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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 open: Markets welcome Iran deal, travel stocks jump - Markets hail Iran accord over nuclear programme
- Oil companies slumps, travel stocks surge
- Oil, gold prices drop after Iran deal
techMARK 2,661.69 +0.74%
FTSE 100 6,702.01 +0.42%
FTSE 250 15,314.64 +0.84%
UK markets headed higher on Monday morning as investors welcomed the deal over the weekend for Iran to limit its nuclear programme.
The so-called P5+1 nations of Russia, China, France, Germany, the UK and the US have agreed with Iran for the latter not to pursue further development of its nuclear programme in exchange for the easing of economic sanctions over the next six months.
Iran is home to the world's fourth-largest oil reserves but its exports have been affected by tough sanctions. The nation will not be allowed to increase its oil sales for six months but the deal has relieved tensions in the oil producing region of the Middle East.
Travel stocks in particular were performing well in the UK early on as crude prices declined following the agreement. Brent was trading 1.95% lower at $108.89 a barrel.
Another record close for US benchmarks on Friday was also feeding into the stronger start in London, as the Dow Jones Industrial Average and S&P 500 both marked seven straight weeks of gains. US stock futures were pointing to a firmer start after the opening bell later on.
However, Chief Market Analyst Michael Hewson from CMC Markets warned: "Volumes this week could … suffer as a result of the Thanksgiving holiday in the US on Thursday as we head into the end of the month."
Petrofac gains on lucrative Oman contract
Petrofac, the oil and gas services provider, rose strongly after saying that its 50/50 joint venture (JV) with Korean based Daelim Industrial has been awarded a $2.1bn engineering, procurement and construction contract by Oman Oil Refineries and Petroleum Industries.
BP was lower after the US judge overseeing the entire civil liability trial arising from the Gulf of Mexico oil spill criticised the company’s “deeply disappointing” attempt to block what it sees as excessive compensation payments.
Oil peers Shell, Tullow and BG Group were also out of favour this morning as crude prices weakened significantly. However, with Brent down sharply this morning, travel stocks such as Carnival, Thomas Cook, IAG and easyJet were making gains. The latter was given an extra boost by Jefferies which upgraded the shares to 'buy'.
Gold miners Randgold Resources and African Barrick Gold were in the red with the price of the precious metal trading near a four-month low as the demand of safe-haven assets reduced on the back of the Iran deal.
Engineering services giant Babcock fell after revealing that it is in discussions about setting up a "joint venture" with helicopter firm Avincis. The Financial Times cited sources as saying that the Babcock is looking to pay around £400m for a 50% interest in the company, while the Sunday Times suggested that it could launch a £1.5bn bid - comprising £1bn in cash plus £500m of net debt - to buy the whole company.
Defence group Chemring surged after saying that expectations for the financial year ended October 31st remain in line with previous guidance despite the adverse market backdrop. |
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| | FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 374.10p +3.11%
easyJet (EZJ) 1,441.00p +2.56%
William Hill (WMH) 377.10p +2.44%
Carnival (CCL) 2,276.00p +2.15%
Petrofac Ltd. (PFC) 1,216.00p +2.10%
SABMiller (SAB) 3,277.50p +1.85%
Aberdeen Asset Management (ADN) 482.60p +1.51%
Mondi (MNDI) 1,009.00p +1.31%
Shire Plc (SHP) 2,867.00p +1.27%
Sage Group (SGE) 350.00p +1.24%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 4,267.00p -2.18%
