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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 extend gains on hopes over debt-ceiling deal UK stocks were making small gains on Friday morning in light of an impressive finish on Wall Street and Asian markets overnight on the back of hopes that US lawmakers could come to a resolution over the impending debt ceiling.
Benchmarks in New York surged by at least 2% each - the Dow Jones put it its best one-day performance since December 2011 - while indices in Tokyo and Hong Kong followed suit as politicians stepped up negotiations over a short-term deal to raise the borrowing limit in order to avoid a dreaded default.
After a 1.5% jump on Thursday, the FTSE 100 was extending gains this morning, rising 0.3% to around 6,450 early on.
"Risk appetite is finally returning to the financial markets, with investors more optimistic over a deal on the debt ceiling now that both sides are finally showing a willingness to seriously negotiate," said Market Analyst Craig Erlam from Alpari.
No deal yet, but signs of progress
House Speaker John Boehner on Thursday afternoon announced a proposal to raise the limit for six weeks without conditions tied to changes in policy. He said he hopes that President Barack Obama would view the "good-faith" move as an attempt to meet him halfway on negotiations over the budget.
Obama and House Republicans failed to come to a deal following a 90-minute meeting late last night, but showed that they were still willing to negotiate. "After a discussion about potential paths forward, no specific determination was made," the White House said in a statement. "The President looks forward to making continued progress with members on both sides of the aisle."
While any deal would not automatically re-open the government - lawmakers still need to agree on a new budget - confidence in averting a default has now undeniably increased on the markets.
However, Financial Sales Trader Alex Conroy from Spreadex said that the implications for the next six weeks are" less positive", as simply delaying the issue could lead to "further volatility" on markets.
"Only the possibility of global economic Armageddon and the pressure of public opinion has forced the Republics to temporarily yield. The egregious failure of bi-partisan politics throughout this ordeal suggests this decision and apparent willingness to deal by the Republicans should be taken with a grain of salt," he said.
FTSE 350: Chemring plummets after warning on performance
Military equipment manufacturer Chemring sank sharply this morning after saying that its North American business continues to be affected by the US government shutdown and said the full impact was unknown - although it would have a definite impact on October order intake and deliveries in the US Department of Defense. It has suffered quality and production issues, particularly at Kilgore, and will also suffer from an adverse move in the sterling/dollar exchange rate, reducing operating by around £8m.
Stocks heavily exposed to the US defence markets, such as BAE Systems and Meggitt, were trading in the red.
Speciality chemicals firm Croda International was a heavy faller this morning after analysts at Liberum Capital downgraded the stock to 'hold'. In contrast, Diageo gained after Exane BNP Paribas raised the drinks giant to 'outperform'.
Restaurant and hotels owner Whitbread was also higher after Citigroup upped the stock to 'buy', saying: "Improved sentiment around the European economies suggests that we could be at the start of a renewed upgrade cycle for European focused hotel names". Whitbread gained strongly on Thursday after one analyst cited the possibility that it could spin off its Costa coffee chain. |
