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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 slightly lower after data-heavy week - FTSE down seven points, 19 on the week
- German GDP in-line
- Former Co-op Bank Chairman arrested
- TUI sinks on share sale
- AstraZeneca rises on recommendation from EMA
techMARK 2,642.04 +0.25%
FTSE 100 6,674.30 -0.11%
FTSE 250 15,187.68 +0.26%
The final session of the week saw the FTSE end seven points lower, down 19 points over the five-day period.
Investors have had a good deal of data to process since Wednesday, and had to balance yesterday's better-than-expected US weekly jobless claims report with minutes from the latest Federal Reserve meeting, which revealed members had continued to support the idea of winding down bond purchases in the "coming months".
Today revealed German gross domestic product (GDP) increased 0.6% in the third quarter, at the same rate of growth as the previous period, driven by domestic demand in construction and investment which offset a slump in exports.
Separately, but also in Europe's biggest economy, the Ifo institute's business climate index, based on a survey of 7,000 executives, increased to 109.3 in November from 107.4 in October, exceeding the 107.7 forecast. The data signalled that the recovery in Germany's economy remains on track despite a nascent recovery in the euro-area.
Today's biggest headlines included the arrest of disgraced Paul Flowers, the former chairman of the Co-op Bank, in connection with recent allegations he purchased and used illegal drugs.
Also, fuel prices have continued to fall, according to the AA, meaning the amount spent at the pump is at its lowest level in two and a half years. Petrol now costs an average of 130.44 a litre, compared to 132.16p last month.
TUI Travel sinks as Norwegian investor sells up
TUI Travel shares have come off recent highs after Norwegian investor John Fredriksen sold off his 5.4% stake in the group - although he upped his stake in its parent company to over 20%.
Shares in biopharmaceutical business AstraZeneca received a boost this afternoon after the company, alongside sector peer Bristol-Myers Squibb, announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) had recommended approval of Xigduo, a treatment for adult type two diabetic patients.
Tullow Oil was also higher after it reported a fifth oil discovery onshore northern Kenya. The Agete-1 exploration well, in which Tullow has a 50% interest, has an estimated 100 metres of net oil pay in good quality sandstone reservoirs. The group also reported that elsewhere in Kenya, exploration and appraisal activities continued to accelerate with the Amosing-1 well expected to commence drilling before the end of November.
Scandal-hit services company Serco Group saw its share price rise after it was announced its head of UK and Europe, Jeremy Stafford, was to quit. |
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| FTSE 100 - Risers
Whitbread (WTB) 3,483.00p +2.99%
ARM Holdings (ARM) 991.00p +2.80%
Persimmon (PSN) 1,221.00p +2.00%
Johnson Matthey (JMAT) 3,268.00p +1.81%
WPP (WPP) 1,371.00p +1.71%
Standard Life (SL.) 350.50p +1.48%
GKN (GKN) 372.70p +1.47%
Travis Perkins (TPK) 1,796.00p +1.41%
Marks & Spencer Group (MKS) 496.00p +1.39%
AstraZeneca (AZN) 3,446.50p +1.35%
FTSE 100 - Fallers
TUI Travel (TT.) 359.00p -7.78%
Vedanta Resources (VED) 895.00p -3.03%
Fresnillo (FRES) 840.50p -2.66%
Aberdeen Asset Management (ADN) 475.40p -2.38%
BHP Billiton (BLT) 1,876.00p -1.75%
Rio Tinto (RIO) 3,194.00p -1.62%
Weir Group (WEIR) 2,136.00p -1.25%
Tate & Lyle (TATE) 794.00p -1.24%
United Utilities Group (UU.) 666.00p -1.11%
Lloyds Banking Group (LLOY) 74.62p -1.11%
FTSE 250 - Risers
Centamin (DI) (CEY) 47.31p +6.75%
Bank of Georgia Holdings (BGEO) 2,256.00p +4.16%
Chemring Group (CHG) 194.40p +3.96%
Essar Energy (ESSR) 100.60p +3.60%
St. Modwen Properties (SMP) 346.20p +3.50%
IP Group (IPO) 158.20p +3.40%
888 Holdings (888) 158.70p +3.12%
SIG (SHI) 216.30p +3.10%
Galliford Try (GFRD) 1,108.00p +3.07%
Debenhams (DEB) 96.85p +3.03%
FTSE 250 - Fallers
Telecom Plus (TEP) 1,829.00p -4.49%
Thomas Cook Group (TCG) 148.40p -3.82%
