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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 for fourth straight day ahead of Fed meeting - Stocks down ahead of Fed meeting next week
- FTSE 100 hits fresh two-month low
- RSA plummets after profit warning, CEO exit
- ARM gains on Google hopes
techMARK 2,663.70 +0.42%
FTSE 100 6,439.96 -0.08%
FTSE 250 15,233.46 +0.14%
UK stocks finished broadly flat on Friday after a quiet session as investors refrained from building positions ahead of a busy week for financial markets next week.
Nevertheless, markets still closed down for the fourth straight day, falling to a fresh two-month low.
This comes ahead of the highly-anticipated Federal Reserve policy meeting on December 17-18th as speculation continues to ramp up surrounding an impending tapering of stimulus by the central bank. The FTSE 100 ended just 5.29 points lower at 6,439.96 – its lowest level since October 10th - with just 26 points separating its intraday high 6,462 and low 6,436.
This tentative mood comes after a bipartisan US budget was passed by the House of Representatives last night at a wide margin 332 to 94, easing the fiscal uncertainty that has weighed on markets in recent months. The deal is expected to sail through the Senate next week, putting an end to three years of spending battles that brought the government to near-collapse.
“A lot of things have fallen into place and past week’s budget deal in the US Congress was yet another factor speaking in favour of Fed tapering soon,” said analysts at Danske Bank in a note to clients.
They believe the Fed will begin to scale back its stimulus programme next week but expects the central bank to balance a taper with stronger forward guidance in an effort to leave overall financial conditions unchanged.
“In contrast with what happened over the summer the market now seems very much prepared for Fed tapering,” Danske Bank said.
RSA plummets after profit warning, CEO exit
RSA Insurance fell sharply today after lowering its 2013 earnings forecast after identifying issues in its Irish business and experiencing adverse weather in Europe. At the same time the group announced the resignation of Group Chief Executive Simon Lee with immediate effect. The stock finished down around 7%, recovering slightly after an 18% slump in morning trade.
Chip designer ARM Holdings was heading higher on reports that US internet giant Google is looking at using its technology to design its own server processors.
Temporary power generation giant Aggreko was very much in the red after Numis Securities reiterated its 'sell' rating and cut its target for the stock. Analyst said that the shares are fully valued, trading at 20 times 2014 earnings.
Airline groups easyJet and IAG were on the up after the International Air Transport Association upgraded its profit forecast for the global airline industry for 2014.
Perform Group was rising strongly, albeit after a 58% sell-off on Thursday. The digital sports media firm warned yesterday that full-year revenues would be under previous expectations, pushing earnings "significantly" below forecasts.
Oil and gas producers such as BP and Shell finished lower after UBS said it is "remaining cautious" on the outlook for the industry next year. The bank said it sees "little reason for the European oil and gas sector to reverse its underperformance of 2012 and 2013". |
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| | FTSE 100 - Risers
Sports Direct International (SPD) 702.00p +4.15%
BAE Systems (BA.) 434.00p +3.11%
ARM Holdings (ARM) 1,001.00p +2.98%
British Sky Broadcasting Group (BSY) 804.00p +2.03%
Aberdeen Asset Management (ADN) 456.10p +1.94%
Randgold Resources Ltd. (RRS) 3,964.00p +1.75%
AstraZeneca (AZN) 3,518.50p +1.75%
ITV (ITV) 182.60p +1.61%
Hargreaves Lansdown (HL.) 1,285.00p +1.50%
easyJet (EZJ) 1,474.00p +1.45%
FTSE 100 - Fallers
RSA Insurance Group (RSA) 92.50p -7.22%
Experian (EXPN) 1,073.00p -2.28%
Aggreko (AGK) 1,516.00p -2.19%
