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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: Markets up after economic data, Lloyds rises - Economic data comes in broadly positive
- Global indices trading near record highs
- M&A speculation surrounds Lloyds, AMEC
techMARK 2,658.82 +0.35%
FTSE 100 6,649.47 +0.20%
FTSE 250 15,406.67 +0.66%
UK markets finished in positive territory on Wednesday as investors reacted to a flurry of economic data from home and away, with sentiment lifted as indices overseas continued to set new records.
The DAX in Frankfurt and the Dow Jones Industrial Average and S&P 500 in New York were all trading at or close to all-time highs, while the Nasdaq was reaching levels not seen in over 13 years during today's session.
"The FTSE has the feeling of an index being pulled along begrudgingly as it is dragged higher by the DAX, buoyed with improving sentiment and a more stable political scene. With US markets more concerned with the impending holiday [Thanksgiving], markets are happy to ease higher rather than move with any real purpose," said Alastair McCaig, Market Analyst at IG.
Stocks in London gave little reaction this morning to the confirmation of a pick-up in UK economic growth in the second quarter. The second estimate of UK gross domestic product (GDP) showed that the economy expanded by 0.8% during the three months through September, in line with the initial forecast and up from the 0.7% growth recorded in the second quarter.
On this score, Barclays Research's Blerina Uruci pointed out how without stock building British GDP growth would have actually come in flat for quarter three.
Meanwhile, data from the States showed an unexpected fall in jobless claims last week, along with better-than-expected readings on consumer confidence, Chicago manufacturing and the leading indicators composite index. Durable goods orders, however, fell in October due to a sharp pull-back in the volatile sectors of defence and aircraft.
Markets across Europe were given a lift today by the news that German Chancellor Angela Merkel's CDU party has managed to craft a 'grand coalition' with the Social Democrats after two months of negotiations. Meanwhile, former Italian Prime Minister Silvio Berlusconi this evening faces a vote on whether to expel him over his conviction for tax fraud.
Lloyds gains on St James's Place speculation
Lloyds was rising amid speculation that it will likely dispose of a "significant" proportion of its 22% stake in St. James's Place early next month, according to Panmure Gordon. One of the broker's analysts today emailed clients saying the group will probably place "at least 12%" but "could conceivably push for a full exit, albeit the discount required may rule out such a course of action".
Engineering firm AMEC was a heavy faller today after going ex-dividend. The company was also making headlines after The Times reported that it is lining up a deal to merge with American rival Foster Wheeler.
Others in the FTSE 350 including Johnson Matthey, Vedanta Resources, Lancashire Holdings, 3i Infrastructure, UDG Healthcare, Telecom Plus and Dunelm also went ex-div today.
Compass, the world's largest catering group, was higher after beating forecasts with its annual results, driven by strong performances in North America and Fast Growing & Emerging. The company also unveiled a bigger-than-expected share buyback for 2014 of £500m.
Water group United Utilities also impressed with its first-half results as underlying operating profits rose 9%. The company also said it is discounting bills by £20m for customers, offsetting the allowed price increases for 2014/15, meaning that bills will go up by no more than inflation.
NMC Health was a standout performer, rising as much as 10% after the Dubai government said that healthcare insurance will become mandatory for all residents, at the expense of the employer. Analyst Ingeborg Øie from Jefferies said that the reform was "the catalyst we have waited for".
Banknote printer De La Rue was in the red, pulling back after a strong rise the day before after its first-half report. The stock was being weighed down this morning by Citigroup which downgraded its rating from 'buy' to 'hold'. |
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| FTSE 100 - Risers
Sports Direct International (SPD) 732.50p +3.53%
Lloyds Banking Group (LLOY) 77.27p +2.74%
Burberry Group (BRBY) 1,527.00p +2.55%
Rexam (REX) 503.00p +2.46%
Mondi (MNDI) 1,013.00p +2.22%
Resolution Ltd. (RSL) 350.80p +2.15%
GKN (GKN) 383.60p +2.08%
Associated British Foods (ABF) 2,292.00p +1.87%
ITV (ITV) 190.10p +1.77%
Aviva (AV.) 432.00p +1.67%
FTSE 100 - Fallers
Amec (AMEC) 1,124.00p -3.93%
BP (BP.) 482.05p -1.02%
Johnson Matthey (JMAT) 3,190.00p -0.93%
Severn Trent (SVT) 1,746.00p -0.85%
BAE Systems (BA.) 426.20p -0.81%
SSE (SSE) 1,340.00p -0.74%
Shire Plc (SHP) 2,784.00p -0.68%
Fresnillo (FRES) 812.50p -0.67%
Vedanta Resources (VED) 875.00p -0.57%
Royal Dutch Shell 'B' (RDSB) 2,148.50p -0.56%
FTSE 250 - Risers
IP Group (IPO) 196.90p +11.31%
NMC Health (NMC) 420.00p +10.38%
Xaar (XAR) 984.00p +8.13%
Hochschild Mining (HOC) 133.90p +5.43%
BTG (BTG) 544.00p +4.21%
Polymetal International (POLY) 527.00p +3.94%
Kenmare Resources (KMR) 19.13p +3.46%
ICAP (IAP) 415.10p +3.44%
Ferrexpo (FXPO) 177.50p +3.14%
Redrow (RDW) 288.40p +3.00%
FTSE 250 - Fallers
De La Rue (DLAR) 861.00p -6.00%
Kazakhmys (KAZ) 223.70p -4.52%
Lancashire Holdings Limited (LRE) 797.00p -2.80%
Telecom Plus (TEP) 1,875.00p -2.80%
Diploma (DPLM) 715.00p -2.65%
3i Infrastructure (3IN) 127.20p -2.30%
UDG Healthcare Public Limited Company (UDG) 305.70p -2.21%
Partnership Assurance Group (PA.) 303.70p -2.00%
Ophir Energy (OPHR) 340.30p -1.99%
Interserve (IRV) 642.50p -1.98% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rally as German consumer confidence rises - German consumer confidence rises
- Merkel agrees terms for coalition deal
- UK GDP grows in line
- US initial jobless claims and durable goods orders fall
FTSE 100: 0.20%
DAX: 0.66%
CAC 40: 0.36%
FTSE MIB: 0.80%
IBEX 35: 0.89%
Stoxx 600: 0.56%
European stocks advanced as investors digested a batch of economic data in Germany, the UK and the US.
