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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 gain on QE speculation, Vedanta drops - Stocks extend gains on US stimulus hopes
- US industrial production, NY manufacturing data misses forecasts
- Vedanta drops sharply after interim report
techMARK 2,649.29 0.00%
FTSE 100 6,693.44 +0.41%
FTSE 250 15,246.58 -0.07%
Markets ended Friday’s session with decent gains as investors continued to show optimism over a continuation of accommodative monetary policy from the Federal Reserve.
Soon-to-be Fed Chairwoman Janet Yellen, who is due to take over from Ben Bernanke in January, said yesterday that the US economy is still performing "far short of [its] potential" and that the central bank must “do what we can to promote a strong economic recovery”.
The comments pushed the Dow Jones Industrial Average and S&P 500 to record highs last night, with both indices extending gains after the opening bell today. In London, the FTSE 100 finished today’s session up 27.31 points at 6,693.44, a rise of 0.41%.
Economic data from the States today showed that nationwide industrial production unexpectedly fell in October and manufacturing activity in the New York region contracted in November, which will likely throw more weight behind the argument for the Fed to maintain stimulus.
“Equity markets are holding onto hope that the US Federal Reserve's bond-buying scheme will remain unchanged for a few more months at least,” said David Madden, Market Analyst at IG.
The final revision of Eurozone inflation data for October was in focus this morning following last week's rate cut by the European Central Bank. As expected, consumer prices rose at an annual rate of 0.7%, in line with the initial estimate. Nevertheless, this was still a sharp unexpected drop from a rate of 1.1% the month before.
Vedanta slumps as first-half sales drop
Mining group Vedanta Resources dropped sharply lower as investors reacted to a 17% drop in first-half revenue to $6.2bn on the back of falling commodity prices. Other in the sector including Fresnillo, Antofagasta and Anglo American were making gains, along with oil producers Shell and Petrofac.
Shares in Centrica extended yesterday's declines which came after it warned market conditions remained challenging as it reduced its full-year forecasts. Credit Suisse cut its target and reiterated its 'underperform' rating for the British Gas owner, saying there are “no major positives in sight”.
IAG was trading in the red despite lifting its profit guidance for 2015, helped by improving margins at British Airways and the ongoing recovery of Spanish airline Iberia. The firm is now targeting a €1.8bn operating profit in 2015, up 12.5% from its previous €1.6bn forecast. The stock was down nearly 3% the close, though this follows a near-100% surge since the start of the year.
BAE, Rolls-Royce and Meggitt were dragged lower by negative readacross from defence peer Ultra Electronics, which warned that revenue for 2013 would be slightly below the previous year's due to “headwinds” in the US government-funded market in addition to other delays |
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| | FTSE 100 - Risers
Fresnillo (FRES) 941.50p +2.90%
Mondi (MNDI) 1,019.00p +2.31%
easyJet (EZJ) 1,265.00p +2.26%
Royal Dutch Shell 'A' (RDSA) 2,095.00p +2.10%
Royal Dutch Shell 'B' (RDSB) 2,185.50p +2.01%
RSA Insurance Group (RSA) 104.50p +1.95%
TUI Travel (TT.) 388.40p +1.92%
Aberdeen Asset Management (ADN) 426.80p +1.81%
ARM Holdings (ARM) 944.00p +1.56%
InterContinental Hotels Group (IHG) 1,868.00p +1.52%
FTSE 100 - Fallers
Vedanta Resources (VED) 955.50p -6.69%
International Consolidated Airlines Group SA (CDI) (IAG) 362.20p -2.90%
CRH (CRH) 1,591.00p -1.61%
Meggitt (MGGT) 505.00p -1.37%
Sainsbury (J) (SBRY) 409.00p -1.35%
Melrose Industries (MRO) 306.10p -1.32%
Wolseley (WOS) 3,264.00p -1.24%
BAE Systems (BA.) 449.00p -1.14%
National Grid (NG.) 774.00p -0.96%
G4S (GFS) 254.60p -0.93%