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| | FTSE 100 - Risers
Standard Life (SL.) 353.10p +1.93%
Shire Plc (SHP) 2,417.00p +1.51%
Whitbread (WTB) 3,157.00p +1.38%
Anglo American (AAL) 1,495.50p +1.32%
Vedanta Resources (VED) 1,028.00p +1.28%
Travis Perkins (TPK) 1,645.00p +1.23%
Admiral Group (ADM) 1,229.00p +1.15%
Aberdeen Asset Management (ADN) 387.60p +1.10%
Schroders (SDR) 2,612.00p +1.08%
Diageo (DGE) 1,941.50p +1.07%
FTSE 100 - Fallers
Croda International (CRDA) 2,537.00p -2.50%
Meggitt (MGGT) 535.50p -1.92%
BAE Systems (BA.) 443.80p -1.53%
Aggreko (AGK) 1,479.00p -0.74%
Wolseley (WOS) 3,180.00p -0.66%
Fresnillo (FRES) 930.00p -0.59%
Royal Bank of Scotland Group (RBS) 382.70p -0.57%
British American Tobacco (BATS) 3,217.00p -0.56%
Imperial Tobacco Group (IMT) 2,187.00p -0.50%
ARM Holdings (ARM) 979.00p -0.46%
FTSE 250 - Risers
Brown (N.) Group (BWNG) 485.90p +2.14%
Bwin . party Digital Entertainment (BPTY) 124.00p +1.89%
PayPoint (PAY) 1,054.00p +1.64%
Centamin (DI) (CEY) 46.87p +1.56%
Galliford Try (GFRD) 1,081.00p +1.50%
International Personal Finance (IPF) 628.00p +1.37%
3i Group (III) 358.00p +1.30%
Thomas Cook Group (TCG) 147.00p +1.24%
Betfair Group (BET) 992.00p +1.22%
Cairn Energy (CNE) 264.50p +1.03%
FTSE 250 - Fallers
Chemring Group (CHG) 232.00p -18.42%
Kenmare Resources (KMR) 25.80p -11.31%
AL Noor Hospitals Group (ANH) 811.00p -2.87%
Cobham (COB) 276.60p -2.50%
Diploma (DPLM) 617.50p -2.14%
Xaar (XAR) 782.50p -2.07%
Essar Energy (ESSR) 124.60p -1.50%
Barr (A.G.) (BAG) 514.50p -1.44%
Keller Group (KLR) 1,036.00p -1.33%
Rank Group (RNK) 162.20p -1.28% |
| | UK Event Calendar | | INTERIM DIVIDEND PAYMENT DATE
32Red, Admiral Group, AZ Electronic Materials SA (DI), Berendsen, Bwin.party Digital Entertainment, Cape, Chime Communications, Clarke (T.), Communisis, Drax Group, Glanbia, H&T Group, IMI, Maintel Holdings, PPHE Hotel Group Ltd, Tyman
QUARTERLY PAYMENT DATE
British Assets Trust, Land Securities Group, Schlumberger Ltd.
QUARTERLY EX-DIVIDEND DATE
Abbott Laboratories
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Business Inventories (US) (13:30)
Consumer Price Index (GER) (07:00)
Manufacturing Inventories (US) (15:00)
Producer Price Index (US) (13:30)
Retail Sales (US) (13:45)
Retail Sales Inventories (US) (15:15)
U. of Michigan Confidence (Prelim) (US) (15:00)
FINALS
Aeorema Communications
IMSS
XP Power Ltd. (DI)
SPECIAL DIVIDEND PAYMENT DATE
Admiral Group, Dunelm Group, Goodwin Plc
AGMS
Transense Technologies
FINAL DIVIDEND PAYMENT DATE
Daisy Group, Goodwin Plc, Henderson Smaller Companies Inv Trust, Mid Wynd International Inv Trust |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks little changed on US debt ceiling talks
FTSE 100: 0.31%
DAX: 0.20%
CAC 40: -0.19%
FTSE MIB: -0.04%
IBEX 35: -0.24%
Stoxx 600: 0.14%
European stocks were mixed after the US House of Representatives offered President Barack Obama a short-term debt limit increase to avoid a default.
Royal Mail begins stock market debut
Royal Mail's shares jumped as the UK postal service raised £1.7bn in an initial public offering on the back of high demand from investors.
Danish cancer drug developer Genmab advanced after saying its ofatumumab drug showed a significant reduction in cumulative number of new brain lesions in a multiple sclerosis study.
Geberit fell after Goldman Sachs cut its rating of the Swiss maker of toilets and bathroom-piping systems to 'sell' from 'neutral'.
French computer-services company Cap Gemini rallied after industry peer Infosys raised its sales forecast.
Euro/dollar climbs
The euro rose 0.28% to the 1.3558 US dollar.
Brent crude futures fell $0.188 to $111.590 per barrel on the ICE.
