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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Stocks fall one per cent on earnings, taper fears - Perform plummets after profit warning
- Sports Direct and Wood Group fall sharply after results
- Taper bets increase ahead of Fed meeting, US data in focus
- FTSE 100 at lowest level since mid-October
techMARK 2,652.61 -0.83%
FTSE 100 6,445.25 -0.96%
FTSE 250 15,211.54 -1.20%
The FTSE 100 finished one per cent lower on Thursday as disappointing corporate updates and increased bets about a tapering of stimulus in the States prompted investors to scale back risk appetite.
Sharp falls from Sports Direct and Wood Group, along with a profit warning from Perform Group, helped to dampen sentiment in London today, with the UK’s benchmark index closing at its lowest level in over two months.
The Footsie ended 62.47 points down at 6,445.25 after a weak start on Wall Street this afternoon. London's benchmark index has not closed below its current level since October 10th when it finished at 6,430.49.
Nevertheless, analysts at Capital Economics see the FTSE 100 outperforming over the next few years due to a weaker pound and a cyclical rebound in profits, following its underperformance in 2013. In fact, they see the index hitting 7,500 by 2015, whereas the S&P 500 will "struggle from here" reaching just 1,850 by that time.
A budget deal in Washington signed on Tuesday night was met with a mixed reaction on markets yesterday. While the agreement looks to ease spending cuts over the next two years and reduces the potential for political brinkmanship, many believe that it removes yet another obstacle standing in the way of the Fed's decision to taper following the strong labour-market figures out last week.
“In a rather dramatic shift in sentiment, market participants are starting to see that the possibility of the Federal Reserve tapering stimulus at next Wednesday’s Federal Open Market Committee meeting is gaining in credibility,” said Max Cohen, Financial Sales Trader at Spreadex.
Perform plummets; Sports Direct and Wood Group under pressure
Sports media group Perform plummeted after warning that its 2013 full-year revenue will be below previous expectations, pushing earnings “significantly” below forecasts. The warning, which also revealed results for 2014 are now set to miss expectations, more than halved the value of the company's stock by the close.
Sportswear and equipment retailer Sport Direct slumped despite delivering a near-17% jump in underlying profits during its first half, as it cautioned that "[current] trading has now reverted to management's original expectations" following the outperformance in the first half. The company also revealed that long-running Finance Director Bob Mellors, who was appointed in 2004, is to retire at the end of December on health grounds.
Energy services firm Wood Group disappointed after saying that trading remaining mixed across its three main divisions. While it reiterated guidance for overall growth in 2013 and 2014, it said its engineering division would see a 15% drop in operating profits next year. Sector peers AMEC and Petrofac fell in sympathy.
After a heavy fall early on, fashion retailer SuperGroup erased losses as a strong first-half report came alongside the warning that comparatives for the third quarter "are more challenging than those experienced so far this year".
Mining stocks were under the weather as investors scaled back risk appetite and as metal prices declined across the board. Fresnillo, Vedanta, Randgold and African Barrick Gold all finished with heavy losses.
Imagination Technologies was extending losses today after a sharp fall the day before as it gave a gloomy outlook for the high-end smartphone market in its fiscal second half.