FTSE 250 - Risers
Genus (GNS) 1,297.00p +3.93%
Pace (PIC) 305.00p +3.39%
Telecity Group (TCY) 663.00p +3.27%
Capital & Counties Properties (CAPC) 333.00p +2.75%
Atkins (WS) (ATK) 1,313.00p +2.58%
Edinburgh Dragon Trust (EFM) 267.70p +2.49%
NMC Health (NMC) 372.00p +2.42%
Oxford Instruments (OXIG) 1,495.00p +2.33%
Fidelity China Special Situations (FCSS) 103.40p +2.17%
Schroder Asia Pacific Fund (SDP) 247.10p +2.11%
FTSE 250 - Fallers
Xaar (XAR) 960.00p -5.42%
Perform Group (PER) 435.70p -5.28%
BTG (BTG) 433.50p -4.24%
Ultra Electronics Holdings (ULE) 1,816.00p -4.22%
Redrow (RDW) 264.00p -3.51%
Rank Group (RNK) 141.00p -3.36%
Rotork (ROR) 2,806.00p -3.04%
Amlin (AML) 434.80p -2.88%
Hochschild Mining (HOC) 142.00p -2.74%
Essar Energy (ESSR) 105.40p -2.68% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks rise after Eurozone and US data - Eurozone inflation falls
- US industrial output declines
- US manufacturing production rises
- Lawmakers vote on US health care bill
- EU clamps down on spending plans
FTSE 100: 0.41%
DAX: 0.21%
CAC 40: 0.19%
FTSE MIB: -0.39%
IBEX 35: -0.13%
Stoxx 600: 0.18%
European stocks ended the week little changed following a batch of mixed economic data including Eurozone inflation and US industrial and manufacturing reports.
Eurostat confirmed today that the annual rate of Eurozone inflation was 0.7% last month, down from September’s 1.1%.
The sharp fall in inflation prompted the European Central Bank (ECB) to reduce its benchmark interest rate to 0.25% from 0.50%.
In the US, industrial production slipped by 0.1% in October compared to a rise of 0.2% in September and a consensus forecast of 0.2% gain, according to the latest figures out from the Federal Reserve.
Manufacturing output, on the other hand, rose 0.3% last month, up from September’s 0.2% jump, beating expectations for a 0.1% increase.
The data follows Janet Yellen’s Federal Reserve Chair nomination hearing before the Senate Banking Committee yesterday when she said the economy needs to improve before the central bank starts scaling back monetary stimulus.
Also in the US, lawmakers were due to vote on a bill today that would allow Americans to keep their existing health coverage through 2014 without penalties.
The White House has argued that the proposal would undermine the Affordable Care Act by allowing insurance companies to continue to sell health coverage that does not meet the higher standard of President Barack Obama’s healthcare law.
However, a number of Democrats have warned the White House that they may support the measure if the Administration does not provide a strong alternative argument.
EU cracks down on budget plans
The European Union (EU) has cracked down on the euro-area’s biggest economies over their budget plans next year.
EU Economic and Monetary Affairs Commissioner Olli Rehn said the spending plans of euro-area countries including German, Spain and France “still do not pay sufficient attention” to fiscal consolidation.
“Continued progress with sound public finances should be supported by growth-friendly structural measures,” he told reporters in Brussels today, according to Bloomberg.
Meanwhile, Germany has reiterated its opposition to the European Commission’s proposal for setting up a single system for handling euro-area banks.
Ministers have set out competing positions on who should be the ultimate decision-maker in the planned Single Resolution Mechanism, which would centralise interventions at stricken banks.
Publicis, Vivendi, Serco
Publicis Groupe gained after advertising peer WPP dismissed a report that it may bid for US ad company Group of Cos.
Vivendi rallied after reporting third-quarter profit that beat estimates and revealing plans to spin off its French phone carrier SFR by July 2014.
Service provider Serco advanced after UBS upgraded its rating on the stock to ‘buy’ from ‘neutral’, citing valued for money.
Safran slumped as the French government, its biggest stakeholder, sold a 4.7% stake, in the manufacturer.