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| | US Market Report | | US close: Stocks soar as Republicans propose debt limit increase
Dow Jones: 2.18%
Nasdaq: 2.26%
S&P 500: 2.18%
US stocks soared on Thursday with Wall Street benchmarks jumping at least two per cent each on hopes that lawmakers can come to a deal over the debt ceiling to stave off a default.
The Dow Jones Industrial Average specifically surged 323.09 points to 15,126.07 (+2.18%), its best one-day increase since December 2011. Analysts highlighted that the index was bouncing off of technical support in the form of its 200-day moving average.
"On the positive side of things the fact that the two sides are talking to each other is progress and as well know jaw-jaw is better than war-war," said Senior Market Analyst Michael Hewson from CMC Markets.
Positive developments in Washington
After 10 days of a government shutdown, House Republicans proposed a deal to raise the debt ceiling in order to avoid a dreaded default. While any deal would not automatically re-open the government - they still need to agree on a new budget - confidence in averting a default increased on the markets.
House Speaker John Boehner announced a proposal to raise the limit for six weeks without conditions tied to changes in policy. He said he hopes that President Barack Obama would view the "good-faith" move as an attempt to meet him halfway on negotiations over the budget.
The move sparked massive gains across stock markets across the globe on Thursday in spite of a large jump in unemployment claims in the States, with the weekly figure rising from 308,000 to 374,000. Nevertheless, this was largely as a result of a backlog of claims linked to an IT upgrade in California and temporary lay-offs due to the shutdown.
After markets closed however, Obama and House Republicans failed to come to a deal following a 90-minute meeting, but showed that they were still willing to negotiate.
“After a discussion about potential paths forward, no specific determination was made,” the White House said in a statement. “The president looks forward to making continued progress with members on both sides of the aisle.”
Banks surge
Banking stocks were among the day's best performers as hopes over a deal in Washington spurred the demand for cyclical sectors. Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Goldman Sachs all finished with impressive gains.
Citrix Systems declined after the technology company reported preliminary third-quarter earnings that missed the analysts’ expectations.
Gilead Sciences climbed after making progress in a study of patients with chronic lymphocytic leukemia.
Social media group Facebook meanwhile was providing a lift on the tech-heavy Nasdaq after suffering sharp falls in the first three sessions earlier this week.
S&P 500 - Risers
Best Buy Co. Inc. (BBY) $39.00 +7.56%
Gilead Sciences Inc. (GILD) $62.74 +6.52%
Time Warner Cable Inc. (TWC) $116.95 +6.06%
Invesco Ltd. (IVZ) $33.92 +5.47%
Netflix Inc. (NFLX) $303.99 +5.39%
Marathon Petroleum Corporation (MPC) $65.31 +5.17%
CONSOL Energy Inc. (CNX) $36.79 +4.90%
Tesoro Corp. (TSO) $43.52 +4.77%
Valero Energy Corp. (VLO) $35.57 +4.71%
Discover Financial Services (DFS) $51.19 +4.62%
S&P 500 - Fallers
Citrix Systems Inc. (CTXS) $58.75 -11.87%
Sears Holdings Corp. (SHLD) $55.27 -7.22%
Quest Diagnostics (DGX) $58.66 -4.93%
L Brands Inc (LTD) $56.60 -4.07%
St Jude Medical Inc. (STJ) $54.64 -1.66%
Hewlett-Packard Co. (HPQ) $22.32 -1.24%
Laboratory Corporation of America Holdings (LH) $99.03 -1.11%
Yum! Brands Inc. (YUM) $65.94 -0.81%
Newmont Mining Corp. (NEM) $26.30 -0.75%
Red Hat Inc. (RHT) $42.87 -0.53%
Dow Jones I.A - Risers
Boeing Co. (BA) $118.90 +3.87%
Unitedhealth Group Inc. (UNH) $73.98 +3.64%
JP Morgan Chase & Co. (JPM) $52.52 +3.49%
American Express Co. (AXP) $74.66 +3.38%
Walt Disney Co. (DIS) $65.58 +3.13%
Alcoa Inc. (AA) $8.35 +3.09%