Babcock International Group (BAB) 1,303.00p -1.66%
BG Group (BG.) 1,248.00p -0.91%
Severn Trent (SVT) 1,796.00p -0.88%
BP (BP.) 490.95p -0.51%
Royal Dutch Shell 'B' (RDSB) 2,195.50p -0.36%
Tullow Oil (TLW) 884.00p -0.34%
Royal Dutch Shell 'A' (RDSA) 2,098.00p -0.33%
Associated British Foods (ABF) 2,285.00p -0.26%
United Utilities Group (UU.) 665.50p -0.08%
FTSE 250 - Risers
Chemring Group (CHG) 215.20p +10.70%
IP Group (IPO) 166.50p +5.25%
Carpetright (CPR) 605.00p +3.33%
F&C Asset Management (FCAM) 96.50p +3.15%
Oxford Instruments (OXIG) 1,462.00p +3.03%
Brewin Dolphin Holdings (BRW) 279.80p +2.87%
Redrow (RDW) 280.40p +2.64%
Synthomer (SYNT) 231.00p +2.58%
Supergroup (SGP) 1,140.00p +2.52%
Halfords Group (HFD) 488.60p +2.37%
FTSE 250 - Fallers
African Barrick Gold (ABG) 164.70p -4.13%
Essar Energy (ESSR) 96.75p -3.83%
Centamin (DI) (CEY) 46.48p -1.75%
PZ Cussons (PZC) 370.80p -1.28%
Moneysupermarket.com Group (MONY) 175.50p -1.13%
Michael Page International (MPI) 453.40p -0.87%
Kenmare Resources (KMR) 18.71p -0.74%
Lonmin (LMI) 311.20p -0.32%
Kazakhmys (KAZ) 239.50p -0.25%
Paragon Group Of Companies (PAG) 342.30p -0.20% |
| | UK Events Calendar | | INTERIMS
Accsys Technologies, City of London Group, Cranswick, GB Group, Quintain Estates & Development, UBC Media Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Pending Homes Sales (US) (15:00)
GMS
Sarantel Group 'A' Shares
FINALS
Zambeef Products
AGMS
Aeorema Communications, Pantheon International Participations
UK ECONOMIC ANNOUNCEMENTS
BBA Mortgage Lending Figures (09:30)
FINAL DIVIDEND PAYMENT DATE
Avation, El Oro Ltd, JPMorgan Emerging Markets Inv Trust, Petmin Ltd. (DI) |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks rise as ECB's Coeure plays down deflation fears - ECB's Coeure addresses deflation concerns
- UK mortgage approvals and US pending home sales released
- Oil declines after Iran deal
FTSE 100: 0.50%
DAX: 0.59%
CAC 40: 0.54%
FTSE MIB: 0.25%
IBEX 35: 0.72%
Stoxx 600: 0.58%
European stocks began the week on a positive note after European Central Bank official Benoit Coeure played down deflation fears and before the release of US data.
Coeure said the ECB’s decision to cut interest rates from 0.50% to 0.25% was spurred by “slow motion” disinflation rather than concerns of deflation risks in the euro-area. Inflation fell to 0.7% in October from 1.1% the previous month.
"We did not act because we see deflation risks materialising in the euro area," he said in a forum in Tokyo.
"Rather, we acted because we wanted to keep a sufficient safety margin above zero percent inflation."
Turning to today’s agenda will be a report on UK British Bankers Association mortgage approvals for October, which are tipped to rise to 45,200 from 43,000 in September.
In the US, pending home sales will be released which is expected to fall 1% year-on-year in October, compared to a 1.1% a month earlier.
Later on Bundesbank President Jens Weidmann will speak at Harvard University.
Oil falls after Iran nuclear deal
Oil prices declined after Iran agreed to curb some of its nuclear activities in exchange for an easing of international sanctions against the country.
Iran is home to the world's fourth-largest oil reserves but its exports have been affected by tough sanctions.
The nation will not be allowed to increase its oil sales for six months but the deal has relieved tensions in the oil producing region of the Middle East.
The White House said Iran will have to improve cooperation with United Nations monitors, commit to eliminate its stockpile of uranium enriched to 20% levels and stop advanced centrifuge installation under the proposed deal.
Iran and the six countries it has entered a pact with - the UK, the US, Germany, France, Russia and China, - expect to complete the deal within six months.
Brent crude futures plunged $2.106 to $108.760 per barrel on the ICE.
