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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 close: Markets rise for eighth straight day, but RBS sinks The FTSE 100 hit a two-and-a-half-month high on Monday ahead of the eagerly anticipated US jobs report as markets managed to offset some heavy falls from heavyweight bank RBS.
The UK lender dropped nearly 5% today after Chancellor George Osborne was quoted as saying that a decision over a 'good bank-bad bank' split will come within a few weeks.
London’s benchmark index managed to close in positive territory for the eight consecutive day, finishing 31.62 points higher at 6,654.2 today. The FTSE 100 has not closed above this level since August 1st when it finished the session at 6,681.98.
As a backlog of US data begins to unwind following the US government shutdown, all eyes will be on delayed release of the September jobs report on Tuesday afternoon. However, the fact that the data is now two weeks old means that it will likely carry less weight than usual.
Nevertheless, consensus forecasts are pointing to a 180,000 increase in US non-farm payrolls last month, higher than the 169,000 gain seen in August, while the unemployment rate is expected to have remained unchanged at 7.3%.
Markets are hoping that the prolonged shutdown could prompt the Federal Reserve to put off tapering its stimulus programme until next year, given that the closure is likely to have weighed on growth in the fourth quarter.
Matt Basi, Head of UK Sales Trading at CMC Markets, said: “All but the most hawkish commentators have almost entirely priced out any prospect of Fed tapering in 2013, taking the edge off US data announcements to an extent.”
Defence stocks rise, RBS sinks
QinetiQ, the defence technology and security firm, was a high riser on weekend reports that it is putting its US division up for sale. The Sunday Times reported that QinetiQ sent sale documents to potential suitors last week.
Meanwhile, aerospace and defence engineer Senior edged higher after strong order books at Airbus and Boeing helped it keep profits on track since early July.
BAE Systems and Rolls-Royce were making gains after analysts at Citigroup said that they have a "positive outlook" on civil aerospace due to a ramp-up of new aircraft production and rising production of legacy aircraft.
While the bank said it is still cautious on the wider defence sector, it said that the recent debt-ceiling deal has "removed some immediate risks overhanging US defence". This helped boost the share prices of Babcock and Smiths Group.
Leading the downside was part-nationalised lender RBS. Nomura kept its ‘reduce’ rating for the stock today, saying it believes minority shareholders have "much to lose" from an unfavourable outcome of the 'good bank-bad bank' review. However, Shore Capital said it understood that any break-up may need approval from minority investors, giving them the chance to block anything that damages their interests.
Banking peer Barclays was also lower today, though HSBC, Standard Chartered and Lloyds all finished higher.
London-based Charterhouse approached banks and its investors over financing a possible £1bn deal to buy G4S’ cash-solutions business unit, according to a report on Bloomberg today, sending the stock sharply higher by the close. |
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| | FTSE 100 - Risers
Amec (AMEC) 1,148.00p +3.99%
G4S (GFS) 250.50p +3.51%
Vedanta Resources (VED) 1,071.00p +3.08%
Babcock International Group (BAB) 1,242.00p +2.90%
Rolls-Royce Holdings (RR.) 1,123.00p +2.84%
ARM Holdings (ARM) 1,039.00p +2.47%
Rexam (REX) 504.00p +2.38%
Smiths Group (SMIN) 1,433.00p +2.21%
Capita (CPI) 981.00p +2.08%
BAE Systems (BA.) 453.90p +2.02%
FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 353.10p -5.26%
GKN (GKN) 362.50p -2.21%
Kingfisher (KGF) 377.50p -2.00%
Marks & Spencer Group (MKS) 487.10p -1.62%
Prudential (PRU) 1,247.00p -1.34%
IMI (IMI) 1,517.00p -1.30%
Barclays (BARC) 274.75p -1.12%
Fresnillo (FRES) 978.00p -1.06%
Antofagasta (ANTO) 891.00p -0.89%
Shire Plc (SHP) 2,515.00p -0.87%
FTSE 250 - Risers
QinetiQ Group (QQ.) 202.80p +4.59%
KCOM Group (KCOM) 100.70p +4.03%
Centamin (DI) (CEY) 53.25p +4.00%
Provident Financial (PFG) 1,638.00p +3.93%
Supergroup (SGP) 1,109.00p +3.74%
