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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Markets in 'wait-and-see' mode as shutdown continues After fluctuating between gains and losses for most of the day, the FTSE 100 finished broadly flat on Friday as stocks struggled for direction.
In the absence of economic news and ongoing political uncertainty in the States, markets remain in "wait-and-see mode", according Senior Market Analyst Michael Hewson from CMC Markets.
The FTSE 100 finished just 4.84 points higher at 6,453.88, but finished down 58.78 points on the week a fall of 0.9%.
Since the partial shutdown of the US government has extended into its fourth day, governmental agencies and departments will not be releasing economic data as scheduled, while politicians continue to wrangle over the budget and the crucial debt ceiling limit.
Hewson said: "In the absence of today’s scheduled US employment report with little in the way of meaningful trading volumes going through, traders chose to start their weekends early."
Markets are hoping that Congress will agree to raise the $16.7tn debt limit by the October 17th deadline to prevent the US government defaulting on its obligations, something that the Treasury Department said could have a “catastrophic effect” on all aspects of the US economy. It said in a report on Thursday that a default could lead to “events of the magnitude of late 2008 or worse”.
Meanwhile, International Monetary Fund (IMF) Managing Director Christine Lagarde said failure to raise the debt ceiling would do damage to the global economy: “The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy."
Comments from House Speaker John Boehner continue to be in focus after he said he would not allow a default and would consider using a combination of Republican and Democratic votes to lift the debt ceiling if needed. Speaking today he called for both sides to "sit down" and negotiate, saying "this isn't some damn game".
"I don't believe we should default on our debt [...] If we are going to raise the amount of money we can borrow, we ought to do something about our spending problem and lack of economic growth."
FTSE 100: Standard Life gains on JPMorgan comments
Financials were performing relatively well today with insurance giant Standard Life leading the risers following comments from JP Morgan, which said that the group will benefit from "UK operational leverage, growth potential in Standard Life Investments and a secure dividend". Analyst Ashik Musaddi said he expected the firm's £300m special dividend - announced at the time of the full-year results in March - to be brought forward.
Prudential and Resolution were also edging higher, along with banking groups HSBC and RBS. Emerging market-focused Standard Chartered however was in the red after receiving a ratings downgrade from Numis last night.
Barclays also fell despite a ratings upgrade by Investec from 'add' to 'buy'. The copmany today announced it had received valid acceptances in respect of over 3bn of the new discounted shares offered to shareholders (around 95%) for its £5.8bn rights issue. Bookrunners who have underwritten the offer will sell the remaining 173m shares today.
Sweeteners and food ingredients group Tate & Lyle was in demand despite a mixed second- quarter update. The company said that adjusted operating profits in the second quarter were slightly below last year due to softness in the US beverage sector but it still maintained its guidance for "another year of profitable growth" in the 12 months to March 2014.
Shares in GlaxoSmithKline edged lower after US pharmaceuticals peer Eli Lilly warned on its 2014 revenue target due to "challenging" market conditions and foreign-exchange effects in Japan and the emerging markets. Panmure Gordon said Glaxo is the most exposed to Japan (among the companies its covers) which accounted for some 8.4% of its revenues in 2012.
Kingfisher, the DIY retailer which owns the B&Q and Screwfix brands in the UK, was out of favour and continues to be under heavy selling pressure since the release of its interim results on September 11th. The firm reported a 0.8% in like-for-like sales in the first half (at constant currency) and a 1.6% drop in adjusted pre-tax prifits. Since then, the stock was fallen by around 12%.
FTSE 250: Carpetright sinks on CEO exit, profit warning
Shares in carpet and curtains retailer Carpetright plunged this morning after announcing the departure of Chief Executive Darren Shapland as it warned falling sales meant full-year profits would be "significantly" below its previous expectations. Carpetright reported that underlying sales in the UK were down 2.5% in the 10 weeks ending September 29th and had fallen 7.6% in the rest of Europe in local currency terms.