A survey on German consumer confidence from GfK climbed to 7.4 in December, the highest level since August 2007. It exceeded the previous month's 7.1 level and the consensus prediction for the reading to remain unchanged.
The data comes after German Chancellor Angela Merkel's Christian Democrats agreed terms for a coalition with the Social Democratic Party (SPD) following a 17-hour-long discussion.
Merkel's conservatives reached a late-night deal with SPD, two months after falling short of winning the national election with a clear majority.
The final coalition deal will go to a ballot of SPD members to be signed off, with the result expected in mid-December.
On another positive note for markets today, the UK's gross domestic product (GDP) figures which rose 1.5% in the third quarter against the previous year, in line with the prior quarter's rate of growth and with economists' estimates.
"The British economy has been showing signs of strength, and this announcement set traders' minds at ease," IG said.
"The equity markets don't like surprises, and today's GDP figure won't rock the boat in terms of quantitative easing."
US data released ahead of Thanksgiving
Ahead of Thanksgiving tomorrow, when markets close, a barrage of US economic data was released today.
Initial claims for unemployment benefits fell to 316,000 in the week ended November 23rd, down from a revised 326,000 the week before. Analysts were expecting a number closer to 330,000.
However, analyst Michael Gapen from Barclays said that the later-than-usual timing of Thanksgiving is likely to have contributed to the surprise fall.
"As a result, we do not read too much into this week's decline and await further releases for more clarity," Gapen said.
Meanwhile, the final reading of the University of Michigan consumer confidence index increased 75.1 in November from an initial reading of 72 and October's level of 73.2.
Durable goods orders fell by 2% month-on-month in October, in line with consensus estimates, due to the volatile sectors of defence and aircraft which pulled back following strong growth in September. The previous month's growth however was revised higher to 4.1%. 'Core' durable goods orders which exclude defence and aircraft declined by 1.2%.
The Chicago purchasing managers' index which measures activity in the manufacturing sector fell from 65.9 to 63 in November, but this still came in ahead of the prediction of 60 by analysts.
Another report from the Mortgage Bankers' Association (MBA) showed mortgage applications dropped 0.3% in the week to November 22nd, from a 2.3% fall previously.
Federal Reserve policymakers are using economic data to gauge the health of the US economy in determining when to start scaling back monetary stimulus.
Italy's Berlusconi faces Senate vote
Former Prime Minister and centre-right leader Silvio Berlusconi is expected to be banned from parliament over a tax fraud conviction following a vote in Senate late today.
Berlusconi was convicted of tax fraud in October 2012 over deals his firm Mediaset made to purchase TV rights to US films. The verdict was upheld in August.
The vote comes after Italian Prime Minister Enrico Letta won a confidence vote on the 2014 budget yesterday.
Berlusconi told supporters gathered in Rome that the Senate vote was a political vendetta from the left and that he would remain in politics to lead his Forza Italia party in a "fight for the good of Italy" if the vote went against him.
Aker, Assicurazioni Generali
Aker Solutions ASA gained after Billionaire Kjell Inge Roekke's investment firm Aker ASA bought 16.4m shares of the Norwegian oil-services company at 115 kroner a share, 16% higher than yesterday's closing price.
Assicurazioni Generali SpA rallied as the European insurer unveiled plans to cut an extra €150m of costs by 2015 and reduce debt in an effort to increase profit and improve capital.
The Royal Mail's shares surged after reporting record half-year profits in its first results since floating on the London Stock Exchange last month.
Colruyt SA rallied after Belgium's biggest discount food retailer reported first-half revenue and net income that beat analysts' expectations.
