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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: FTSE closes marginally higher as Fed reveals divide - FTSE inches higher by close
- Barlcays suspends six FX traders
- Fed officials reveal their divided opinions
- PO staff call off Monday's strike at bigger branches
techMARK 2,657.61 -0.17%
FTSE 100 6,734.74 +0.05%
FTSE 250 15,455.69 -0.16%
The FTSE ultimately settled marginally higher after small movements either side of the opening level throughout the session.
Making headlines this afternoon was Barclays, which revealed it had suspended six FX traders while it investigated allegation of global currency market manipulation - it stressed there was no evidence of wrongdoing.
Monday's proposed strike by Post Office staff at larger branches has been called off, with renewed talks to begin next week, the Communication Workers Union said.
In other news, the government has announced its intention to take "action on water bills", with details of its plan to tackle the rising utility price set to be unveiled next week.
Over in the US, the Institute for Supply Management's factory index climbed to 56.4 in October, the highest since April 2011, from 56.2 a month earlier. It exceeded the 50 reading that signals expansion and a forecast of 55.
Earlier the US Markit manufacturing sector purchasing managers index (PMI) nudged higher to 51.8 in October, after a reading of 51.1 the prior month. Economists had pencilled in a reading of 51.1.
Much-anticipated comments from Fed officials revealed their dividend positions on the subject of monetary policy, with Charles Plosser, who is the President of the Philadelphia Fed, saying he is ready to taper, and James Bullard of St. Louis backing the programme whole-heartedly.
Back on this side of the pond, UK manufacturing purchasing managers index (PMI) slipped to 56.0 in October from a revised reading of 56.3 in September. That was a shade below the consensus estimate of 56.1 for the month but Markit pointed out the rate of expansion was only moderately below the two-and-a-half year high recorded in August.
Meanwhile, October Chinese factory activity gave investors some cause for concern because although it climbed from 51.1 to 51.4 month-on-month, there was in fact a significant gap between big and small manufacturers, with the smaller companies actually experiencing a contraction in the four-week period.
Meggitt shares hammered after update
Meggitt had a double dose of bad news for investors as it told them trading had been "slightly" below expectations and a supply hiccup could cost 20m pounds. The FTSE 100 aerospace and defence manufacturer warned it now expected 2013 revenue growth rates to be in the "low single digits". It had given guidance of mid single digit revenue growth for the full year at its interims in August.
RBS was also significantly lower after it said it will not split into 'good' and 'bad' banks and will instead create an internal 'bad bank' where it will shelve off 38bn of its toxic assets. The group reported a 14% fall in core operating profit to 1.28bn in the third quarter, while non-core operating losses widened to 845m from 586m a year earlier due to exit and restructuring costs as the bank prepares to return to privatisation.
Meanwhile, shares in Vodafone were lifted by growing speculation that US giant AT&T was plotting a takeover of the UK mobile company. Executives at AT&T were putting together plans for a possible takeover of the company next year, reported Bloomberg citing people familiar with the situation.
IAG climbed after Deutsche Bank reiterated its 'buy' rating on the stock, with a target of 360p, ahead of its results due out next week.
