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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 inch higher on quiet day, but housing stocks sink - FTSE 100 edges higher, global equities close to six-year high
- US markets closed for Thanksgiving
- Housing, tobacco stocks pressured by government policy
techMARK 2,668.00 +0.35%
FTSE 100 6,654.47 +0.08%
FTSE 250 15,431.80 +0.16%
The FTSE 100 registered small gains on Thursday on a relatively quiet day for financial markets with indices in the States closed for the Thanksgiving holiday.
Nevertheless, record closes for the Dow Jones Industrial Average and S&P 500 on Wall Street on Wednesday night helped boost markets across Europe with the FTSE All-World equity index trading close to a six-year high of 264.7.
London’s benchmark index finished just five points higher at 6,654.47 after trading within a narrow range for most of the day, as strong gains in the mining sector were partly offset by weakness in housing and tobacco.
With an absence of US data today and very little out from the UK, the focus was on economic indicators from the Eurozone during the session. While business confidence in the single-currency region improved in November, consumer confidence declined.
Meanwhile, figures from Germany showed that unemployment in Europe's largest economy rose to its highest level since April 2011. The number of people out of work climbed for the fourth straight month in November, up 10,000 to 2.985m, much worse than the 1,000 increase expected by analysts.
Housing stocks fall on mortgage concerns
Housing stocks were under pressure today after the Bank of England announced it will scale back a scheme to boost mortgage lending as evidence begins to point to a housing market boom. The Funding for Lending Scheme will now focus solely on enabling greater lending to small firms that are having difficulties with borrowing as house price inflation looks set to accelerate further. Persimmon, Travis Perkins, Taylor Wimpey, Bovis Homes and Barratt Developments were all registering steep losses by midday.
Imperial Tobacco and British American Tobacco were under the weather after the UK government launched a fresh review into plain packaging. This is a major U-turn for Prime Minister David Cameron after he said earlier this year that there wasn’t enough evidence to show whether the measure would discourage young smokers.
Rio Tinto gained after saying it will increase its mine production capacity at lower capital cost per tonne at its iron ore business in Western Australia. Other mining stocks were performing well as metals prices gained. Fresnillo, Vedanta, Glencore Xstrata, Antofagasta and BHP Billiton were higher while Anglo American was benefitting from a ratings upgrade from Liberum Capital.
DIY retailer Kingfisher fell sharply after a weak performance in France held back third-quarter retail profits. Plumbing and heating products group Wolseley also disappointed with its first-quarter results as trading continues to be mixed across its key regions. Meanwhile, pubs group and brewer Marston’s slumped after saying that it would sell 202 pubs in an effort to reduce debt and pay for new “higher turnover pub-restaurants”.
Travel operator Thomas Cook surged after reporting a better-than-expected 49% jump in full-year operating profits as it lifted its near-term guidance for revenue and cost-cutting.
Kentz rose on speculation that the oil engineering firm is again on the bidding block. According to Acquisitions Daily, Austria’s M+W Group is considering a new bid for the British company after pulling out of an earlier possible bid in September. |
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| | FTSE 100 - Risers
Rio Tinto (RIO) 3,261.00p +3.89%
Fresnillo (FRES) 835.50p +2.83%
Old Mutual (OML) 199.40p +2.78%
Anglo American (AAL) 1,375.00p +2.73%
Hargreaves Lansdown (HL.) 1,222.00p +2.60%
Vedanta Resources (VED) 895.50p +2.34%
TUI Travel (TT.) 369.70p +1.90%
Capita (CPI) 995.00p +1.79%
BHP Billiton (BLT) 1,875.50p +1.71%
Glencore Xstrata (GLEN) 312.25p +1.66%
FTSE 100 - Fallers
Persimmon (PSN) 1,170.00p -6.10%
Kingfisher (KGF) 378.60p -4.39%
Travis Perkins (TPK) 1,783.00p -2.67%
easyJet (EZJ) 1,411.00p -2.29%
International Consolidated Airlines Group SA (CDI) (IAG) 368.30p -2.18%
Imperial Tobacco Group (IMT) 2,316.00p -1.91%
Compass Group (CPG) 922.00p -1.76%
Wolseley (WOS) 3,337.00p -1.71%
Resolution Ltd. (RSL) 346.20p -1.31%
Coca-Cola HBC AG (CDI) (CCH) 1,722.00p -1.20%
FTSE 250 - Risers
Thomas Cook Group (TCG) 175.70p +14.69%
Hochschild Mining (HOC) 145.50p +8.66%
Kazakhmys (KAZ) 240.00p +7.29%
RPS Group (RPS) 312.00p +6.41%
AL Noor Hospitals Group (ANH) 890.00p +5.45%
Britvic (BVIC) 670.00p +4.36%
Mitchells & Butlers (MAB) 417.50p +4.35%
Kenmare Resources (KMR) 19.86p +3.82%
African Barrick Gold (ABG) 173.30p +3.71%
Hellermanntyton Group (HTY) 300.00p +3.45%
FTSE 250 - Fallers
IP Group (IPO) 182.00p -7.57%
Marston's (MARS) 143.70p -7.35%
Taylor Wimpey (TW.) 107.40p -6.20%
Bellway (BWY) 1,446.00p -5.55%
Bovis Homes Group (BVS) 777.00p -5.53%
Redrow (RDW) 273.50p -5.17%
Barratt Developments (BDEV) 329.90p -4.85%
Crest Nicholson Holdings (CRST) 345.00p -4.06%
IG Group Holdings (IGG) 584.00p -3.95%
Galliford Try (GFRD) 1,079.00p -3.40% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rise as Eurozone confidence and German CPI gains - Eurozone economic sentiment improves
- German inflation rises, unemployment gains
- Spain faces S&P rating upgrade
- ECB warns of stimulus tapering
- BoE to reduce scheme to boost mortgage lending
FTSE 100: 0.08%
DAX: 0.39%
CAC 40: 0.22%
FTSE MIB: 0.92%
IBEX 35: 0.52%
Stoxx 600: 0.35%
European stocks gained as Eurozone economic confidence and German inflation rose more than expected in November.