Coca-Cola HBC AG (CDI) (CCH) 1,610.00p -1.47%
BP (BP.) 465.70p -1.07%
Royal Dutch Shell 'B' (RDSB) 2,155.00p -0.99%
Barclays (BARC) 251.45p -0.98%
Weir Group (WEIR) 2,056.00p -0.92%
Smiths Group (SMIN) 1,367.00p -0.87%
Vodafone Group (VOD) 226.65p -0.87%
FTSE 250 - Risers
Perform Group (PER) 215.00p +19.44%
Fidessa Group (FDSA) 2,275.00p +3.03%
Diploma (DPLM) 717.50p +2.94%
Carpetright (CPR) 534.00p +2.59%
Beazley (BEZ) 252.10p +2.56%
Ashtead Group (AHT) 729.00p +2.53%
Cobham (COB) 265.90p +2.27%
Redrow (RDW) 281.00p +2.26%
Home Retail Group (HOME) 189.70p +2.21%
Hays (HAS) 118.80p +2.06%
FTSE 250 - Fallers
Partnership Assurance Group (PA.) 274.30p -7.27%
Kazakhmys (KAZ) 191.00p -7.24%
Pace (PIC) 288.70p -5.62%
AL Noor Hospitals Group (ANH) 921.00p -4.66%
Xaar (XAR) 1,111.00p -4.39%
Thomas Cook Group (TCG) 162.30p -3.22%
Ophir Energy (OPHR) 302.60p -2.76%
Kenmare Resources (KMR) 19.13p -2.75%
Petra Diamonds Ltd.(DI) (PDL) 111.00p -1.86%
Bwin.party Digital Entertainment (BPTY) 115.00p -1.79% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks little changed as investors weigh Fed stimulus - Fed policy meeting in focus
- US House passes budget bill
- Eurozone employment unchanged
- UK construction rises
FTSE 100: -0.08%
DAX: -0.12%
CAC 40: -0.23%
FTSE MIB: 0.00%
IBEX 35: 0.01%
Stoxx 600: -0.16%
European equities finished the week little changed as investors prepared for next week’s Federal Reserve policy meeting when the central bank may announce a stimulus reduction.
An improving labour market and economy has increased speculation that the Fed will announce a reduction to its $85bn per month in bond purchases at the December 17th to 18th meeting.
“Everything we see and hear at the moment seems to support a reduction in asset purchases next week, from jobs figures to consumer behaviour and even fiscal issues,” said Alpari analyst, Craig Erlam.
Adding fuel to the fire was the positive news last night that a two-year US budget deal was passed through the House.
The budget proposal will now be sent to the Democrat-led Senate for approval and President Barack Obama has already backed the bill.
The proposed budget aims to reduce the federal deficit by up to $23bn and avoids a repeat of October’s government shutdown.
Eurozone employment, UK construction
Eurozone employment held steady for the second consecutive quarter in the three months to September, adding to signs of a weak recovery in the bloc.
On a year-on-year basis employment fell by 0.8% in the third quarter against a 1.1% decline previously. Germany’s employment rose while France registered no change, Italy was flat and Spain declined.
In the UK, construction rose by 2.2% in October compared to a month earlier when it fell by 0.5%. Economists had forecast a 1.6% increase.
In Spain, the consumer price index(CPI) increased in November by 0.2% year-on-year, three tenths of a percentage point higher than in the prior month.
The European Union harmonised CPI advanced 0.3%, as expected by a consensus of analysts, compared to a flat 0.0% a month earlier.
Hays, Syngenta
Hays rallied after Morgan Stanley gave the recruitment company an ‘overweight’ rating, saying strong demand for temporary workers will boost profit next year.
Syngenta edged higher after the world’s biggest maker of crop chemicals received an upgrade from Vontobel Holding to ‘buy’ from ‘hold’.
AstraZeneca climbed after its diabetes pill won the support of a US advisory panel.
RSA Insurance slumped after reducing its 2013 forecast due to issues with its Irish reserves and the impact of adverse European weather. The London-listed insurer also announced the resignation of Chief Executive Simon Lee.
Peugeot plunged as General Motors announced it is selling its entire 7% holding through a private placement to institutional investors.
ARM Holdings gained after the UK chip designer said it would buy Geometrics, which provides lighting technology for the gaming and entertainment industry.
The euro fell 0.13% to $1.3736.