Shares in Royal Dutch Shell regained some of yesterday's heavy losses, which occurred after the group said its earnings declined more than expected due to weaker refinery conditions, higher costs and lower volumes. Chief Executive Officer Peter Voser said headwinds that continued to "erode the near term outlook" included weak industry refining margins and security issues in Nigeria but pointed to a strong flow of new projects and said Shell would increase the pace of asset sales. |
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| FTSE 100 - Risers
Vodafone Group (VOD) 232.50p +3.56%
International Consolidated Airlines Group SA (CDI) (IAG) 353.90p +1.72%
Schroders (SDR) 2,617.00p +1.47%
Royal Dutch Shell 'B' (RDSB) 2,189.50p +1.39%
Royal Dutch Shell 'A' (RDSA) 2,097.50p +1.01%
Shire Plc (SHP) 2,778.00p +0.98%
Smith & Nephew (SN.) 804.50p +0.94%
Rio Tinto (RIO) 3,184.00p +0.82%
HSBC Holdings (HSBA) 687.30p +0.76%
Persimmon (PSN) 1,273.00p +0.63%
FTSE 100 - Fallers
Meggitt (MGGT) 509.00p -11.09%
Royal Bank of Scotland Group (RBS) 340.00p -7.51%
Randgold Resources Ltd. (RRS) 4,507.00p -2.87%
Barclays (BARC) 256.30p -2.77%
G4S (GFS) 254.80p -2.56%
Glencore Xstrata (GLEN) 332.25p -2.28%
Antofagasta (ANTO) 837.00p -2.11%
Fresnillo (FRES) 957.50p -1.85%
Experian (EXPN) 1,247.00p -1.81%
Hargreaves Lansdown (HL.) 1,169.00p -1.76%
FTSE 250 - Risers
Greencore Group (GNC) 187.50p +4.11%
IP Group (IPO) 151.00p +2.72%
RPS Group (RPS) 297.20p +2.48%
Kenmare Resources (KMR) 20.80p +2.21%
WH Smith (SMWH) 920.50p +2.16%
Ashtead Group (AHT) 668.50p +2.06%
Bovis Homes Group (BVS) 800.00p +1.91%
Hiscox Ltd (HSX) 673.50p +1.81%
Partnership Assurance Group (PA.) 414.60p +1.62%
Direct Line Insurance Group (DLG) 228.50p +1.56%
FTSE 250 - Fallers
Polymetal International (POLY) 566.50p -5.50%
Afren (AFR) 150.00p -4.88%
Senior (SNR) 286.00p -3.96%
Go-Ahead Group (GOG) 1,626.00p -3.33%
Kazakhmys (KAZ) 254.00p -3.02%
Supergroup (SGP) 1,137.00p -2.99%
Imagination Technologies Group (IMG) 270.00p -2.84%
Enterprise Inns (ETI) 147.30p -2.77%
Wood Group (John) (WG.) 790.00p -2.71%
Fenner (FENR) 389.90p -2.52%
FTSE TechMARK - Risers
Puricore (PURI) 48.50p +5.43%
Ark Therapeutics Group (AKT) 0.36p +4.35%
Skyepharma (SKP) 103.00p +3.26%
Wolfson Microelectronics (WLF) 145.00p +3.20%
E2V Technologies (E2V) 148.50p +3.12%
Torotrak (TRK) 27.75p +1.83%
SDL (SDL) 255.50p +1.39%
Promethean World (PRW) 19.50p +1.30%
Ricardo (RCDO) 616.50p +0.98%
Microgen (MCGN) 121.50p +0.62%
FTSE TechMARK - Fallers
Phoenix IT Group (PNX) 141.00p -3.75%
Electronic Data Processing (EDP) 70.50p -1.40%
Oxford Biomedica (OXB) 2.71p -0.73%
BATM Advanced Communications Ltd. (BVC) 18.12p -0.68%
Vectura Group (VEC) 109.50p -0.45%
Optos (OPTS) 156.00p -0.16%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) 179.72 -0.04% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks fall after weak UK manufacturing data - UK manufacturing index falls
- US manufacturing survey improves
- Federal Reserve officials sound more eager to taper
- Euro/dollar falls on interest rate cut speculation
- Italian coalition to last until 2015, says PM Letta
FTSE 100: -0.05%
DAX: -0.38%
CAC 40: -0.69%
FTSE MIB: -0.97%
IBEX 35: -0.74%
Stoxx 600: -0.34%
European equities ended the week lower following disappointing UK manufacturing data.
The UK manufacturing sector purchasing managers index (PMI) slipped to 56 in October from a revised reading of 56.3 in September, missing the 56.4 forecast. A reading above 50 signals expansion.