Kenmare Resources (KMR) 18.85p -3.68%
UDG Healthcare Public Limited Company (UDG) 294.00p -3.32%
COLT Group SA (COLT) 125.70p -3.23%
CSR (CSR) 478.70p -2.82%
Rathbone Brothers (RAT) 1,499.00p -2.66%
Partnership Assurance Group (PA.) 309.00p -2.52%
PayPoint (PAY) 1,048.00p -2.51%
Carpetright (CPR) 585.50p -2.42%
FTSE TechMARK - Risers
Skyepharma (SKP) 119.50p +4.37%
Wolfson Microelectronics (WLF) 146.50p +2.81%
Vectura Group (VEC) 105.00p +2.69%
Oxford Biomedica (OXB) 2.42p +2.11%
Torotrak (TRK) 25.00p +1.52%
BATM Advanced Communications Ltd. (BVC) 17.75p +1.43%
Consort Medical (CSRT) 895.00p +1.13%
Phoenix IT Group (PNX) 142.25p +0.89%
Ricardo (RCDO) 595.00p +0.76%
SDL (SDL) 259.00p +0.10%
FTSE TechMARK - Fallers
XP Power Ltd. (DI) (XPP) 1,515.00p -4.05%
Sepura (SEPU) 125.00p -3.10%
Anite (AIE) 84.75p -2.87%
RM (RM.) 108.00p -2.81%
Promethean World (PRW) 19.50p -2.50%
E2V Technologies (E2V) 159.25p -1.85%
Gresham Computing (GHT) 122.00p -1.61%
Vislink (VLK) 46.50p -1.06%
Kofax (KFX) 372.00p -0.93%
Optos (OPTS) 157.00p -0.16% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed on German data, Eurozone deflation fears - German GDP grows
- German business confidence rises
- ECB's Draghi warns of deflationary risks
- Eurozone considers cheap loans to governments
FTSE 100: -0.11%
DAX: 0.25%
CAC 40: 0.58%
FTSE MIB: -0.10%
IBEX 35: 0.81%
Stoxx 600: 0.11%
European stocks were little changed as investors weighed upbeat German data and remarks from the European Central Bank's (ECB) Mario Draghi on deflationary risks.
Germany's gross domestic product (GDP) increased 0.6% in the third quarter, at the same rate of growth as the previous period and in line with analysts' expectations.
Economic growth was driven by domestic demand in construction and investment which offset a slump in exports.
Separately, the Ifo institute's business climate index, based on a survey of 7,000 executives, increased to 109.3 in November from 107.4 in October, exceeding the 107.7 forecast.
The data signalled that the recovery in Germany's economy remains on track despite a nascent recovery in the euro-area.
Capital Economics said "the evidence suggests that the German economy continues to expand at a reasonable pace compared to its neighbours, particularly France".
"But it's not strong enough to drive a decent upturn across the currency union as a whole or to drag the weaker peripheral countries out of recession."
Meanwhile, ECB President Draghi on Friday said the Eurozone faces deflationary pressures and insisted that interest rates must remain low due to a stagnant economic recovery.
"I understand the concerns about a prolonged period of low returns on savings," he told the European Banking Congress in Frankfurt.
"But it is important to understand that interest rates are low because the economy is weak."
The ECB this month lowered its benchmark interest rate to 0.25% from 0.50% after inflation dipped to 0.7%, well below the bank's target of just under 2%.
Eurozone considers cheap loans
The Eurozone is considering cheap loans to governments as an incentive to undertake structural reforms, according to an European Union document obtained by Reuters today.
The loans would be part of so-called contractual arrangements with economic reform targets and macroeconomic milestones that prompt the pay-out of tranches of the agreed loan.
The loans would carry an interest rate lower than the one a government could get on the market.
AstraZeneca, TUI Travel
AstraZeneca received a boost today after the biopharmaceutical company, alongside sector peer Bristol-Myers Squibb, announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) had recommended approval of Xigduo, a treatment for adult type two diabetic patients.
TUI Travel slumped after major shareholder and Norwegian shipping magnate John Fredriksen sold his 5.4% take at 366p, valuing it at £220m.
Rhoen-Klinikum AG declined after saying its second-biggest shareholder B. Braun Melsungen AG sued to block the sale of 43 clinics to Fresenius SE's Helios unit.
Euro strengthens against dollar
The euro rose 0.28% to $1.3520 following the positive economic data released in Germany on economic growth and business confidence.