United Technologies Corp. (UTX) $105.92 +2.99%
General Electric Co. (GE) $24.25 +2.89%
Bank of America Corp. (BAC) $14.23 +2.82%
Wal-Mart Stores Inc. (WMT) $74.79 +2.45%
Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $22.32 -1.24%
Nasdaq 100 - Risers
Liberty Interactive Corp (LINTA) $24.50 +7.17%
Gilead Sciences Inc. (GILD) $62.74 +6.52%
Netflix Inc. (NFLX) $303.99 +5.39%
Catamaran Corp (CTRX) $48.39 +4.92%
Facebook Inc. (FB) $49.05 +4.87%
Activision Blizzard Inc. (ATVI) $17.05 +4.73%
Biogen Idec Inc. (BIIB) $234.17 +4.61%
Baidu Inc. (BIDU) $153.16 +4.52%
Regeneron Pharmaceuticals Inc. (REGN) $294.08 +4.45%
Celgene Corp. (CELG) $152.55 +3.87%
Nasdaq 100 - Fallers
Citrix Systems Inc. (CTXS) $58.75 -11.87%
Sears Holdings Corp. (SHLD) $55.27 -7.22%
Green Mountain Coffee Roasters Inc. (GMCR) $67.16 -2.51%
Intuitive Surgical Inc. (ISRG) $387.21 -0.50%
Randgold Resources Ltd. Ads (GOLD) $68.88 -0.32%
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| | Friday newspaper round-up | | Royal Mail, Milliband, Repo market Shares in the Royal Mail have been priced at 330p but no private investor who applied for shares will get more than 749.10 pounds-worth - and those who applied for more than 10,000 pounds will get nothing. The share price values the postal service at 3.3bn pounds, the government confirmed last night. Private investors who applied for shares in the privatised giant will receive 227, worth 749.10 pounds at the 330p price - but those who wanted more than 10,000 pounds-worth in the heavily over-subscribed float have been dealt a heavy blow, The Daily Mail reports.
David Cameron is failing to get a grip on profiteering energy companies, Ed Miliband said yesterday, as SSE became the first of the "big six" utility providers to raise its prices – slapping an average of £106 a year on its customers' bills. The Labour leader, who has made energy prices a key policy battleground, said firms were "ripping off customers". Economists, meanwhile, warned that the UK's fragile economic recovery could be in jeopardy as household income is hit by what is likely to be the first in a series of utility bill price rises, The Scotsman explains.
Big banks and investors are preparing contingency plans to deal with the potential impact on the $5tn "repo market" of the US government missing a payment on its bonds, even as Republicans propose a six-week reprieve for the debt ceiling limit, the FT says.
BT is back in the consumer mobile phone business after signing a partnership deal with EE under which the former national monopoly will return to wireless, more than a decade after it sold off the O2 network. From next year, by renting space on EE's masts, BT will be able to offer its customers 4G smartphone connections bundled with broadband, landline calls and pay television. By mirroring the Virgin Media model, BT could gain an edge over BSkyB, which does not offer mobile, The Guardian writes.
Mortgage lending has bounced back to levels not seen since before the financial crisis, driven by demand from buyers with small deposits. The rise is likely to fuel concerns over the effect that the second phase of the government's Help to Buy scheme could have on the housing market that was launched at banks this week. The number of mortgages written in September topped 68,000, according to a report by e.surv, the surveyor owned by LSL Property Services, The Times says.
George Osborne has squeezed an additional £250 million a year out of the mobile phone industry after Ofcom revealed a plan to more than quadruple the fees that companies have to pay to use the nation's airwaves. The move, which is proposed to come into effect next year, has been on the cards since 2010, when the telecoms regulator was instructed by the government to review the fees, which were substantially lower than in other countries, The Times reports. | | |
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