"Nevertheless, the index was still significantly above the long-run average of 51.3 and is consistent with a solid pace of expansion similar to what it experienced during the revival of manufacturing in 2010-11," according to Barclays.
In the US, the Institute for Supply Management's factory index climbed to 56.4 in October, the highest since April 2011, from 56.2 a month earlier. It exceeded the consensus for a reading of 55.
Earlier the US Markit manufacturing PMI nudged higher to 51.8 in October, after a reading of 51.1 in the prior month. Economists had pencilled in a reading of 51.1.
The data came as investors speculated on when the Federal Reserve will begin tapering stimulus. Many economists don't expect the Fed to begin scaling back its quantitative easing until March 2014 but some took the central bank's statement this week to mean it could begin by as early as December even.
The President of the Federal Reserve bank of Philaldelphia, Charles Plosser, today indicated that he is worried about the eventual exit of the central bank from quantitative easing. He argued in favour of setting a limit on the size which the Feds balance sheet is allowed to reach.
His peer, President of the Federal Reserve bank of St. Louis, James Bullard, suggested today that the Fed wants to see further improvement in the labour market before tapering.
In China, manufacturing activity rose to the highest level in 18 months. The PMI increased to 51.4 in October from 51.1 a month earlier, the National Bureau of Statistics and China Federation of Logistics and Purchasing revealed. It beat analysts' estimates for a reading of 51.2.
However, the news gave investors some cause for concern because although it climbed, there was in fact a significant gap between big and small manufacturers, with the smaller companies experiencing a contraction in the four-week period.
Euro falls on interest rate cut speculation
The euro fell, heading for its biggest weekly decline against the dollar since February, on speculation that slowing inflation will prompt the European Central Bank to cut interest rates.
The ECB may cut rates next week after data yesterday showed region's inflation plunged to an unexpected 0.7% in October, a four year low, according to Bank of America , UBS and Royal Bank of Scotland.
The euro was down 0.71% to $1.3488.
Italy's Letta sees government lasting until 2015
Italian Prime Minister Enrico Letta has said his government could last until 2015 despite instability within the coalition.
"We won a very complex battle: from October 2nd we have more strength and I am looking to the future with confidence," Letta told daily La Stampa.
His remarks come ahead of a Senate vote this month on whether to expel Silvio Berlusconi from parliament following a conviction for tax fraud.
In other European news, almost half of British businesses think the cost of complying with single-market regulation outweighs the benefits of being inside the European Union (EU), according to a YouGov poll.
Barclays, RBS
Barclays slumped following news it suspended six traders following an internal investigation into manipulating the foreign exchange market.
Royal Bank of Scotland fell after reporting a third-quarter loss and saying it expects a "substantial" group loss for the full year. The company also announced it would create an internal bad bank where it will put its toxic loans which analysts at Investec said would trigger 4-4.5bn of "accelerated and increased" impairments.
Vodafone jumped in the wake of a report that AT&T executives are in talks for a potential takeover of the telecoms business.
Meggitt declined after the provider of wheels and brakes for military aircraft cut its full-year sales forecast due to production issues.
Pandora advanced after the Danish jeweller raised its full-year sales forecast to 8.6bn kroner.
Renault fell after Nissan downgraded its guidance for net income of 355bn yen in the year ending March 31st, compared with its previous estimate of 420bn yen.
ASM International, the society for materials scientists and engineers, rallied as it reported third-quarter sales that beat forecasts.
Brent crude futures fell $1.615 to $107.110 per barrel on the ICE. |
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| | US Market Report | | US open: Stocks rise as US manufacturing expands US stocks rose as two separate reports showed manufacturing activity grew in October.
The Institute for Supply Management’s factory index climbed to 56.4 in October, the highest since April 2011, from 56.2 a month earlier. It exceeded the 50 reading that signals expansion and a forecast of 55.
Earlier the US Markit manufacturing sector purchasing managers´ index (PMI) nudged higher to 51.8 in October, after a reading of 51.1 the prior month. Economists had pencilled in a reading of 51.1.
