour, the Senate could pass the bill to President Barack Obama before the end of the day.
Senior Market Analyst Michael Hewson from CMC Markets said the deal remains increasingly "at risk of an overshoot, with only a matter of hours to go, until we step over the red line of October 17th".
Fitch put further pressure on lawmakers last night after placing its prized 'AAA' credit rating for the US on 'negative watch'. The ratings agency said that prolonged negotiations have "cast[ed] doubt over the full faith and credit of the US".
Closer to home, data from the Office for National Statistics this morning showed that UK jobless claims fell by the most in 16 years in September, while the unemployment rate was unchanged at 7.7% in the three months to August.
Hargreaves Lansdown and IMI provide a lift
Financial services firm Hargreaves Lansdown was extending gains after yesterday reporting record levels of assets under administration in the fiscal first quarter.
Engineering group IMI pleased investors with the $1.1bn disposal of its Beverage Dispense and Merchandising divisions and a proposed cash return of £620m. The company also said that third-quarter results were in line with expectations with revenue 3% ahead of last year.
Shares in wireless testing group Anite collapsed by more than a third after the company warned sales and profits were being held back due to slower mobile handset testing activity. The unit would only breakeven in the first half, it said.
Telecoms giant BT was higher after Goldman Sachs upgraded the stock to 'conviction buy'. Serco and Kentz Corp also advanced after both stocks were lifted by HSBC to 'overweight'.
Luxury brand Burberry declined for a second straight day after the surprise exit of long-running chief Angela Ahrendts. Current Chief Creative Officer Christopher Bailey is to be her successor, though some analysts raised concerns about his level of experience. |
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| | FTSE 100 - Risers
Hargreaves Lansdown (HL.) 1,090.00p +4.81%
IMI (IMI) 1,528.00p +1.93%
Standard Chartered (STAN) 1,499.50p +1.90%
Aviva (AV.) 435.40p +1.68%
ITV (ITV) 190.10p +1.66%
Associated British Foods (ABF) 1,995.00p +1.53%
Imperial Tobacco Group (IMT) 2,220.00p +1.42%
Tullow Oil (TLW) 1,001.00p +1.42%
Barclays (BARC) 283.65p +1.36%
Vodafone Group (VOD) 225.00p +1.35%
FTSE 100 - Fallers
Schroders (SDR) 2,568.00p -2.80%
Fresnillo (FRES) 937.50p -1.63%
Glencore Xstrata (GLEN) 331.20p -1.43%
SSE (SSE) 1,423.00p -1.39%
Reckitt Benckiser Group (RB.) 4,309.00p -1.26%
Croda International (CRDA) 2,505.00p -1.22%
Rolls-Royce Holdings (RR.) 1,102.00p -1.17%
Rexam (REX) 481.00p -1.07%
William Hill (WMH) 419.70p -0.94%
Weir Group (WEIR) 2,338.00p -0.81%
FTSE 250 - Risers
Senior (SNR) 278.30p +5.06%
Mitie Group (MTO) 312.90p +4.65%
Micro Focus International (MCRO) 798.00p +3.91%
Kentz Corporation Ltd. (KENZ) 535.00p +3.48%
Savills (SVS) 642.00p +3.38%
F&C Asset Management (FCAM) 101.40p +3.21%
Balfour Beatty (BBY) 283.40p +3.05%
Pace (PIC) 294.00p +2.94%
Cable & Wireless Communications (CWC) 42.16p +2.85%
Synthomer (SYNT) 249.00p +2.85%
FTSE 250 - Fallers
Kenmare Resources (KMR) 23.00p -6.69%
Homeserve (HSV) 229.60p -5.36%
Polymetal International (POLY) 525.00p -4.28%
Carpetright (CPR) 620.00p -4.25%
Rank Group (RNK) 154.00p -3.14%
Kazakhmys (KAZ) 260.60p -2.80%
Bwin . party Digital Entertainment (BPTY) 116.60p -2.59%
Provident Financial (PFG) 1,615.00p -2.48%
Spirent Communications (SPT) 124.30p -2.28%
Ted Baker (TED) 1,669.00p -2.23% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks edge higher as US nears debt-ceiling deal FTSE 100: 0.34%
DAX: 0.47%
CAC 40: -0.29%
FTSE MIB: 1.45%
IBEX 35: 0.75%
Stoxx 600: 0.23%
European stocks were broadly higher as the US began a last-ditch effort to thrash out a deal on raising the country’s borrowing limit.
Fitch Ratings said the US was heading for a possible downgrade from its AAA credit rating due to the stalemate.
However, as Alpari Market Analyst Craig Erlam pointed out: “Clearly investors are not taking that threat seriously right now, which they could pay the price for further down the road I’d say contributing to this false sense of security is the Fed’s bond buying programme, with investors confident that once a deal is done, equity markets will continue their liquidity fuelled move higher.”
UK jobs data, Eurozone CPI
The UK unemployment rate held steady in the three months to August at 7.7%, in line with forecasts, the Office for National Statistics revealed.
The Bank of England has vowed to maintain interest rates at the current low of 0.5% until the unemployment rate falls below 7%, which is not expected for another three years.
Wednesday’s employment data also showed jobless claims fell by 41,700 in September, the most in 16 years and beating expectations for a drop of 25,000.
August was revised to show a decline of 41,600, compared to an initially reported fall of 32,600.
Eurozone inflation remained unchanged at 1.1% in September, as predicted – its lowest in three and a half years - the European Union’s statistics office Eurostat revealed.
