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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 pull back as investors await Fed outcome - Markets pull back after 1.3 per cent surge on Monday
- Investors await US inflation data ahead of Fed meeting
- RSA hit by two credit ratings downgrades
techMARK 2,680.51 -0.21%
FTSE 100 6,489.08 -0.51%
FTSE 250 15,329.78 -0.36%
After a strong surge the day before, UK markets opened with moderate losses on Tuesday morning as investors begin to position themselves for the conclusion of the Federal Reserve's policy meeting.
The FTSE 100 pulled back by 0.5% this morning from Monday's close of 6,522.2 following a 1.3% jump the day before.
"Investors banking on a 'Santa Rally' would have been encouraged by the strong start to the week European indices have enjoyed," said Max Cohen, Financial Sales Trader at Spreadex, before the open.
"Unfortunately, we are seeing weakness in European futures this morning as we prepare for Tuesday's open as investors continue to gauge the outlook for US stimulus before the Federal Reserve meets today."
Investors will be looking ahead to inflation figures from the States out later on ,with many hoping that below-par price rises will keep the Fed from tapering stimulus, even though most other economic data seems to be pointing in the right direction.
"This is why today's US consumer price index numbers could well be instructive in that regard with expectations that the November numbers could well see a rise from 1% to 1.3% on annualised basis," said Chief Market Analyst Michael Hewson from CMC Markets.
RSA in focus after credit ratings downgrades
RSA Insurance was making gains this morning but continues to trade well below levels seen last week after Friday's profit warning and resignation of its Chief Executive. The company was hit by two credit ratings downgrades yesterday evening, from S&P and Fitch.
"Both moves reflect RSA's weaker capital position and uncertainty over its ability to rebuild capital strength through retained earnings," explained analysts at Barclays this morning. The bank maintained its 'underweight' rating on the stock, saying that it will need to raise equity to rectify its capital shortfall, "which risks a spiralling decline in stock price".
Temporary power and temperature control group Aggreko was among the heaviest fallers, retreating after a stellar rise the day before as it said that full-year results would be slightly ahead of expectations.
Barclays fell after calling for the US courts to block energy regulators from collecting $488m of fines for electricity trading market manipulation.
Pharmaceuticals group GlaxoSmithKline declined early on after Goldman Sachs downgraded the stock to 'sell'.
Mining stocks were broadly lower this morning as investors scaled back risk ahead of the Fed meeting. Anglo American, BHP Billiton and Kenmare Resources were among the worst performers.
Telecoms group Cable & Wireless Communications was continuing to rise on speculation that it could be a takeover target of US giant AT&T. |
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| FTSE 100 - Risers
RSA Insurance Group (RSA) 90.95p +0.94%
Sports Direct International (SPD) 708.00p +0.78%
Reed Elsevier (REL) 865.50p +0.76%
International Consolidated Airlines Group SA (CDI) (IAG) 384.40p +0.63%
Aberdeen Asset Management (ADN) 455.90p +0.62%
BT Group (BT.A) 373.10p +0.30%
Babcock International Group (BAB) 1,288.00p +0.23%
BAE Systems (BA.) 437.90p +0.23%
Shire Plc (SHP) 2,789.00p +0.14%
TUI Travel (TT.) 390.50p +0.13%
FTSE 100 - Fallers
Aggreko (AGK) 1,611.00p -2.07%
Admiral Group (ADM) 1,238.00p -1.82%
Anglo American (AAL) 1,271.00p -1.74%
CRH (CRH) 1,463.00p -1.61%
Petrofac Ltd. (PFC) 1,135.00p -1.56%
Vedanta Resources (VED) 786.00p -1.38%
BP (BP.) 467.15p -1.28%
Burberry Group (BRBY) 1,452.00p -1.22%
BHP Billiton (BLT) 1,772.50p -1.14%
Barclays (BARC) 252.30p -1.08%
FTSE 250 - Risers
Perform Group (PER) 252.00p +6.78%
Rank Group (RNK) 134.40p +4.11%
ITE Group (ITE) 308.60p +2.15%
Cable & Wireless Communications (CWC) 49.75p +1.53%
Homeserve (HSV) 265.00p +1.42%
Centamin (DI) (CEY) 43.17p +1.29%
International Personal Finance (IPF) 591.00p +1.29%
Genus (GNS) 1,228.00p +1.24%
Essar Energy (ESSR) 72.15p +1.19%
Savills (SVS) 638.00p +1.11%
FTSE 250 - Fallers
IP Group (IPO) 151.40p -7.68%
Dixons Retail (DXNS) 49.43p -3.65%
AL Noor Hospitals Group (ANH) 887.00p -3.59%
Carpetright (CPR) 528.00p -3.03%
esure Group (ESUR) 239.60p -3.00%
Kenmare Resources (KMR) 19.50p -2.50%
NMC Health (NMC) 430.00p -2.27%
Alent (ALNT) 340.30p -2.16%
Ocado Group (OCDO) 424.00p -2.10% |
| | Download your free Santa Rally report. | | Have you heard of the stock market phenomenon called the Santa Rally? The FTSE 100 has risen in 18 of the last 20 Decembers*. Download your free report showing a breaking down of what the average rise has been for the stocks within the FTSE over the month of December. Losses can exceed deposits. * Past performance is no guarantee of the future |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks fall before inflation reports, Fed policy meeting - UK, German and US CPI figures out
- German economic confidence report to be released
- Federal Reserve begins policy meeting
FTSE 100: -0.52%
DAX: -0.36%
CAC 40: -0.87%
FTSE MIB: -0.40%
IBEX 35: -0.42%
Stoxx 600: -0.41%
European stocks were in the red as investors waited on a batch of inflation reports and prepared for the start of the Federal Reserve's policy meeting today.