The data came as investors speculated on when the Federal Reserve will begin tapering stimulus.
The Fed on Wednesday said it would maintain its monthly $85bn bond buying programme.
Many economists don’t expect the Fed to begin scaling back its quantitative easing until March 2014 but some took the central bank’s statement this week to mean it could begin as early as December.
This morning the President of the Federal Reserve bank of Philaldelphia - Charles Plosser – indicated that he is worried about the eventual exit of the central bank from quantitative easing. He argued in favour of setting a limit on the size which the Fed´s balance sheet is allowed to reach.
His peer, President of the Federal Reserve bank of St. Louis, James Bullard, suggested today that the Fed wants to see further improvement in the labour market before tapering.
"To the extent that key labour market indicators continue to show cumulative improvement, the likelihood of tapering asset purchases will continue to rise,” he said.
Fed officials Narayana Kocherlakota and Jeffrey Lacker were also due to speak today.
On the company front, oil giant Chevron has unveiled weaker than expected quarterly profits of $2.57 per share.
First solar shares are rallying 8% after the compajny revealed that quarterly net income improved to $1.94 per share versus $1 a year back, that was comfortably more than double than analysts´ estimates.
Insurer AIG is down after reporting that premium income at its property-casualty division decreased by 3.7% in the third quarter to $8.43bn.
Crude futures fall
Front month West Texas crude futures fell by $1.399 to 95.050 per barrel on the NYMEX.
Ten-year Treasury bond yields rose by 0.04 basis points to 2.60%. |
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| | Broker Tips | | Broker tips: RBS, Royal Dutch Shell, Wetherspoon Investec has recommended a 'sell' rating for Royal Bank of Scotland (RBS) after reporting a third quarter loss.
"Another results day, another grim wake-up call," Investec said.
"The Q3 2013 numbers reveal a plunge back into the red: Attributable Loss -826m (Q1: +393m, Q2: +142m) and Q4 will be much much worse (a 38bn 'internal bad bank' triggers impairment acceleration of 4-4.5bn in Q4), and we still expect IRHP top-ups, bank levy etc). RBS is on a punchy 0.9 times core profit before tax (1.3bn) in-line; Non-Core losses spiked to 0.8bn. Sell."
Nevertheless, the broker said it was enthusiastic for the recent appointment of new Chief Executive Ross McEwan and was encouraged by the company's return to net loan growth (+0.5bn) in UK Retail and modest net interest margin recovery.
Investec, quoting Oscar Wilde, downgraded Royal Dutch Shell from buy to hold and lowered its target by 10%.
Analyst Neill Morton trimmed his earnings per share forecasts 2-3% but slashed his target by 10% as he no longer sees Shell achieving a sector price-to-earnings ratio premium over the next 12 months.
He said he was "not particularly bothered" Shell would probably not achieve its $200bn cash-flow target for 2012-15 and was also "unsurprised" about the $5bn increase in Shell's net spend in 2013, but was "less comfortable" with implied net disposal figure of $15bn for 2014-15 as he predicted "magpie-like" Shell would be unable to resist "bright, shiny" investment projects.
Quoth Morton: "Oscar Wilde famously declared that 'fashion is a form of ugliness so intolerable that we have to alter it every six months'. Shell would certainly agree. It is still clinging to its cash flow and net capex targets for 2012-15, even though they appear less and less achievable. We are ashamed to say we regard ourselves as being a bit trendier than Shell and downgrade to hold."
Panmure has reiterated its buy recommendation on pub group Wetherspoon ahead of first quarter results on November 6th, with a 806p target implying around 11 per cent potential upside.
Analyst Simon French said he expected an upbeat sales performance reflecting longer food service hours.
Wetherspoons' new food menu has led to an extension of food serving hours to 11pm following a successful trial.
French suspects this may dilute like-for-like profit initially but the long-term impact "will prove another successful strategic move at a time of ongoing flux amongst the competition". | | |
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