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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 higher on positive economic data - Miners gain after China data
- HSBC beats forecasts with Q3 results
- Weir, Ryanair issue profit warnings
- ECB rate-cut speculation does the rounds
techMARK 2,651.30 -0.24%
FTSE 100 6,763.62 +0.43%
FTSE 250 15,503.06 +0.31%
Upbeat economic data from across the globe lifted the UK stock market on Monday with the heavyweight miners providing a lift after the outlook for China improved.
Better-than-expected third-quarter results from London's largest stock by market capitalisation, HSBC, also helped to buoy the market today, along with speculation over a possible rate cut by the European Central Bank (ECB).
The FTSE 100 finished 28.88 points higher at 6.763.62, a gain of 0.43%.
Global economic data improves
Activity in China's services sector in October expanded at its fastest pace in the last year, reinforcing confidence that the world's largest economy is on a stable growth path. The non-manufacturing purchasing managers' index (PMI) rose from 55.4 to 56.3 in last month.
Closer to home, the UK construction PMI rose to 59.4 in October, up from 58.9 in September and its highest level since September 2007. Meanwhile, business lobby group Confederation of British Industry also said it now predicts the economy will expand 1.4% this year and 2.4% in 2014, compared to the 1.2% and 2.3% projected in August.
The bullish mood was also lifted today by chatter around the possibility of an European Central Bank rate cut either this week or at its next meeting in December. However, Chief Economist Simon Smith from FxPro warned against such a move, saying that it would be "ineffective and do nothing to help tackling the disinflationary forces in the Eurozone".
HSBC gains after Q3 beat
HSBC jumped after saying that underlying profit before tax totalled $5.06bn in the three months to September 30th, up 10% from $4.6bn the year before and ahead of forecasts. Underlying revenues were broadly unchanged at $15.6bn but were still better than analysts' estimates.
Mining stocks were also on the rise, buoyed by the upbeat outlook for top metals consumer China. Fresnillo, Rio Tinto, Antofagasta, Randgold, Anglo American and BHP Billiton were among the best performers.
Heading the other way was Weir Group after the engineering firm cut its full-year profit outlook due to the impact of the recent weakness in the US and Australian dollar. Numis reacted by downgrading its rating on the stock to 'add'.
Ryanair also surprised the market with a profit warning, saying that full-year profits will fall for the first time in five years as airfares drop in Europe due to fierce competition. Sector rivals easyJet and IAG also fell sharply following the announcement.
Utility peers SSE and Centrica were trading lower after analysts at Investec downgraded their ratings on both stocks to 'reduce' due to increased political risk. Severn Trent and United Utilities also finished the day in the red. |
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| | FTSE 100 - Risers
Fresnillo (FRES) 1,001.00p +4.54%
Rio Tinto (RIO) 3,289.50p +3.31%
CRH (CRH) 1,553.00p +3.19%
Antofagasta (ANTO) 863.50p +3.17%
Randgold Resources Ltd. (RRS) 4,615.00p +2.40%
Anglo American (AAL) 1,494.50p +2.36%
HSBC Holdings (HSBA) 703.00p +2.28%
Vedanta Resources (VED) 1,087.00p +2.16%
BHP Billiton (BLT) 1,949.50p +1.59%
Shire Plc (SHP) 2,820.00p +1.51%
FTSE 100 - Fallers
easyJet (EZJ) 1,230.00p -5.09%
Weir Group (WEIR) 2,173.00p -3.68%
Meggitt (MGGT) 493.90p -2.97%
Royal Bank of Scotland Group (RBS) 331.70p -2.44%
Severn Trent (SVT) 1,821.00p -2.15%
Aggreko (AGK) 1,551.00p -2.08%
Marks & Spencer Group (MKS) 487.10p -1.54%
United Utilities Group (UU.) 692.00p -1.42%
Vodafone Group (VOD) 230.00p -1.08%
Coca-Cola HBC AG (CDI) (CCH) 1,768.00p -1.01%
FTSE 250 - Risers
Kenmare Resources (KMR) 21.86p +5.10%
Ted Baker (TED) 1,774.00p +4.97%
Evraz (EVR) 122.10p +4.63%
Diploma (DPLM) 721.00p +4.49%
Afren (AFR) 155.70p +3.80%
Fenner (FENR) 402.50p +3.23%
Ferrexpo (FXPO) 189.30p +2.88%
Wetherspoon (J.D.) (JDW) 732.50p +2.81%