Julius Baer Group declined after saying the bank’s gross margin narrowed at the end of October amid lower trading activity.
Koninklijke Boskalis Westminster NV was higher after the Dutch dredging company raised its full-year net income forecast.
Brent crude falls
Brent crude futures dipped $0.194 to $108.070 per barrel on the ICE.
The euro was up 0.15% to $1.3481. |
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| | US Market Report | | US open: House vote on Obamacare due - House vote on modifications to Obamacare due
- Some Democtrats may support Republican sponsored House bill
- Barclays third quarter US GDP tracking estimate rises on inventory data
Dow Jones Industrials: 0.23%
Nasdaq Composite: 0.06%
S&P 500: 0.13%
US stock futures were climbing slightly higher following the release of another batch of mixed economic indicators and ahead of an important vote in the House of Representatives that could modify Obamacare.
A vote is scheduled Friday in the Republican-controlled lower chamber of the US Congress on a bill that would modify President Obama´s landmark healthcare initiative. Amongst other things it would allow people who cannot switch their health coverage to remain with their existing providers, given the shortcomings of the White House´s new legislation. While the White House has argued such legislation could undermine Obamacare some Democrats seem inclined to support passage given how some recent poll ratings have turned against the President.
Industrial production in the US slipped by 0.1% in October, according to the latest figures out from the Federal Reserve, that was lower than the 0.2% gain which had been forecast.
However, Barclays Research pointed out how the decline in motor vehicles (1.3%) was more than offset by gains in other durable goods components, including computer and electronics (0.7%) and furniture (1.5%), alongside a 0.3% increase in non-durable goods production.
Hence, the data is stronger than at first meets the eye.
Wholesale inventories gained at a 0.4% clip over the month in September, as expected, and the previous month´s figures were revised higher.
Barclays Research´s third-quarter tracking estimate for US gross domestic product growth has moved up several notches following Friday´s data on wholesale inventories, to a 3.1% annualised rate from 2.6% just yesterday.
Investors are turning to economic data to measure the health of the economy and weigh whether the Fed will begin tapering at its next meeting in December.
At her nomination hearing before the Senate Banking Committee yesterday, Janet Yellen said the economy and labour market needed to improve more before the Fed begins scaling back monetary stimulus.
Yellen, who is to replace Ben Bernanke as head of the Fed in January, said that the central bank's quantitative easing programme has made a "meaningful contribution to economic growth”.
“Given that she is a well known dove, the message was clear, even if she didn’t actually explicitly say it,” said Alpari UK analyst Craig Erlam.
“There will be no tapering in December, the recovery is fragile and still needs the full support of the Fed.”
In company news, Exxon Mobil Corp. advanced after Warren Buffett’s Berkshire Hathaway Inc. disclosed a stake in the oil firm.
Interpublic Group of Cos. declined after WPP disputed claims it was planning a takeover.
10-year government yields were up two basis points to 2.71%.
West Texas Intermediate crude futures climbed 0.38% to $94.12 per barrel on the NYMEX. |
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| | Amlin: Berenberg raises target from 398p to 434p, but still recommends selling. Barclays cuts target from 481p to 453p and retains an overweight rating.
Antofagasta: Numis raises target from 750p to 850p and reiterates a hold recommendation.
AstraZeneca: Liberum Capital upgrades to buy with a target of 3500p.
Atkins (WS): JP Morgan increases target from 1348p to 1390p, while keeping an overweight rating. Numis upgrades from hold to add with a target of 1475p.
BBA Aviation: JP Morgan moves target from 347p to 356p retaining an overweight rating. UBS raises target from 280p to 340p and reiterates a neutral rating.
Beazley: Berenberg ups target from 227p to 258p and retains a hold recommendation.
Bioquell: Investec shifts target from 148p to 147p retaining a hold recommendation.
BTG: Deutsche Bank ups target from 475p to 500p and keeps a buy recommendation.
Cape: Numis downgrades from buy to hold with a target of 346p.