Retail peers Dixons and Home Retail however were on the rise after UBS upgraded its ratings for both stocks from 'neutral' to 'buy' and hiked target prices. In a review of the UK retail sector, the bank said that it foresees a re-rating "as real wage pressure abates, employment recovers further and the big debt paydown subsides" |
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| | FTSE 100 - Risers
Standard Life (SL.) 354.10p +2.52%
GKN (GKN) 352.90p +2.44%
Royal Bank of Scotland Group (RBS) 373.20p +1.77%
ITV (ITV) 178.50p +1.71%
Mondi (MNDI) 1,061.00p +1.53%
Anglo American (AAL) 1,491.00p +1.26%
HSBC Holdings (HSBA) 677.30p +1.17%
CRH (CRH) 1,483.00p +1.16%
Reed Elsevier (REL) 835.00p +1.15%
Pearson (PSON) 1,239.00p +1.06%
FTSE 100 - Fallers
Kingfisher (KGF) 369.00p -2.89%
Aggreko (AGK) 1,442.00p -2.50%
Petrofac Ltd. (PFC) 1,380.00p -1.50%
Sage Group (SGE) 329.00p -1.47%
Standard Chartered (STAN) 1,445.00p -1.40%
William Hill (WMH) 407.80p -1.26%
Persimmon (PSN) 1,077.00p -1.10%
Marks & Spencer Group (MKS) 494.00p -1.04%
Wolseley (WOS) 3,164.00p -1.00%
Next (NXT) 5,090.00p -0.97%
FTSE 250 - Risers
Ocado Group (OCDO) 420.90p +4.44%
Bank of Georgia Holdings (BGEO) 1,998.00p +3.68%
Greggs (GRG) 428.00p +2.86%
Kenmare Resources (KMR) 29.00p +2.51%
Regus (RGU) 195.70p +2.35%
WH Smith (SMWH) 853.00p +2.22%
Paragon Group Of Companies (PAG) 326.00p +2.10%
Kier Group (KIE) 1,707.00p +2.03%
Home Retail Group (HOME) 171.00p +1.97%
Greencore Group (GNC) 153.80p +1.92%
FTSE 250 - Fallers
Carpetright (CPR) 616.50p -8.46%
Alent (ALNT) 325.00p -4.72%
Computacenter (CCC) 520.50p -3.34%
Daejan Holdings (DJAN) 3,896.00p -3.21%
Big Yellow Group (BYG) 435.90p -3.13%
PayPoint (PAY) 1,048.00p -2.69%
Soco International (SIA) 406.00p -2.64%
Balfour Beatty (BBY) 275.00p -2.34%
Moneysupermarket.com Group (MONY) 147.50p -2.32%
Aveva Group (AVV) 2,551.00p -2.26% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks higher as Italy's Berlusconi faces explusion FTSE 100: 0.08%
DAX: 0.29%
CAC 40: 0.88%
FTSE MIB: 1.59%
IBEX 35: 1,35%
Stoxx 600: 0.11%
European equities rose after a Senate panel in Italy voted to oust Silvio Berlusconi from the chamber and as US leaders resumed budget talks.
The Italian Senate panel recommended the expulsion of centre-right leader and former Prime Minister Berlusconi over his conviction for tax fraud. The proposal is now expected to go before the Senate within three weeks.
Earlier in the week he had threatened to topple the coalition government over the issue but backed down during a confidence vote on Wednesday.
Berlusconi was convicted of tax fraud in October 2012 over deals his media company Mediaset made to purchase TV rights to US films.
Moody's has warned that the political developments over the last few weeks have highlighted the fragility of the Italian government.
The credit rating agency said the political instability continues to be “credit negative” since it could delay fiscal and structural reform.
Lidnt, Deutsche Lufthansa
Lindt advanced after the premium chocolate maker said it will begin purchasing shares at the end of this month until the end of 2014 while at the same time maintaining its dividend.
Deutsche Lufthansa gained after the airline said operating losses at its Germanwings discount carrier will fall by €90m.
Nokian Renkaat declined after the Nordic tyre company said operating profit and net sales will fall this year from 2012.
Bookmaker William Hill slumped after warning there was no certainty it would make up the shortfall caused by a disappointing third quarter when operating profits slumped 31% despite a 10% increase in net revenues.
Other asset classes mixed
The euro fell 0.20% to the 1.3592 US dollar.
Brent crude futures rose $0.073 to $109.080 per barrel on the ICE. |
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| | US Market Report | | The major U.S. index futures are pointing to a modestly higher opening on Friday, with sentiment reflecting an attempt by the markets to rebound following two straight sessions of losses. Although bargain hunting may generate some strength, the odds are heavily stacked up against a strong recovery, given persistent worries concerning the intransigence among lawmakers to arrive at a consensus regarding the budget. With the non-farm payrolls report being delayed, the markets may not have much directional cues, save a few Fed speeches scheduled for the day.
U.S. stocks declined for the second straight day on Thursday amid anxiety concerning the budgetary deadlock and U.S. debt ceiling. The major averages opened lower despite some positive overseas data and the domestic jobless claims report. The averages continued to decline until the mid-session. After trimming part of their losses in the afternoon, the averages moved roughly sideways before closing notably lower.
The Dow Industrials ended down 136.66 points or 0.90 percent at 14,997 and the S&P 500 Index closed 15.21 points or 0.90 percent lower at 1,679, while the Nasdaq Composite closed at 3,774, down 40.68 points or 1.07 percent.
All but one of the Dow components declined in the session, with Boeing , Chevron , DuPont and Visa (V) leading the slide.
Brokerage, housing, retail, gold, biotechnology, utility and transportation stocks were among the biggest decliners of the session.
On the economic front, the Labor Department reported that jobless claims edged up to 308,000 in the week ended September 28th from an upwardly revised reading of 307,000 for the previous week. The four-week average declined to 305,000 from 309,000, marking the lowest level since May 2007. Continuing claims calculated with a week's lag rose 104,000 to 2.925 million in the week ended September 21st.