NMC Health (NMC) 350.00p +3.46%
Serco Group (SRP) 546.00p +3.31%
Rank Group (RNK) 155.50p +3.25%
Premier Farnell (PFL) 230.00p +3.19%
AL Noor Hospitals Group (ANH) 866.00p +3.16%
FTSE 250 - Fallers
Kenmare Resources (KMR) 22.25p -3.26%
Entertainment One Limited (ETO) 243.10p -2.37%
Ocado Group (OCDO) 445.50p -2.04%
Devro (DVO) 308.10p -1.94%
Britvic (BVIC) 599.50p -1.40%
Domino's Pizza Group (DOM) 603.00p -1.39%
Hochschild Mining (HOC) 163.90p -1.27%
PayPoint (PAY) 1,054.00p -1.22%
Dialight (DIA) 1,194.00p -1.08%
Wetherspoon (J.D.) (JDW) 745.50p -1.06% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Eighth consecutive day of gains ahead of US jobs report - Eighth consecutive day of gains
- Focus on US ahead of jobs report
- Akzo Nobel returns to profit
FTSE 100: 0.48%
DAX: 0.02%
CAC 40: -0.21%
FTSE MIB: -0.04%
IBEX 35: 0.36%
STOXX 600: 0.34%
Markets closed in a mixed, although broadly higher, fashion on Monday, boosted by upbeat earnings reports from the likes of Akzo Nobel and Royal Philips.
It was the eighth consecutive day of gains for the STOXX 600 index and came ahead of tomorrow’s widely anticipated release of delayed US non-farm payrolls data for September.
Back in Europe itself, data from Eurostat, the European Union's official statistics office, showed that Spain closed 2012 with the EU's highest public sector deficit as a percentage of gross domestic product, coming in at 10.6% including international aid for the banking sector.
Elsewhere in the EU, Germany registered a public surplus of 0.1% in 2012. The lowest deficits were those in Estonia, Sweden 0.2%, Luxembourg 0.6%, and Bulgaria 0.8%.
In other macro news, the German Producer Price Index revealed growth of 0.3% in September, compared to a 0.1% decline the previous month.
Shares of SAP surge higher
German business software maker SAP reiterated its full-year outlook but warned that its revenues and core operating profit may be negatively impacted by volatile exchange rates.
Dutch conglomerate Philips reported a near tripling in its third-quarter net profits.
Akzo Nobel pleased investors after returning to profit in the third quarter.
Swiss money supply growth slows down
Dutch house prices were off by 0.2% month-on-month in September.
Swiss money supply slowed in September, to a 9.7% year-on-year pace of advance, versus 10.4% in the month before. |
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| | US Market Report | | US open: Stocks flat ahead of jobs report, S&P 500 holds at record high - S&P 500 flat at record high
- Existing home sales fall, eyes turn to NFPs
- McDonald’s misses forecasts in third quarter
Dow Jones: -0.15%
Nasdaq: 0.18%
S&P 500: -0.01%
US stock markets opened broadly flat on Monday as investors showed caution ahead of the delayed release of the September non-farm payrolls figures due out tomorrow.
Indices had a strong week of gains last week on the back of upbeat corporate earnings from the likes of Google and Morgan Stanley, as well as speculation that the government shutdown may prompt the Federal Reserve to put off tapering stimulus. This pushed the benchmark S&P 500 up 2.4% on the week to an all-time high of 1,744.5 on Friday, a level which it held on to in early trading on Monday.
A backlog of US data should begin to unwind this week following the shutdown with last month’s employment report likely to garner the most attention on Tuesday. Consensus forecasts are pointing to an 180,000 increase in US non-farm payrolls last month, higher than the 169,000 gain seen in August. However, the unemployment rate is expected to have remained unchanged at 7.3%.
Matt Basi, Head of UK Sales Trading at CMC Markets, said that while the barrage of upcoming economic announcements may spark intraday volatility, “it’s unlikely we’ll see significant money flows on the numbers given that we’re now looking at historic data”. He said that all but the most hawkish commentators have almost entirely priced out any prospect of Fed tapering in 2013, "taking the edge off US data announcements to an extent".
As for today’s data, the National Association of Realtors reported that existing home sales slipped 1.9% month-on-month in September after hitting their highest level in nearly four years the month before. Sales fell to an annualised rate of 5.29m, just below the 5.30m forecast.