Supergroup (SGP) 1,169.00p +2.81%
Hochschild Mining (HOC) 167.90p +2.75%
FTSE 250 - Fallers
Synthomer (SYNT) 233.40p -3.75%
Thomas Cook Group (TCG) 139.50p -3.46%
Imagination Technologies Group (IMG) 261.40p -3.19%
PayPoint (PAY) 1,003.00p -2.81%
RPS Group (RPS) 288.90p -2.79%
IP Group (IPO) 147.00p -2.65%
Perform Group (PER) 545.50p -2.59%
Telecity Group (TCY) 740.00p -2.57%
Computacenter (CCC) 578.00p -2.36%
Rathbone Brothers (RAT) 1,572.00p -2.18% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Upbeat data and ECB rate cut speculation boosts stocks - Speculation over ECB rate cut
- Eurozone manufacturing grows
- UK construction activity expands
- Chinese services growth accelerated in October
- Fed's Bullard on stimulus cut
FTSE 100: 0.48%
DAX: 0.33%
CAC 40: 0.28%
FTSE MIB: 0.47%
IBEX 35: 0.30%
Stoxx 600: 0.37%
European stocks advanced after the release of upbeat UK, Eurozone and Chinese data and before the European Central Bank's (ECB) meeting this week.
Eurozone purchasing managers' index (PMI) for manufacturing came in at 51.3 in October, in line with the previous month and with forecasts. A reading above 50 signals expansion.
German manufacturing rose to 51.7 last month from 51.5 in September, beating the consensus for the reading to remain unchanged. France and Italy, on the other hand, saw activity decline.
In the UK, construction PMI climbed to 59.4 in October from 58.9 a month earlier, above the forecast for a reading of 58.7.
In another positive note for the UK, the Confederation of British Industry (CBI) lifted forecasts for economic growth in a quarterly report.
The business lobby predicts the economy will expand 1.4% this year and 2.4% in 2014, compared to 1.2% and 2.3% projected in August.
In China yesterday, services PMI rose to a 13-month high of 56.3 in October from September's 55.4.
"Risk tone seems better Monday, thanks to the triple reasons of respectably strong PMI manufacturing data out of China and the UK and to a lesser extent, the Eurozone," noted Ishaq Siddiqi, Market Strategist at ETX Capital.
Also lifting markets was expectations that the ECB will cut interest rates at its Thursday meeting.
"Traders are feeling relatively sanguine for those reasons; the global economy is still in recovery mode and central banks remain committed to an easy accommodative stance with monetary policies," Siddiqi added.
Federal Reserve shouldn't rush stimulus cut, says Bullard
As speculation continues to increase over the impending start to the tapering of asset purchases by the Fed, St Louis Fed President James Bullard said today that the central bank should not hurry to scale back stimulus because of low inflation.
Last week the Fed held onto its current quantitative easing programme in the aftermath of the 16-day partial shutdown of the US government.
However, Bullard said that the Fed shouldn't wait for a permanent budget deal before making its move.
"I think we can't really wait for the political situation in Washington to be just right because, evidently, they could be bickering forever," he said in an interview with CNBC.
The President of the Federal Reserve Bank of Dallas, Robert Fisher, last night said that the central bank might move to tightening its monetary policy before March.
"I would say in terms of my own support, that I wouldn't rule out my supporting doing something before March. That's me. I cannot speak for the members of the committee," he told Bloomberg News in an interview.
Miners rally on Chinese data
A gauge of miners advanced including Fresnillo, Rio Tinto, Antofagasta and Anglo American after the release of strong Chinese PMI data.
Ryanair's shares tumbled after saying its annual profit will fall for the first time in five years as airfares drop in Europe due to fierce competition.
Sector peers easyJet and Air France-KLM Group also declined after the announcement.
HSBC gained after delivering a 10% jump in underlying profits in the third quarter.
Dufry rallied after the Swiss operator of duty-free shops posted a 15% rise in nine-month sales to 2.69bn francs.
PostNL advanced after the Dutch postal operator boosted its forecast for full-year underlying cash operating profit.