The results of the Institute for Supply Management's non-manufacturing survey showed that the non-manufacturing index fell to 54.4 in September from 58.6 in August. The employment index also fell to a 4-month low of 52.7 from 57 in August. The business activity index slipped to 55.1 from 62.2 and the new orders index declined 1 point to 59.6. The order backlogs index was little changed.
The Dow Industrials extended its slide yesterday and is precariously positioned amid the engulfing political uncertainty. An extension of the downward move could keep the index on track to test supports around 14,896 and 14,761.
On the upside, the index has a series of resistance levels. The 15,060 and 15,121 levels, the index's key 100-day, 50-day and 21-day moving averages (currently around 15,232, 15,253 and 15,284) are likely to offer resistance to the index. Additionally, the index may also find resistance around the 15,321, 15,379 and 15,465 levels.s Stocks in Focus Comtech Telecom reported fourth quarter GAAP earnings of 28 cents per share compared to 38 cents per share in the year ago period. Net sales fell to $84.4 million from the year-ago quarter's $112.8 million. For 2014, the company expects GAAP earnings of $1.07 to $1.19 per share on sales of $320 million to $340 million. The results exceeded estimates and the guidance was in line.
Pfizer announced that the FDA has approved DUAVEE for the treatment of moderate to severe Vasomotor Symptoms associated with menopause and the prevention of menopausal osteoporosis. The company said it expects DUAVEE to be available in the U.S. in the first quarter of 2014.
Forest Oil announced a deal to sell its Templar Energy oil and gas assets in the Texas Panhandle Area for $1 billion. The deal is expected to close on or before November 25th, 2013. For the most recent 12-month period, the assets proposed to be divested produced 100 million metric cubic feet of oil equivalents and generated EBITDA of about $180 million.
Lexmark announced a deal to buy PACSGEAR, a provider of connectivity solutions for healthcare providers, for $54 million in cash. |
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| | Broker Tips | | Aberdeen Asset Management: JP Morgan lowers target from 523p to 509p maintaining an overweight rating.
Admiral Group: Canaccord Genuity cuts target from 1200p to 1160p retaining its sell recommendation.
API Group: Numis downgrades to add with a target of 85p.
Arbuthnot Banking Group: Numis ups target from 1032p to 1070p upgrading to add.
Barclays: Investec upgrades to buy with a target of 300p.
Barratt Development: Panmure Gordon moves target from 340p to 352p and keeps a buy recommendation.
Bellzone Mining: Canaccord Genuity shifts target from 4.20p to 5p and leaves its hold recommendation unaltered.
BG Group: Credit Suisse cuts target from 1190p to 1170p and reiterates an underperform rating.
Centrica: Investec reduces target from 400p to 375p downgrading to add.
Diageo: Numis initiates with a target of 2200p and an add rating.
Direct Line: Canaccord Genuity cuts target from 260p to 240p, while its buy recommendation is kept.
Esure Group: Canaccord Genuity reduces target from 270p to 250p staying with its buy recommendation.
Faroe Petroleum: Westhouse Securities upgrades to buy with a target of 175p.
F&C Asset Management: JP Morgan shifts target from 113p to 118p and maintains a neutral rating.
First Group: JP Morgan moves target from 145p to 150p retaining an overweight rating.
Gemfields: JP Morgan shifts target from 23p to 24p and leaves its underweight rating unchanged.
Henderson Group: JP Morgan raises target from 174p to 198p and reiterates a neutral rating.
Home Retail Group: Nomura moves target from 200p to 215p and retains a buy recommendation.
Jupiter Fund Management: JP Morgan shifts target from 374p to 377p and stays with its overweight rating.
Kofax: Panmure Gordon ups target from 385p to 391p upgrading from hold to buy.
Man Group: JP Morgan lowers target from 108p to 100p and keeps a neutral rating.
Moneysupermarket: Westhouse Securities upgrades to buy with a target of 195p.
office2office: Panmure Gordon ceases its coverage and removes all forecasts.
Paragon Group of Companies: JP Morgan increases target from 361p to 396p keeping its overweight rating.
Record: JP Morgan shifts target from 43p to 40p, while its overweight rating remains unaltered.
Schroders: JP Morgan takes target from 2543p to 2624p and maintains an overweight rating.
SSE: Investec reduces target from 1520p to 1475p, while upgrading to add.
Standard Life: JP Morgan ups target from 419p to 430p retaining its overweight rating.
Tate & Lyle: Jefferies cuts target from 980p to 900p, while keeping its buy recommendation.
Tesco: Credit Suisse lowers target from 430p to 420p and maintains an outperform rating.
Tricorn Group: Westhouse Securities moves target from 44p to 50p stays with its buy recommendation.
William Hill: Canaccord Genuity lowers target from 438p to 425p retaining a hold recommendation.
Wolseley: JP Morgan raises target from 3350p to 3550p and reiterates an overweight rating. | | |
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