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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: Ex-div stocks weigh as investors await Fed minutes -MPC warns of ‘uncertainties’ to recovery
- FOMC in focus ahead of minutes
- Ex-div stocks finish firmly lower
techMARK 2,626.20 -0.68%
FTSE 100 6,681.08 -0.25%
FTSE 250 15,178.75 -0.57%
UK markets finished firmly lower on Wednesday after a choppy session as investors adopted a cautious approach following comments from the Bank of England and ahead of details of the latest monetary policy meeting in the States.
Minutes from this month’s Monetary Policy Committee (MPC) released this morning showed that policymakers voted unanimously to maintain the Bank Rate at 0.5% and the stock of asset purchases at £375bn, as expected.
However, the MPC attempted to ease fears over a sooner-than-expected tightening in monetary policy as the minutes expressed “uncertainties over the durability of the recovery". The central bank reiterated that rates would be kept low until the unemployment rate reaches the 7% threshold, at which point policymakers would then reassess its stance.
The FTSE 100 finished 16.93 points lower at 6,681.08 despite the promise of continued low rates as a number of heavyweight stocks weighed on the index after going ex-dividend, meaning that from today investors won't be able to get their hands on the companies' latest payouts.
US markets opened in positive territory today after retail sales data for October painted a decent picture ahead of the key holiday shopping season. However, upside was limited with traders scaling back risk ahead of the Federal Open Market Committee’s October meeting will be released later this evening.
“It would appear that markets seem prepared to wait for the release of the most recent minutes of the Fed policy meeting for further clues as to the most recent deliberations on Fed rate policy,” said Michael Hewson, Chief Market Analyst at CMC Markets.
Telecom Plus advances; ex-div stocks fall
Utilities reseller Telecom Plus was a high riser today after agreeing to pay £218m to buy back two gas and electricity supply businesses from Npower which it sold in 2006. The announcement came as the firm delivered a 17% increase in revenues in the first half, as profits rose 10.1%.
Ex-div stocks were weighing on the FTSE 100 with Vodafone, Tate & Lyle, Next, Carnival and Sainsbury among the stocks trading without the right to their latest payouts.
Gold producers Randgold Resources, Centamin and African Barrick Gold finished sharply lower as precious metal prices declined.
Fund manager Aberdeen rose after analysts at Bank of America Merrill Lynch upgraded their rating on the stock from 'underperform' to 'neutral'.
Meanwhile, airline group easyJet was extending gains made yesterday after the company delivered a 51% increase in annual profits and unveiled an unexpected special dividend to shareholders.
BSkyB was higher after saying it wants to end its row with arch-rival BT over TV sports coverage with the group keen to do a wholesale deal allowing both to offer their customers the full range of live sports. |
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| | FTSE 100 - Risers
Aberdeen Asset Management (ADN) 492.00p +3.54%
easyJet (EZJ) 1,377.00p +2.38%
Travis Perkins (TPK) 1,748.00p +1.33%
Rio Tinto (RIO) 3,300.00p +1.26%
British Sky Broadcasting Group (BSY) 835.00p +1.21%
Pearson (PSON) 1,342.00p +0.98%
Aviva (AV.) 430.80p +0.89%
CRH (CRH) 1,580.00p +0.83%
London Stock Exchange Group (LSE) 1,584.00p +0.76%
Barclays (BARC) 252.60p +0.72%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 4,495.00p -2.73%
Amec (AMEC) 1,158.00p -2.20%
Vodafone Group (VOD) 227.20p -2.09%
Melrose Industries (MRO) 297.50p -2.07%
Vedanta Resources (VED) 951.00p -2.06%
SSE (SSE) 1,363.00p -1.87%
Persimmon (PSN) 1,163.00p -1.86%
Meggitt (MGGT) 497.50p -1.78%
Tate & Lyle (TATE) 807.00p -1.71%
Sainsbury (J) (SBRY) 404.80p -1.68%
FTSE 250 - Risers
Telecom Plus (TEP) 1,805.00p +19.77%
Diploma (DPLM) 700.00p +5.42%
Keller Group (KLR) 1,089.00p +3.91%
Dialight (DIA) 940.00p +3.30%
Alent (ALNT) 330.40p +3.25%
esure Group (ESUR) 237.90p +3.08%
Telecity Group (TCY) 692.00p +2.98%
NMC Health (NMC) 380.00p +2.70%
Rathbone Brothers (RAT) 1,573.00p +2.48%
Thomas Cook Group (TCG) 151.10p +2.44%
FTSE 250 - Fallers
Centamin (DI) (CEY) 46.73p -6.35%
African Barrick Gold (ABG) 181.00p -5.58%
Kenmare Resources (KMR) 20.00p -4.99%
TalkTalk Telecom Group (TALK) 265.00p -3.99%
Dunelm Group (DNLM) 860.00p -3.80%
Micro Focus International (MCRO) 775.00p -3.67%
Chemring Group (CHG) 191.40p -3.63%
ITE Group (ITE) 301.40p -3.55%
Spirent Communications (SPT) 102.00p -3.50%
Ashmore Group (ASHM) 375.00p -3.35% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed on US data, FOMC minutes - FOMC meeting minutes to be released
- US retail sales rise
- BoE policy decision unanimous, minutes reveal
- ECB considering mini deposit-rate cut
FTSE 100: -0.22%
DAX: 0.07%
CAC 40: -0.09%
FTSE MIB: -0.21%
IBEX 35: -0.83%
Stoxx 600: 0.10%
European stocks were mixed as investors waited on the release of the Federal Reserve’s meeting minutes and weighed US economic data.