Fuchs Petrolub increased as the German lubricant maker said nine-month earnings before interest and tax rose to €237.2m from €224.2m.
Euro/dollar climbs
The euro rose 0.25% to $1.3521.
Brent crude futures fell $0.237 to $105.660 per barrel on the ICE. |
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| | US Market Report | | US open: Don´t wait for Capitol Hill, Fed´s Bullard says - US factory orders rise 1.7 per cent
- Bullard calls for patience on taper
- Blackberry drops on Fairfax plans
Dow Jones: 0.08%
Nasdaq: 0.08%
S&P 500: 0.10%
US markets opened higher on Monday after comments from a Federal Reserve policymaker and a Commerce Department report on factory orders.
Stock futures were higher ahead of the opening bell after the services purchasing managers’ index (PMI) fromChina rose from 55.4 to 56.3 in October, representing the fastest growth in activity in the last year. The UKconstruction PMI also increased from 58.9 to 59.4 last month, its best reading since September 2007.
Nevertheless, investors are also anxiously waiting on the the latest US non-farm payrolls report due this next Friday and the European Central Bank´s next policy meeting, on Thursday.
Markets held on to gains after a 1.7% rise in US factory orders in September met consensus estimates. This represented a strong rebound after two straight months of declines.
Meanwhile, as speculation continues to increase over the impending start to the tapering of asset purchases by the Fed, St Louis Fed President James Bullard said today that the central bank should not hurry to scale back stimulus because of low inflation. Last week, the Fed held on to its current quantitative easing programme in the aftermath of the 16-day partial shutdown of the US government.
However, Bullard said that the Fed shouldn’t wait for a permanent budget deal before making its move. "I think we can't really wait for the political situation in Washington to be just right because, evidently, they could be bickering forever," he said in an interview with CNBC.
Blackberry sinks as takeover plan falls through
Shares in Blackberry plummeted on Monday morning after the company ditched a plan to be sold to its biggest shareholder Fairfax Financial Holdings. The smartphone maker will instead replace its Chief Executive Officer and raise $1bn in financing. Fairfax will contribute $250m to the fund-raising.
Cereal maker Kellogg was in demand after unveiling a four-year cost-cutting programme which includes a 7% reduction to its workforce by the end of 2017. This comes as the firm delivered a 2.5% rise in third-quarter earnings on flat sales.
US Steel Corp was higher after Goldman Sachs raised its rating of the steel producer to ‘buy’ from ‘sell’.
Time Warner Cable gained as the US cable company was raised to ‘buy’ from ‘hold’ at Deutsche Bank AG. |
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| | Broker Tips | | Broker tips: HSBC, Weir, Ryanair, Utilities Nomura has retained its 'buy' rating and 850p target for global banking group HSBC following Monday's better-than-expected third-quarter figures.
'Clean' underlying revenue came in at $15,571m, ahead of the consensus estimate of $15,335m and Nomura's forecast of $15,145m. Meanwhile, the clean underlying profit before tax was $5,809m (consensus: $5,535m, Nomura: $5,509m).
Jefferies said it expects 2013 and 2014 consensus estimates for Weir to be cut by 5-6% after the engineering firm's profit warning on Monday, as it retained its cautious view on the stock.
Jefferies said: "We expected Weir's share price to be impacted by today's update, but not by 8%." The broker said it is "happy to stay at 'hold'" as the current valuation gives "only modest downside protection we feel".
Panmure Gordon has maintained its 'buy rating for airline group Ryanair in spite of a poorly-received first-half report which included a profit warning for the full year.
Analyst Gert Zonneveld said: "Over the medium term we are not overly concerned about the recent fare weakness given the prospects of modest short-haul capacity growth (by both Ryanair and the industry overall) and higher competitor fares, which should translate into attractive and sustainable profit growth over the medium term."
Investec has downgraded its ratings for UK-listed energy providers SSE and Centrica from 'add' to 'reduce' to reflect rising political risk.
"The latest round of 'Big 6' bashing in Parliament signals that political headwinds for the UK's main energy suppliers (the so-called 'Big 6') are freshening, ahead of the 2015 General Election," said analyst Harold Hutchinson. He said that the Big 6 are in an "unenviable 'lose:lose' situation" in terms of their profitability outlook with the political focus on them unlikely to abate before the upcoming elections. | | |
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