De La Rue dropped after Citigroup cut its rating for the banknote printer to 'neutral' from 'buy', citing a price war in the currency market.
Accor declined as Europe's largest hotel operator said it will reorganise its business into two separate units including HotelServices, which will operate about 460,000 hotel rooms under 14 brands, and HotelInvest, which will act as the owner and investor in hotels.
Other assets classes advance
The euro rose 0.03% to $1.3576.
Brent crude futures increased $0.440 to $111.370 per barrel, ICE data showed. |
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| | US Market Report | | US open: Stocks gain as jobless claims fall, consumer confidence jumps - Jobless claims, consumer confidence beat forecast
- Durable goods fall due to pull back in defence, aircraft
- H-P surges after strong fourth quarter
Dow Jones: 0.16%
Nasdaq: 0.40%
S&P 500: 0.24%
US markets edged higher on Wednesday morning as investors reacted to a barrage of upbeat domestic economic data, including an unexpected fall in jobless claims and a jump in consumer confidence.
Investors had plenty on their plates today with the flurry of economic indicators preceding the closure of markets for the Thanksgiving holidays on Thursday.
Markets are continuing to look at incoming data as they await the Federal Reserve’s impending decision to scale back stimulus. According to analysts at Capital Economics today, non-farm payrolls – due to be released next week – will likely show a solid 180,000 increase in November, “which may be enough to prompt the Fed to taper its asset purchases at the policy meeting in December”.
Initial claims for unemployment benefits fell to 316,000 in the week ended November 23rd, down from a revised 326,000 the week before. Analysts were expecting a number closer to 330,000.
However, analyst Michael Gapen from Barclays said that the later-than-usual timing of Thanksgiving is likely to have contributed to the surprise fall. Meanwhile, the Labor Department noted that Veterans Day makes it more difficult to properly seasonally adjust the data.
“As a result, we do not read too much into this week’s decline and await further releases for more clarity,” Gapen said.
Meanwhile, the final reading of the University of Michigan consumer confidence index increased 75.1 in November from an initial reading of 72 and October’s level of 73.2.
Durable goods and Chicago PMI fall
Durable goods orders fell by 2% month-on-month in October, in line with consensus estimates, due to the volatile sectors of defence and aircraft which pulled back following strong growth in September. The previous month’s growth however was revised higher to 4.1%. ‘Core’ durable goods orders which exclude defence and aircraft declined by 1.2%.
The Chicago purchasing managers’ index which measures activity in the manufacturing sector fell from 65.9 to 63 in November, but this still came in ahead of the prediction of 60 by analysts.
The leading indicators composite index increased by 0.2% in October after a revised 0.9% gain the month before. However, forecasts were for no change.
Another report from the Mortgage Bankers’ Assocation (MBA) showed mortgage applications dropped 0.3% in the week to November 22nd, from a 2.3% fall previously.
H-P jumps after Q4 beat
Hewlett-Packard rallied in early US trading after the maker of personal computers posted revenue and profit that beat analysts’ estimates. Fourth-quarter revenue fell by 3% to $29.1bn, but that was well ahead of the $27.9bn consensus forecast, helped by better-than-expected growth in its enterprise division.
The share price of Apple was extending gains after hitting its highest close in almost a year on Tuesday.
Analog Devices Inc slumped after forecasting first-quarter profit that missed consensus. |
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| | Broker Tips | | Broker tips: Rio Tinto, Aviva, Compass, NMC Health Canaccord Genuity has cut its target for mining group Rio Tinto but has kept a 'buy' rating, saying that the stock is still 'cheap'.
"We believe Rio Tinto shares offer investors strong management and advantaged assets combining to drive a growing dividend. Its investment programme should give relatively fast and good quality growth over the next few years as we expect copper and iron ore volumes to pick up."
Nomura has raised its target for insurance group Aviva from 474p to 489p and maintained a 'buy' rating, saying that the stock remains 'relatively cheap' despite the impressive performance over recent few months.
"[…] we highlight that despite the strong share price performance, Aviva remains relatively cheap compared to its UK peers. Hence, we believe continued delivery should highlight the inherent strong franchise value at the group, and we expect the stock to re-rate from current levels."
Panmure Gordon has lifted its target for catering company Compass after annual results came in better than estimated, but the broker maintained a 'hold' recommendation on valuation grounds.
With the valuation close to 10-year highs, organic growth set to slow and a limited chance of additional capital returns next year, the broker believes the stock is "up with events".
Numis Securities and Jefferies both reiterated their 'buy' ratings for United Arab Emirates-focused healthcare group NMC Health after Dubai announced that healthcare insurance will become mandatory for all residents, at the expense of the employer.
"This is a major positive for NMC Health, which operates three healthcare facilities in Dubai, with another expected to open in early 2014," said Numis analyst Charles Weston. "If this law has a similar impact as that in Abu Dhabi (from 2006), we believe there is significant upside to our forecasts," he said. | | |
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