Carphone Warehouse: Citi takes target from 290p to 320p retaining a buy recommendation.
Catlin Group: Berenberg raises target from 544p to 577p maintaining a buy recommendation. Barclays reduces target from 637p to 598p, while leaving its overweight rating unchanged.
Centrica: Citi cuts target from 390p to 360p maintaining its neutral rating. JP Morgan lowers target from 375p to 355p and keeps a neutral rating. Credit Suisse moves target from 310p to 300p leaving its underperform rating unaltered.
Devro: JP Morgan lowers target from 367p to 357p reiterating an overweight rating.
Diageo: Nomura cuts target from 2300p to 2250p, while staying with its buy recommendation.
Electrocomponents: Numis ups target from 260p to 315p and keeps a hold recommendation.
Hargreaves Lansdown: JP Morgan initiates with a target of 1415p and an overweight rating.
Hellermann Tyton: JP Morgan increases target from 295p to 335p and maintains an overweight rating. Canaccord Genuity takes target from 295p to 330p and keeps a buy recommendation.
Hiscox: Berenberg increases target from 564p to 626p, but still recommends selling. Barclays cuts target from 590p to 556p and downgrades to underweight.
International Consolidated Airlines Group: Investec takes target from 320p to 400p and keeps a hold recommendation.
Intertek Group: JP Morgan reduces target from 3840p to 3212p and downgrades from overweight to neutral.
Ladbrokers: Alphavalue shifts target from 195.5p to 194.9p, while upgrading from reduce to add.
Lancashire Holdings: Berenberg takes target from 747p to 786p keeping a hold recommendation. Barclays reduces target from 801p to 638p downgrading to underweight.
Merlin Entertainment: Credit Suisse initiates with a target of 352p and a neutral rating.
Minera IRL: Numis moves target from 50p to 40p, while staying with its buy recommendation.
Ophir Energy: UBS raises target from 340p to 395p and maintains a neutral rating.
Prudential: Deutsche Bank raises target from 1290p to 1350p maintaining a buy recommendation.
Rolls-Royce Group: Alphavalue moves target from 1060.5p to 1066.4p, while downgrading from reduce to sell.
Rotork: Investec places both its target prev.: 2950p and its hold recommendation under review.
Royal Bank of Scotland: Numis cuts target from 400p to 374p and keeps an add rating.
RSA Insurance Group: Berenberg cuts target from 141p to 112p downgrading from buy to hold.
Sainsbury: Alphavalue lowers target from 351.4p to 349p and downgrades from reduce to sell.
Serco Group: Jefferies reduces target from 675p to 560p, while its buy recommendation is kept. Deutsche Bank cuts target from 630p to 440p and stays with its hold rating. JP Morgan reduces target from 646p to 544p maintaining an overweight rating. UBS lowers target from 580p to 480p, while downgrading from hold to buy. Credit Suisse cuts target from 600p to 500p staying with its neutral rating. Cantor Fitzgerald reduces target from 450p to 380p and retains a sell recommendation.
Shire: Deutsche Bank increases target from 3350p to 3850p retaining a buy recommendation.
Spirax-Sarco Engineering: Numis downgrades from add to hold with a target of 3200p.
Spirent Communications: Numis cuts target from 145p to 105p downgrading from buy to hold.
Talk Talk Telecom: Berenberg moves target from 195p to 200p, but still recommends selling.
Taylor Wimpey: Deutsche Bank ups target from 140p to 151p and reiterates a buy recommendation.
Telecity: Numis lowers target from 920p to 900p, while upgrading from hold to buy.
Thomas Cook Group: Investec cuts target from 185p to 155p and downgrades from buy to hold.
TUI Travel: Investec reduces target from 400p to 350p and downgrades from hold to sell.
Ultra Electronics Holdings: Investec cuts target from 2100p to 1960p and downgrades from buy to add.
UTV Media: Numis raises target to 288p and keeps a buy recommendation.
Wood Group: Canaccord Genuity ups target from 850p to 875p and maintains a hold recommendation. | | |
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