Economic data in Europe was in focus as the US market was closed for Thanksgiving today.
The Eurozone’s index of executive and consumer sentiment advanced to 98.5 from 97.7 in October, the European Commission in Brussels revealed. Economists had predicted a reading of 98.
“November’s rise in the European Commission’s Eurozone economic sentiment indicator is a comforting sign given the recent falls in other indicators, like the composite PMI, but we still expect the recovery to remain weak,” according to Capital Economics.
Meanwhile, Germany’s consumer prices increased to 1.6% in November from 1.2% in October, exceeding the 1.3% forecast.
In contrast, Germany’s unemployment rate was unchanged in November at 6.5%, as expected, and there were 10,000 more people out of work.
The consensus forecast was for the number of unemployed to remain unchanged. There are now 2.81m without jobs in Europe’s biggest economy.
Spain headed for rating upgrade, says economist
Spain’s sovereign credit rating may be raised from negative to stable by Standard & Poor’s, according to an economists from the Institute for Market Studies.
Miguel Angel Bernal, coordinator of the Research Department of the IEC, painted a positive outlook for the nation in his in Madrid Outlook 2014 report.
He said all the factors weighing on Spain including public debt, the state of the banking sector and the government deficit are beginning to ease.
“All these factors have improved and also the political situation in Spain is more stable than in Italy and companies have improved their competitiveness,” he said.
In Italy, the Senate last night voted to expel former Prime Minister and centre-right leader Silvio Berlusconi from parliament over his conviction for tax fraud.
Barclays Research said while it's difficult to anticipate the long-term impact of the vote, the bank expects Berlusconi to retaliate and for his Forza Italia to poll strongly in the coming weeks.
ECB warns of Fed tapering
The ECB has underlined the threats posed by the scaling back of US Federal Reserve quantitative easing in its latest financial stability report.
The central bank called on Eurozone policymakers to prepare for market shocks from a tapering of the Fed’s monthly $85bn bond buying programme.
The Fed has indicated that a tapering could come as soon as its next meeting in December. However, many economists expect a March 2014 start.
In the UK, the Bank of England has announced it will scale back a scheme to boost mortgage lending as the property market continues to improve.
The Funding for Lending Scheme, which launched in July 2012, has supported a turnaround of a stagnant property market as it helps increase lending to home-buyers and businesses.
The scheme will now focus solely on enabling greater lending to small firms that are having difficulties with borrowing as house price inflation looks set to accelerate further.
Tobacco stocks fall on UK government measure
Imperial Tobacco Group and British American Tobacco declined on news the UK government will introduce plain cigarette packs to make smoking less attractive to young people.
Rio Tinto gained after announcing plans to increase production at a lower cost at its Western Australia iron ore business.
Kingfisher slumped after the home-improvement retailer reported third quarter same-store sales that missed analysts estimates.
Thomas Cook advanced after the travel company posted a 49% increase in full-year profit.
Swedish copper and zinc producer Boliden AB gained after Morgan Stanley raised its rating on the stock to ‘overweight’ from ‘equalweight’.
Compass Group slid as Citigroup reduced its rating to ‘neutral’ from ‘buy’.
Other asset classes mixed
The euro rose 0.15% to $1.3600.
Brent crude futures fell $0.288 to $110.990 per barrel, according to ICE data. |
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| | Broker Tips | | WPP, Rio Tinto, Thomas Cook WPP's share price was performing well on Thursday after UBS increased its target for the stock from 1,300p to 1,500p and raised its growth forecasts on the back of an optimistic outlook for the advertising and media giant.
"We argue that corporates will increase their investment in the services WPP provides to drive their top-line growth and gain market share in the US and Europe, improve branding in Asia and that Media, Digital and Data will see cyclical and structural growth, combining to deliver strong execution of WPP's strategy."
Investec has maintained its 'buy' rating for mining group Rio Tinto after the company announced on Thursday that it plans to ramp up production at its iron ore business in Western Australia.
"While promoting a flood of new supply is not encouraging for the iron ore price longer-term, the reality is, in our view, that if RIO doesn’t do it, others will. RIO is in the best position to capture market share through its low-cost, world class assets. A focus on brownfield expansion also provides some flexibility, enabling the expansion to remain sensitive to market conditions."
Jefferies has kept a 'buy' recommendation and 200p target for travel operator Thomas Cook after the company's full-year results and near-term guidance came in much better than expected.
"Thomas Cook is delivering. Margins are improving, net debt has fallen and the balance sheet considerably strengthened, more cost savings are promised and, importantly, trading is robust. Yet the shares still trade at a discount to its major competitor, TUI Travel. We think this is becoming increasingly difficult to justify, especially given the likely higher growth rates at Thomas Cook Group." | | |
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