Brent crude futures dropped $0.379 to $108.260 per barrel, according to ICE data. |
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| | US Market Report | | US open: Markets bounce off one-month lows, but upside limited - Taper speculation picks up after budget deal
- Fed to balance taper with forward guidance, says Danske Bank
- US producer prices fall 0.1 per cent m/m
Dow Jones: 0.07%
Nasdaq: 0.19%
S&P 500: 0.03%
Wall Street benchmarks edged higher on Friday with markets bouncing back slightly after hitting a one-month low the previous session.
However, gains were limited as investors continue to adopt a cautious approach ahead of the policy meeting at the Federal Reserve on December 17-18th.
The S&P 500 was up just 0.03% early on after hitting 1,775.50 on Thursday, its lowest close since November 12th, while the Dow was 0.07% higher than its worst finished since November 7th.
The upside moves come after a bipartisan US budget was passed by the House of Representatives last night by a wide margin 332 to 94, easing the fiscal uncertainty that has weighed on markets as of late. The deal is expected to sail through the Senate next week, putting an end to three years of spending battles that brought the government to near-collapse.
“A lot of things have fallen into place and past week’s budget deal in the US Congress was yet another factor speaking in favour of Fed tapering soon,” said analysts at Danske Bank in a note to clients.
They believe the Fed will begin to scale back its stimulus programme next week but expects the central bank to balance a taper with stronger forward guidance in an effort to leave overall financial conditions unchanged.
“In contrast with what happened over the summer the market now seems very much prepared for Fed tapering,” Danske Bank said.
There was little in the way of economic data out for release today, though US producer prices fell by 0.1% month-on-month in November, as expected by the consensus, due to a 0.7% decline in gasoline prices.
Tech stocks in focus: Adobe, Qualcomm, Google
Adobe Systems gained as much as 10% after it added more subscribers in the fourth quarter than analysts had estimated. Markets were shrugging off the guidance for estimated adjusted earnings per share 22-28 cents this quarter, below the current consensus forecast of 34 cents.
Steve Mollenkopf has been named as the new Chief Executive Officer at Qualcomm, pushing the price of the wireless technology group higher. Software firm Microsoft was trading lower on the news given that Mollenkopf had been rumoured to take over from Steven Ballmer as Chief Executive when he steps down.
Analysts at Evercore raised their price target on Google stock to $1,250 from $1,100 before. Google was also rising on speculation that is considering designing its own server processors, sending Intel sharply lower on competition fears.
Shares in oil explorer Anadarko Petroleum tumbled following a negative legal sentence related to its 2005 spin-off of Tronox.
Texas Industries surged after Bloomberg reported that the building materials company is thinking about a sale |
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| | Broker Tips | | Broker tips: Barclays, Perform Group, Oil & gas stocks Numis Securities has upgraded its rating for UK banking group Barclays from 'reduce' to 'hold' and hiked its target from 222p to 274p, saying that investment risks have already partially been priced in.
Analysts Mike Trippitt said that while Barclays awaits announcements from regulators on leverage ratios, its dividend "may well be the release valve for any leverage pressure". However, he said: "Whilst the investment case is muddied by leverage uncertainties, some uncertainty is discounted in recent share price weakness."
Credit Suisse has more than halved its target for Perform Group from 570p to just 246p after the digital sports media firm's profit warning on Thursday.
"We remain optimistic on the longer-term growth profile and business model of the group given the structural growth in the exploitation of digital content. However we acknowledge that after three warnings this year, with no detailed explanation yet for the reasons for the current ad spend weakness, and no guidance forthcoming on how this may be mitigated by the 'major cost review exercise' until the FY results in February, the stock could remain under pressure in the short-term."
Oil and gas producers were trading in the red on Friday morning after UBS said it is 'remaining cautious' on the outlook for 2014 for the industry.
"With the macro not expected to improve, a lengthening track record of patchy execution across the value chain, and no obvious big valuation call we see little reason for the European oil and gas sector to reverse its underperformance of 2012 and 2013," the bank said. Nevertheless, it named BG Group as its top pick in the | | |
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