Brent crude was up $0.650 to $110.800 per barrel, according to ICE data. |
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| | US Market Report | | US open: Traders square positions ahead of Thanksgiving - Goldman Sachs sees GDP growing up to 3.5 per cent in 2014
- Citi sees no rebound in gold prices next year
- Vince Holdings soars 52 per cent in stock market debut
Dow Jones Industrials: 0.06%
Nasdaq Composite: 0.32%
S&P 500: 0.18%
US stock indices continued to grind higher following positive unemployment data on Thursday and as traders squared their books ahead of next week's Thanksgiving Day holiday.
Jobless claims fell to their lowest level since September, down by 21,000 to a seasonally adjusted 323,000 for the week ended November 16th, the Labor Department revealed yesterday.
The consensus estimate had been for a print of 335,000.
In other US economic news, speaking on CNBC the President of the Federal Reserve bank of Atlanta, Dennis Lockhart, said he fully expects to talk about the possibility of tapering in the upcoming meetings.
Federal Reserve policymakers are turning to economic indicators to gauge whether the US is ready for a tapering of the central bank’s monthly $85bn bond buying programme.
Richmond Fed President Jeffrey Lacker said yesterday it would be appropriate for the Fed to start scaling back its asset purchases between December and March while President of the St. Louis Federal Reserve Bank, James Bullard, said accommodative bond-buying should continue despite possible inflation because there are no signs of price rises so far.
On today’s agenda, Kansas City Fed President Esther George is due to give a speech, potentially offering further clues on the central bank’s next move.
United Continental Holdings, Intel, Biogen
United Continental Holdings advanced after billionaire David Tepper said that his “big play in the market” is airlines and after Goldman Sachs lifted its rating on the world’s biggest airline to a ‘buy’ from ‘neutral.’
Intel Corp. predicted that the personal-computer market, as measured by units, will be down in the ‘low single-digit’ per cent range next year.
Foot Locker Inc. gained after it posted higher-than-estimated third quarter earnings.
Ross Stores declined after the retailer of discount designer wear reduced its fourth-quarter earnings forecast.
Pandora Media Inc. slumped after reporting a third-quarter loss.
Time Warner Cable rose on take-over speculation.
Biogen Idec drug Tecfidera was designated as a “new active substance” by European Union.
Treasury yields slip lower
The 10-year US government yield was down by two basis point to 2.76%.
West Texas Intermediate crude futures gave back some of the previous day’s bounce, falling by 1.07% to the $94.43 per barrel on the NYMEX.
S&P 500 - Risers
Biogen Idec Inc. (BIIB) $277.39 +9.89%
Time Warner Cable Inc. (TWC) $129.40 +7.07%
Cablevision Systems Corp. (CVC) $15.76 +5.63%
Autodesk Inc. (ADSK) $45.58 +4.71%
Gilead Sciences Inc. (GILD) $74.59 +4.13%
Yum! Brands Inc. (YUM) $77.40 +3.31%
Celgene Corp. (CELG) $163.38 +3.01%
Comcast Corp. (CMCSA) $48.73 +2.70%
Regeneron Pharmaceuticals Inc. (REGN) $282.92 +2.36%
Juniper Networks Inc. (JNPR) $20.51 +1.91%
S&P 500 - Fallers
Ross Stores Inc. (ROST) $73.62 -8.27%
Intel Corp. (INTC) $24.25 -3.88%
Abercrombie & Fitch Co. (ANF) $33.69 -3.67%
Gap Inc. (GPS) $40.75 -2.65%
Nucor Corp. (NUE) $51.65 -2.64%
United States Steel Corp. (X) $26.45 -2.58%
Cameron International Corp. (CAM) $54.77 -2.28%
Electronic Arts Inc. (EA) $22.90 -2.10%
J.C. Penney Co. Inc. (JCP) $8.98 -2.02%
Cliffs Natural Resources Inc. (CLF) $25.90 -2.01%
Dow Jones I.A - Risers
Boeing Co. (BA) $135.16 +1.68%
Nike Inc. (NKE) $78.71 +0.79%
Wal-Mart Stores Inc. (WMT) $79.32 +0.58%
General Electric Co. (GE) $27.05 +0.52%
Travelers Company Inc. (TRV) $89.59 +0.41%
Merck & Co. Inc. (MRK) $48.80 +0.37%
Microsoft Corp. (MSFT) $37.49 +0.24%
Caterpillar Inc. (CAT) $82.31 +0.23%
Walt Disney Co. (DIS) $70.09 +0.21%
International Business Machines Corp. (IBM) $184.49 +0.19%
Dow Jones I.A - Fallers
Intel Corp. (INTC) $24.25 -3.88%
Home Depot Inc. (HD) $79.13 -0.88%
Goldman Sachs Group Inc. (GS) $166.16 -0.54%
AT&T Inc. (T) $35.11 -0.54%
Chevron Corp. (CVX) $122.83 -0.51%
Coca-Cola Co. (KO) $40.29 -0.35%