Utilities stocks were performing relatively well amid the wider market weakness, helped by positive comments from analysts at JPMorgan Chase & Co and Standard & Poor’s on UK regulation. United Utilities, National Grid, Pennon, Centrica and Severn Trent were all in demand. |
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| | FTSE 100 - Risers
United Utilities Group (UU.) 655.50p +1.71%
TUI Travel (TT.) 379.40p +0.66%
National Grid (NG.) 750.00p +0.54%
Croda International (CRDA) 2,276.00p +0.35%
Sage Group (SGE) 373.40p +0.35%
AstraZeneca (AZN) 3,458.00p +0.32%
Severn Trent (SVT) 1,674.00p +0.30%
International Consolidated Airlines Group SA (CDI) (IAG) 370.00p +0.27%
Standard Chartered (STAN) 1,293.50p +0.23%
Centrica (CNA) 325.10p +0.18%
FTSE 100 - Fallers
Sports Direct International (SPD) 674.00p -12.58%
Fresnillo (FRES) 716.00p -5.23%
Amec (AMEC) 1,049.00p -4.98%
Vedanta Resources (VED) 779.50p -4.00%
Petrofac Ltd. (PFC) 1,142.00p -3.95%
Mondi (MNDI) 904.50p -3.88%
Randgold Resources Ltd. (RRS) 3,896.00p -3.83%
Aberdeen Asset Management (ADN) 447.40p -3.78%
Persimmon (PSN) 1,136.00p -3.15%
Coca-Cola HBC AG (CDI) (CCH) 1,634.00p -3.14%
FTSE 250 - Risers
AL Noor Hospitals Group (ANH) 966.00p +7.93%
CSR (CSR) 580.00p +5.65%
NMC Health (NMC) 435.00p +5.05%
Ted Baker (TED) 2,241.00p +3.80%
Kenmare Resources (KMR) 19.67p +3.53%
Dialight (DIA) 851.00p +3.53%
Bwin . party Digital Entertainment (BPTY) 117.10p +2.18%
Ocado Group (OCDO) 409.80p +1.86%
AZ Electronic Materials SA (DI) (AZEM) 390.00p +1.69%
Xaar (XAR) 1,162.00p +1.57%
FTSE 250 - Fallers
Perform Group (PER) 180.00p -57.85%
Imagination Technologies Group (IMG) 169.50p -10.79%
Wood Group (John) (WG.) 718.00p -9.91%
African Barrick Gold (ABG) 157.80p -4.94%
Oxford Instruments (OXIG) 1,647.00p -4.02%
Halfords Group (HFD) 447.50p -3.76%
Hunting (HTG) 760.50p -3.67%
Computacenter (CCC) 651.00p -3.48%
Evraz (EVR) 98.10p -3.35%
Laird (LRD) 252.60p -3.07% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks edge lower as investors weigh data - Eurozone industrial output declines
- ECB says policy will remain loose
- US retail sales rise
- US weekly jobless claims surge
FTSE 100: -1.03%
DAX: -0.69%
CAC 40: -0.41%
FTSE MIB: -0.70%
IBEX 35: -0.98%
Stoxx 600: -0.98%
European stocks finished lower as investors weighed economic data releases today in the Eurozone and the US.
Eurozone industrial output dropped 1.1% on the month, compared to a decline of 0.5% and the consensus forecast for an increase of 0.3%.
It signalled another bump in the road for the bloc’s economic recovery as the European Central Bank (ECB) said its policy would remain loose as long as needed.
In its monthly bulletin the ECB said that it would continue to assist the gradual economic recovery in the euro area by keeping borrowing costs low for an “extended” period.
The ECB expects gross domestic product (GDP) in the Eurozone to decline 0.4% this year and pick up to 1.1% growth next year and 1.5% in 2015.
Separately, ECB President Mario Draghi said bank holdings of government bonds will be tested among other debt categories in the monetary authority’s planned stress test next year.
However, he warned that the larger debate over risk weights for sovereign debt holdings is not the ECB’s responsibility.
"Sovereign debt is going to be stressed like all other categories in banks' balance sheets," Draghi said during a plenary debate on the ECB's Annual Report 2012 at the European Parliament in Strasbourg, France.
The ECB is reviewing the balance sheets of the largest Eurozone banks before taking over supervision of the financial institutions in November 2014.
Peugeot, Sports Direct
PSA Peugeot Citroen declined after disclosing a charge of about €€1.1bn in its auto operation due to unfavourable currency movements in Russia and latin America and lowering its estimate for savings from its partnership with General Motors.
Sportswear and equipment retailer Sports Direct slumped after saying that “[current] trading has now reverted to management's original expectations” as it reported its first half earnings.
UCB SA advanced after Barclays upgraded the Belgian drugmaker’s shares to ‘overweight’ from ‘equal weight’.
John Wood Group’s shares dropped after saying it expects earnings from its engineering division to fall 15% in 2014.
Ziggo rallied after the Dutch broadband provider said that Liberty Global Plc has renewed talks to buy the company.