In other news, according to Barron’s this weekend, money managers who took part in its autumn survey expect the S&P 500 and Nasdaq to both gain 5% to approximately 1,824 and 4,116 points, respectively, by the next June. The Dow is seen rising 7% during that time.
McDonald’s falls after Q3 miss
Fast-food chain McDonald’s was in the red after third-quarter profits rose 4.6% to $1.52 a share, slightly below the consensus forecast for $1.51. The company saw revenue increase 2.4% to $7.32bn forecast: $7.43bn. Following global same-store sales growth of 0.9% during the period, McDonald’s warned that October would be more or less flat.
Telecoms giant AT&T was higher after the news that it has agreed to lease around 9,100 of its towers and offload another 600 to Crown Castle for $4.85bn.
US Steel gained this morning despite saying it will be hit by a $1.8bn writedown for its North American flat-rolled and Texas operations in the third quarter. Market reports have suggested that the cash could be used to finance an expansion in Europe.
JP Morgan Chase edged higher after agreeing to pay $13bn to end US civil probes of its mortgage-bond instruments.
Phone-equipment manufacturer Tellabs jumped after saying it will be taken private by Marlin Equity Partners in a deal valued at about $891m, for a 4.3% premium to Friday’s closing price. |
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| | Broker Tips | | Andor Technology: WH Ireland ups target from 420p to 435p, while downgrading from buy to outperform.
Anglo American: Deutsche Bank reduces target from 1830p to 1780p, while leaving its buy recommendation unchanged.
BAE Systems: Citi increases target from 360p to 460p and stays with its neutral rating.
BHP Billiton: JP Morgan cuts target from 2345p to 2300p, while leaving its neutral rating unaltered.
British American Tabacco: Panmure Gordon reduces target from 3900p to 3800p, while its buy recommendation remains unchanged.
Burberry Group: Goldman Sachs takes target from 2181p to 2282p and maintains a strong buy recommendation.
Cobham: Citi ups target from 250p to 285p maintaining its neutral rating.
Dignity: Panmure Gordon upgrades from hold to buy with a target of 1600p.
Elementis: Berenberg lowers target from 290p to 285p keeping a buy recommendation.
Informa: Westhouse Securities increases target from 513p to 570p reiterating a neutral rating. Barclays lowers target from 615p to 610p and stays with its overweight rating. Canaccord Genuity ups target from 560p to 600p and keeps a buy recommendation.
Interbulk: Westhouse Securities shifts target from 9p to 8.50p and downgrades to add.
Man Group: Exane moves target from 76p to 88p and upgrades to neutral.
Marshalls: Panmure Gordon takes target from 148p to 163p retaining a hold recommendation.
Meggitt: Citi ups target from 500p to 550p and reiterates a neutral rating.
Mulberry Group: Goldman Sachs ups target from 1392p to 1406p and stays with its buy recommendation.
New World Resources: Goldman Sachs moves target from 42p to 44.40p, but still recommends selling.
Rathbone Brothers: Numis raises target from 1490p to 1550p and keeps a hold recommendation.
Record: JP Morgan shifts target from 40p to 45p retaining an overweight rating.
Reed Elsevier: Deutsche Bank raises target from 860p to 930p and keeps a buy recommendation.
Renishaw: N+1 Singer downgrades to hold with a target of 1675p.
Rolls-Royce Group: Citi takes target from 1200p to 1280p and retains a buy recommendation.
RPS Group: Panmure Gordon ups target from 303p to 315p maintaining a buy recommendation.
Sage: Panmure Gordon shifts target from 337p to 333p, while leaving its hold recommendation unaltered.
Senior: N+1 Singer upgrades to buy with a target of 312p.
Spectris: JP Morgan increases target from 2455p to 2540p and maintains an overweight rating.
St Ives: N+1 Singer raises target to 211p and retains a buy recommendation.
Synergy Health: Numis upgrades to buy with a target of 1300p.
Tracsis: WH Ireland ups target from 190p to 220p and maintains a buy recommendation.
Travis Perkins: UBS raises target from 1825p to 1960p keeping a buy recommendation.
WH Smith: Barclays ups target from 935p to 990p and retains an overweight rating.
Wolfson: N+1 Singer reduces target from 170p to 156p and downgrades to hold. | | |
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