The Federal Open Market Committee will release details of its October meeting later this evening as markets look for further details behind the central bank’s decision last month to keep monetary policy unchanged.
At the Fed’s latest meeting, it said it would maintain interest rates near zero and its monthly $85bn bond buying programme until a more sustainable pick up in the economy and jobs market.
“Market participants expect Federal Reserve policymakers to emphasise their reluctance to taper record bond purchases in the near future, with the majority of economists of the belief that the Fed will reduce the pace to $70bn - from $85bn – at their March 18th-19th meeting,” said Max Cohen, Trader at Spreadex.
Fed Chairman Ben Bernanke last night reiterated that any tapering of asset purchases remains dependent on incoming economic data, as he held back from shedding any light on the timetable for an impending withdrawal.
Ahead of the FOMC minutes was the release of US retail sales, which rose by 0.4% in October, compared with a flat reading the month before and a 0.1% increase expected by analysts. Growth was helped by a large increase in car and truck sales.
In other US economic data, the consumer-price index fell 0.1% month-on-month in October, surprising analysts who had expected no change from September. This compared with a 0.2% rise in consumer prices the month before.
Meanwhile, US existing-home sales figures showed a 3.2% drop last month, with declines accelerating from the 1.9% fall in September. The consensus forecast was for a 2.7% fall.
BOE minutes, ECB deposit rate
The BoE voted unanimously to keep its asset purchase programme at £375bn and said a record-low interest rate may be needed even after unemployment falls to the threshold set under forward guidance, according to minutes from the central bank’s meeting earlier this month.
“There were uncertainties over the durability of the recovery,” the Monetary Policy Committee (MPC) said in the minutes.
“With the proviso that medium-term inflation expectations remained sufficiently well anchored, the projections for growth under constant bank rate underlined there could be a case for not raising bank rate immediately when the 7% unemployment threshold was reached.”
The MPC has said that until joblessness hits 7% it will not even begin to consider raising the Bank Rate.
In the neighbouring bloc, the European Central Bank (ECB) is reportedly considering a mini deposit-rate cut if officials decide to take it negative for the first time, sources told Bloomberg.
Policy makers would cut the rate for commercial lenders who park excess cash at the ECB to -0.1% from zero, the sources added.
Serco, GSK
Metro’s shares jumped after Barclays upgraded Germany’s biggest retailer to ‘overweight’ from ‘equal weight’, citing the potential sale of a Russian operation.
GlaxoSmithKline rose after completing the partial sale of Aspen Pharmacare, raising gross proceeds of 7.06bn South African rand ($695m).
Diageo declined after Chief Executive Officer Ivan Menezes said uncertainties in the global economy will hurt sales growth for the world’s biggest distiller.
Societe Television Francaise advanced after France beat the Ukraine to advance to the next year’s soccer World Cup.
Alcatel-Lucent dropped after Bank of America and JPMorgan Chase placed 660m preferential subscription rights to the company’s shares to institutional investors.
Euro falls against dollar
The euro dipped 0.63% to $1.3453.
Brent crude futures rose $0.835 to $107.820 per barrel on the ICE. |
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| | US Market Report | | US open: Stocks edge higher as retail sales beat forecasts - Markets await FOMC minutes
- Retail sales rose 0.4 per cent in October
- JC Penney leads retailers higher after upbeat outlook
Dow Jones: 0.01%
Nasdaq: 0.11%
S&P 500: 0.12%
US stock markets opened flat to slightly higher on Wednesday as traders acted cautiously ahead of the minutes of the Federal Open Market Committee (FOMC) meeting due out later on.