Europe car sales rose 5.5% to 1.19m vehicles in September, according to the European Automobile Manufacturers Association.
Hargreaves Lansdown, Danone
Hargreaves Lansdown was leading the FTSE 100 today after reports it gained 20,000 new clients on the back of the Royal Mail flotation.
Danone declined after lowering its full-year targets as the fall-out from a recall of baby-milk products in Asia had a bigger impact than expected.
Louis Vuitton Moet Hennessy’s shares slumped after reporting a slowdown in third-quarter sales growth.
IMI rallied after the British engineering company agreed to sell its Beverage Dispense and Merchandising divisions to Marmon Group.
Video game developer Ubisoft retreated after reducing its full-year sales expectations due to the delay of The Crew and Watch Dogs, two of its next generation titles.
Publicis tumbled after the French ad group reported easing of third quarter sales growth because of a temporary slowdown in China, economic difficulties that hurt investment in India and underperformance in Russia.
Brent crude falls
Brent crude futures were down $0.435 to $110.440.
The euro rose 0.28% to $1.3486 |
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| | US Market Report | | US stocks rose as Senate leaders neared a deal to raise the debt ceiling and fully re-open the government.
Lawmakers in the world’s biggest economy are rushing to hammer down an agreement before the government reaches its $16.7trn borrowing limit tomorrow.
The proposed deal, being negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell, would fund federal agencies through January 15th and extend the debt ceiling through February 7th. The deal would also include a December 15th deadline for a budget conference report. Speaker John Boehner is considering letting the House take the initial vote today on the proposal.
Fitch Ratings said the US was heading for a possible downgrade from its AAA credit rating, citing the stalemate in Washington.
“The deadline on the debt ceiling is fast approaching, the Republicans failed on two occasions to get the House to vote on an alternative bill, the US AAA rating with Fitch is under threat as they put them on negative watch, and yet investors are confident that a deal will be reached in time,” Craig Erlam, Market Analyst at Alpari pointed out.
“Well, you’d certainly be forgiven for having that impression when you see US index futures trading slightly higher across the board. We are still seeing signs that investors are acting with an element of caution, with yields on one-month Treasuries continuing to edge higher, but that same caution isn’t being seen in equity markets.”
In other US news, confidence among US homebuilders fell more than forecast in October to a four-month low.
The National Association of Home Builders/Wells Fargo index of builder sentiment decreased to 55 this month from a revised 57 in September. Economists had predicted a decline to 57. Readings above 50 signal more confidence among builders.
Rising interest rates and the budget battle hurt progress in the housing market, the report revealed.
On the company front, Yahoo advanced after reporting third quarter profit that topped analysts’ estimates.
Intel Corp. declined after the company warned of delays in producing a new line of processors.
The 10-year note yield was up one basis point at 2.74%.
West Texas Intermediate crude futures rose $0.426 to $110.430 per barrel on the NYMEX. |
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| | Broker Tips | | Anite: Northland Capital reduces target from 160p to 120p, while staying with its buy recommendation. Panmure Gordon cuts target from 177p to 142p and keeps a buy recommendation. Jefferies takes target from 160p to 110p, while leaving its buy recommendation unchanged. Canaccord Genuity reduces target from 180p to 106p downgrading to hold. FinnCap revises target from 180p to 100p and maintains a buy recommendation.
Bellway: Deutsche Bank moves target from 1581p to 1592p and keeps a hold recommendation. Panmure Gordon raises target from 1396p to 1466p maintaining its buy recommendation.
BT Group: Goldman Sachs takes target from 400p to 490p upgrading to strong buy.
Burberry Group: Cantor Fitzgerald lowers target from 1515p to 1500p and stays with its hold recommendation.
Cable & Wireless Communications: Goldman Sachs shifts target from 45p to 50p and maintains its neutral rating.
Gooch & Housego: N+1 Singer raises target from 515p to 630p upgrading to buy.
Hargreaves Lansdown: Jefferies ups target from 1050p to 1150p retaining a buy recommendation.
Kentz Corporation: HSBC upgrades to overweight with a target of 615p.
Pearson: Societe Generale upgrades to hold with a target of 1290p.
Petropavlovsk: Nomura takes target from 55p to 70p, while staying with its reduce rating.
Randgold Resources: Nomura raises target from 4370p to 4600p keeping a neutral rating.
Rio Tinto: Citi increases target from 3800p to 3900p and maintains its buy recommendation.
SDL: Citi reduces target from 415p to 320p, while leaving its buy recommendation unchanged. Panmure Gordon lowers target from 276p to 270p retaining a hold recommendation. Canaccord Genuity cuts target from 308p to 266p and stays with its hold recommendation.
Serco Group: HSBC upgrades to overweight with a target of 635p.
Shanks Group: Jefferies ups target from 84p to 100p and retains a hold recommendation. Credit Suisse shifts target from 105p to 110p leaving its outperform rating unaltered.
Smiths Group: HSBC raises target from 1400p to 1500p and reiterates its neutral rating.
Smiths News: Liberum Capital moves target from 203p to 220p keeping a buy recommendation.
Talk Talk Telecom: Goldman Sachs ups target from 290p to 310p staying with its buy recommendation.
UBM: Deutsche Bank cuts target from 800p to 750p and maintains a hold recommendation.
Vertu Motors: Liberum Capital initiates with a target of 69p and a buy recommendation. | | |
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