Verizon Communications Inc. (VZ) $50.22 -0.32%
Cisco Systems Inc. (CSCO) $21.40 -0.31%
American Express Co. (AXP) $83.70 -0.30%
3M Co. (MMM) $130.00 -0.27%
Nasdaq 100 - Risers
Biogen Idec Inc. (BIIB) $277.39 +9.89%
Autodesk Inc. (ADSK) $45.58 +4.71%
Gilead Sciences Inc. (GILD) $74.59 +4.13%
Celgene Corp. (CELG) $163.38 +3.01%
Comcast Corp. (CMCSA) $48.73 +2.70%
Liberty Media Corporation - Class A (LMCA) $148.49 +2.54%
Regeneron Pharmaceuticals Inc. (REGN) $282.92 +2.36%
Vertex Pharmaceuticals Inc. (VRTX) $67.40 +1.77%
Dollar Tree Inc (DLTR) $57.27 +1.76%
DIRECTV (DTV) $63.90 +1.65%
Nasdaq 100 - Fallers
Ross Stores Inc. (ROST) $73.62 -8.27%
Intel Corp. (INTC) $24.25 -3.88%
Tesla Motors Inc (TSLA) $119.63 -2.02%
Intuit Inc. (INTU) $71.75 -1.93%
Green Mountain Coffee Roasters Inc. (GMCR) $69.31 -1.79%
Whole Foods Market Inc. (WFM) $55.80 -1.20%
Sba Communications Corp. (SBAC) $84.48 -1.17%
Micron Technology Inc. (MU) $19.78 -1.05%
Equinix Inc. (EQIX) $159.12 -0.94%
Seagate Technology Plc (STX) $47.83 -0.83% |
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| | Broker Tips | | Broker tips: Antofagasta, Sainsbury, Serco Copper miner Antofagasta faces higher treatment and refining charges (TC/RCs) for 2014, and cost increases.
Yes, the balance sheet is strong, but the company will have to invest heavily for several years. As well, softening earnings will limit the scope for special dividends, explain analysts at Investec.
Recent settlements on TC/RCs are moving from around US$70/t and 7c/lb toward US$90/t and 9c/lb reflecting greater copper concentrate availability.
Applying higher charges reduces the broker's valuation to 716p from 737p adding around 5c/lb in cash costs, the South African broker said.
For all of the above reasons they decided on Friday to maintain their 'Sell' recommendation on the stock, describing the 15 times forward earnings multiple assigned to the shares as 'generous.'
Sainsbury's shares edged slightly lower after Credit Suisse reiterated its 'underperform' rating on the stock.
While the supermarket chain reported strong half-way figures last week, the broker warned of "only modest progress" in cash flow, margin and lease-adjusted returns, which are "most important to us in creating long-term shareholder value".
"And these KPI [key performance indicators] could worsen if LFL [like-for-like] momentum is not sustained."
Credit Suisse raised its target from 285 to 345p, saying it predicts shares will hold-up so long as it continues to outperform its UK rivals.
"The shares have outperformed recently which, given Sainsbury's recent H1 results and LFL/profit outperformance, is understandable," the analyst said.
"But, we think a further step-up in performance and some material operating leverage is now required to justify a price above our 'steady-state' 345p scenario. And, if the business weakens, we see downside below 345p."
Analysts at Credit Suisse today moved to raise their recommendation on shares of Serco to outperform from neutral on the back of the "apparently improving political and press sentiment over recent days" and the 17 per cent fall in its share price in the year-to-date.
In their opinion the decline in its share price means that the stock price has already absorbed most of the company's near-term challenges, while the firm is likely to remain a key long-term supplier to the central government and as such supporting the company's long term growth potential.
The Swiss broker highlighted how key recent events, such as the Public Accounts Committee hearing, reflects improving political sentiment towards Serco.
As regards potential near-term price catalysts, Credit Suisse pointed out that the UK government reviews should be completed by early December. Full year results are due in the first quarter of 2013, it added.
Their discounted cash flow-derived (DCF) price target remains at 500p.
"We think that at 430.7p the risk reward looks attractive with 20% downside to our bear case and 58% upside to our bull case.
At the current price Serco trades at 11.3 times 2014 estimates, representing a 28% discount to its historic median of 15.7 times," analysts Andy Grobler and Thomas Burlton said. | | |
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