Providing some support to equities however was data showing that US retail sales rose by 0.4% in October, compared with a flat reading the month before and better than the 0.1% increase expected by the Street. Growth was helped by a large increase in car and truck sales.
The report will likely give confidence to retailers ahead of the crucial holiday shopping season as the government shutdown failed to deter shoppers from spending. Auto peers Ford and GM were making gains after the opening bell, along with retail bellwethers Best Buy and JC Penney, which the latter benefitting after its quarterly results.
In other economic data, the consumer-price index fell 0.1% month-on-month in October, surprising analysts who had expected no change from September. This compared with a 0.2% rise in consumer prices the month before.
Meanwhile, existing-home sales figures showed a 3.2% drop last month, with declines accelerating from the 1.9% fall in September. The consensus forecast was for a 2.7% fall.
The FOMC will release details of its October meeting later this evening as markets wait to hear about the central bank's decision to maintain its stimulus programme last month.
However, comments from Fed Chairman Ben Bernanke last night were in focus this morning after he reiterated that any tapering of asset purchases remains dependent on incoming economic data, as he held back from shedding any light on the timetable for an impending withdrawal.
JC Penney jumps despite bigger-than-expected loss
Retail group JC Penney surged early on despite missing forecasts with a wider-than-expected third-quarter loss, as Chief Executive Mike Ullman said he was “encouraged” by sales in the early weeks of November.
Shares in Lowe’s slumped after the retail home improvement firm reported third-quarter earnings that missed analysts’ estimates.
Internet giant Yahoo rallied following news the internet company is returning more cash to shareholders.
Deere advanced as the maker of agricultural equipment said fourth-quarter profit beat analysts’ forecasts. |
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| | Broker Tips | | Afren: Liberum Capital raises target from 197p to 232p and maintains a buy recommendation.
AstraZeneca: Berenberg cuts target from 3472p to 3430p reiterating a hold recommendation.
AVEVA Group: Liberum Capital reduces target from 2350p to 2250p and keeps its hold recommendation.
Avon Rubber: Investec ups target from 530p to 560p and reiterates a hold recommendation.
Barratt Developments: Barclays initiates with a target of 444.7p and an overweight rating.
Bellway: Barclays starts with a target of 1498.1p and an underweight rating.
Berkeley Group: Barclays initiates with a target of 2454.7p and an equal-weight rating.
Bodycote: Jefferies raises target from 605p to 710p and retains a buy recommendation.
Bovis Homes Group: Barclays starts with a target of 778.1p and an underweight rating.
Capita Group: Deutsche Bank takes target from 895p to 914p and reiterates a hold recommendation.
Crest Nicholson Holdings: Barclays increases target from 390p to 422.8p and maintains an overweight rating.
Diageo: Canaccord Genuity cuts target from 1950p to 1900p, while keeping its hold recommendation.
Electrocomponents: Deutsche Bank ups target from 285p to 310p, while downgrading to hold.
EnQuest: Liberum Capital moves target from 174p to 188p and maintains a buy recommendation.
Galliford Try: Barclays initiates with a target of 1200.lp and an equal-weight rating.
Grafton Group: Liberum Capital increases target from 508p to 600p and reiterates a hold recommendation.
Greggs: UBS lowers target from 490p to 480p leaving its buy recommendation unaltered.
Heritage Oil: Canaccord Genuity ups target from 288p to 310p retaining a buy recommendation.
Hyder Consulting: Numis raises target from 620p to 730p and reiterates a buy recommendation. Panmure Gordon downgrades from buy to hold with an unchanged target of 550p.
International Personal Finance: Canaccord Genuity upgrades from hold to buy with a target of 700p.
Intertek Group: Credit Suisse reduces target from 3600p to 3500p maintaining an outperform rating.
ITV: Nomura moves target from 200p to 210p maintaining a buy recommendation.
Kentz Corporation: Liberum Capital ups target from 610p to 650p and stays with its buy recommendation.
Melrose: UBS shifts target from 305p to 300p and keeps a neutral rating.
Persimmon: Barclays starts with a target of 1260.4p and an equal-weight rating.
Petrofac: Deutsche Bank cuts target from 1450p to 1425p retaining a hold recommendation.
Redrow: Barclays initiates with a target of 356p and an overweight rating.
Renold: N+1 Singer upgrades to buy with an unchanged target of 53p.
Royal Mail: UBS initiates with a target of 450p and a sell recommendation. Barclays initiates with a target of 466p and an equal-weight rating.
Taylor Wimpey: Barclays starts with a target of 146.8p and an overweight rating. | | |
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