Travel stocks gain as oil drops
Thomas Cook Group and Air France rallied as travel stocks benefitted from a drop in oil prices.
PSA Peugeot Citroen advanced following reports that its Chief Executive Officer Philippe Varin intends to step down next year and will be replaced by former Renault SA Chief Operating Officer Carlos Tavares.
Orange gained on rumours that France’s biggest phone company may announce a sale of its Dominican Republic unit to Altice as early as this week.
The euro fell 0.18% to $1.3534. |
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| | US Market Report | | US: Close - Goldman Sachs sees GDP growing up to 3.5 per cent in 2014
- Lockhart (Fed): Expects tapering to be discussed at December FOMC
- Citi sees no rebound in gold prices next year
- Vince Holdings soars 52 per cent in stock market debut
Dow Jones Industrials: 0.34%
Nasdaq Composite: 0.57%
S&P 500: 0.50%
The main US stock indices ground higher on Friday, following positive unemployment data on Thursday and as traders squared their books ahead of next week's Thanksgiving Day holiday. In fact, both the Dow Jones Industrials and the S&P 500 finished higher for a seventh consecutive week and at record highs.
Weekly 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 Labour 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. 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.’
IBM got dragged lower by media reports that well-known investor Stan Druckenmiller had recommended going short the stock.
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.
From a sector stand-point the best performance was to be seen in the following industrial groups: Biotechnology (3.29%), Broadcast (2.14%), Media (1.99%) and Airlines (1.90%).
Treasury yields move lower
The 10-year US government bond yields ended the day down by four basis point at 2.74%.
West Texas Intermediate crude futures gave back some of the previous day’s bounce, falling by 0.75% to the $94.72 per barrel on the NYMEX. |
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| | Monday newspaper round-up | | BP, easyJet, Royal Mail The judge hearing the civil case over the 2010 Deepwater Horizon disaster in the Gulf of Mexico has strongly criticised BP, accusing the company’s lawyers of “deeply disappointing” actions. In an order released late on Friday, Judge Carl Barbier said BP had made a “startling” reversal of its previous statements as it pursued its court battle to block what it sees as excessive compensation payments under the settlement for victims of the spill it agreed last year, The Financial Times writes.
easyJet pilots in France are to take strike action on Monday after accusing the airline of failing to share record profits with its staff. A spokesman for easyJet, which is Europe's second-largest budget carrier after Ryanair and operates from 12 French airports, said it did not plan to cancel flights but warned that customers could suffer delays as a result of action by the SNPL union, which counts 90% of easyJet pilots among its members, The Guardian reports.
Royal Mail is expected to report on Wednesday that half-year profits have risen by a modest 5.6%, but the figures could be overcast by the threat of industrial action. Union bosses, who are due to meet on Monday, have until Wednesday to decide whether to go ahead with a strike over pay and terms, meaning the action could be announced on the same day that Royal Mail issues the first results since its recent flotation. Royal Mail shares closed at 538p on Friday, up from the 330p float price, The Daily Mail says.
Policymakers risk “digging a big hole” for future generations by persisting with low interest rates and quantitative easing five years after the crisis struck, according to Robert Zoellick, the former head of the World Bank. Countries are becoming dangerously dependent on stimulus policies and need to be encouraging the private sector to start driving growth, he said, The Times reports.
Every time a house comes on the market, nearly seven buyers spring up to chase the property, driving prices across Britain almost £6,000 higher in just one month. Research from Sequence, the estate agency group, shows that the average house price rose by 3% between September and October to £209,923, a rise of £5,583 in one month alone. Compared with October last year, prices have risen by 11%, The Times says.
Companies could create more than 200,000 jobs over the next 12 months if the Chancellor uses next month’s autumn statement to cut jobs taxes, according to a report published today. Confidence among small businesses and mid-caps has “skyrocketed” over the past three months, and firms are now demanding changes to their employers’ national insurance contributions (NIC) to further boost economic growth, The Scotsman says. | | |
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