Fortum Oyj gained after saying it will sell its Finnish power distribution business for €2.55bn to Suomi Power Networks Oy.
The euro fell 0.25% to $1.3752.
Brent crude declined $0.578 to $109.070 per barrel, according to the ICE. |
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| | US Market Report | | US open: Markets fall on mixed data amid taper speculation - Jobless claims jump to 386k, ahead of forecasts
- US retail sales growth picks up in November
- JPMorgan nears Madoff settlement
- Facebook to join S&P 500
Dow Jones: -0.41%
Nasdaq: -0.05%
S&P 500: -0.21%
Wall Street markets on Thursday as investors digested some mixed economic data with a decent pick-up in retail sales being offset by a big rise in jobless claims.
Jobless claims surged to their highest level in two months in the week ended December 7th, rising to 368,000 from a revised 300,000 the week before. Analysts had expected a much smaller increase to 320,000.
However, analysts warned about reading too much into the numbers given that the Labor Department said volatile seasonal factors - related to the timing of Thanksgiving - affected the data. Analyst Cooper Howes from Barclays said: “We would suggest smoothing through the volatility and looking at the four-week moving average, which rose 6k to 329k.”
The volume of US retail sales expanded at a 0.7% month-on-month pace in November, figures from the Census Bureau revealed on Thursday. This was higher than a revised 0.6% gain in October and ahead of the consensus estimate for 0.5%.
Paul Dales, Senior US Economist at Capital Economics, said that the data suggests that the “holiday shopping season began on a strong note”.
The reports come as investors weigh the outlook on the timing of the Federal Reserve’s tapering of monetary stimulus.
A budget deal in Washington signed on Tuesday night was met with a mixed reaction on markets yesterday. While the agreement looks to ease spending cuts over the next two years and reduces the potential for political brinkmanship, many believe that it removes yet another obstacle standing in the way of the Fed's decision to taper following the strong labour-market figures out last week.
According to a December 6th survey by Bloomberg, 34% of economists believe the central bank may consider reducing its $85bn of monthly bond purchases at its December 17th-18th meeting, up 17% from a November 8th poll.
JPMorgan to pay $1bn in penalties
Investment banking group JPMorgan Chase & Co edged lower after the opening bell on reports that it is near a settlement with the Justice Department related to its relationship with Bernie Madoff.
Facebook rallied on the news that it is to join the Standard & Poor’s 500 index next week just a year after its debut on the stock market.
Ciena Corp declined as the provider of fibre-optic networking gear posted fourth quarter adjusted earnings per share that missed forecasts.
Liberty Global may move after Dutch broadband provider said it renewed talks about a takeover by the cable company. |
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| | Broker Tips | | Carnival, SuperGroup, Tissue Regenix Numis Securities has kept its 'hold' rating and 2,250p target for cruise operator Carnival ahead of its annual results next week, saying it may be too early for the firm to increase guidance.
"The fourth quarter for Carnival is relatively small and seasonally weak and we do not expect any surprises as far as fiscal year 2013 is concerned. Of greater significance in determining the direction of the share price, we believe, will be the outlook statement," the broker said.
Despite the negative market reaction on Thursday, Investec has maintained its 'buy' recommendation and 1,500p target for fashion retailer SuperGroup, saying that its first-half results show progress across the board.
"We believe the strong brand momentum is sustainable and will come from owned new space growth in the UK and Internationally as well as franchise growth. In addition, there is potential to stretch the brand into new product categories and grow womenswear c.36% of sales as well as online."
Panmure Gordon has hiked its target for AIM-listed medical devices company Tissue Regenix by over a fifth after the signing of new sales distribution agreements in the US, highlighting the possibility that the firm could become a bid target in the future.
Panmure analyst Savvas Neophytou labelled it as "terrific news" and "serves as a reminder that this company is on the cusp of exploding in a commercial sense".
"Ultimately, we see the company becoming a bid target if its technology platform becomes successfully commercialised. It has multiple shots at goal and a strong balance sheet to execute its strategy," he said. | | |
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