Kicking off the session this morning will be the release of UK inflation figures. The consumer price index is expected to hold at 2.2% in November. The Bank of England is targeting inflation under but close to 2%.
Germany's inflation report will also be unveiled and is anticipated to show consumer prices remained unchanged at 1% last month.
Also in Germany this morning will be economic confidence figures. ZEW's sentiment index is tipped to rise to 55 in December from 54.6 in November.
Later on in the US, inflation may rise to 1.3% in November from 1% the prior month, according to consensus.
Chief Market Analyst Michael Hewson from CMC Markets said many are hoping that below-par inflation in the States will see the Fed hold back on a scaling back of monetary stimulus when the two-day meeting wraps up tomorrow.
"This is why today's US consumer price index numbers could well be instructive in that regard with expectations that the November numbers could well see a rise from 1% to 1.3% on annualised basis," he said.
A recent batch of upbeat data pointing to a recovery in the world's biggest economy and the labour market, has fuelled speculation that the central bank will announce a tapering of its monthly $85bn bond buying programme tomorrow.
Zurich, Rexel
Zurich Insurance gained after appointing George Quinn from Swiss Re Ltd as its Chief Financial Officer. The insurer has been seeking a CFO since Pierre Wauthier committed suicide in August.
Rexel declined following reports Ray Investment is selling a stake worth about €368.5m.
Orange slumped after saying it will not sign a deal with Iliad to share its 4G network.
The euro rose 0.09% to $1.3774.
Brent crude futures fell $0.358 to $109.020 per barrel, ICE data showed. |
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| | US Market Report | | US close: Markets surge ahead of Fed meeting as industrial production jumps - US industrial production hits one-year high
- LSI jumps after 6.6bn-dollar Avago takeover
- AIG to sell aircraft-leasing unit to AerCap
Dow Jones: 0.82%
Nasdaq: 0.71%
S&P 500: 0.63%
US stocks rose strongly on Monday with the S&P 500 snapping a four-day losing streak as investors reacted to upbeat industrial production figures amid rising hopes that the Federal Reserve may refrain from tapering stimulus at its meeting this week.
Markets had a tough time last week - with both the Dow Jones Industrial Average and S&P 500 registering their worst weekly performance since August - as investors scaled back risk appetite ahead of the conclusion of the Fed's policy meeting this Wednesday. This comes after a barrage of decent economic data over the last few weeks, as well as the budget deal in Washington.
However, as Market Analyst Alastair McCaig from IG explains, "the current institutional sentiment gives a 35% chance that we will see tapering start in December".
"The Federal Reserve has been talking about the possibility of this happening for some time and will no doubt hope the surprise factor has been well and truly factored in," he said.
Industrial production rises
Industrial production in the States rose at a month-on-month rate of 1.1% last month after a revised 0.1% gain in October. This was well ahead of the 0.6% increase expected by analysts and the biggest rise since November 2012.
Manufacturing output was also above forecasts after rising by 0.6%.
In other economic data, Markit's preliminary reading of its manufacturing purchasing managers' index edged lower to 54.4 in December, compared with an eight-month high of 54.7 in November and was slightly below forecasts.
However, it still remained firmly in expansionary territory – as signalled by any reading over 50. Nevertheless, analysts pointed out that the short history of this indicator limits its usefulness and impact on the markets.
The so-called Empire State general business conditions index, which monitors manufacturing activity in the New York region, rebounded to 1.0 in December from -2.2 the month before, though this was still lower than analysts had expected.
LSI shares surge higher
Disk-drive semiconductor maker LSI surged on news that Avago had agreed to pay $6.6bn to take-over the company. Notably, the deal will be part-financed by $4.6bn in debt.
American International Group rose strongly after confirming that it is to sell its holding in International Lease Finance Corp to aircraft-leasing group AerCap Holdings for $5.4bn in cash and stock. The latter jumped by over 33%.
Sprint declined on reports that it is looking at a possible bid for rival telecoms group T-Mobile US.
Exxon Mobil was upgraded to 'buy' from 'neutral' by analysts at Goldman Sachs, helping shares higher.
Advanced Micro Devices and Cirrus Logic declined after Oppenheimer & Co. downgraded the shares to 'underperform' from 'market perform'.
Twitter slumped after Wells Fargo & Co. downgraded the stock to 'underperform' from 'market perform'.
Time Warner Cable advanced on reports that Cablevision Systems Corp may be approached by private equity firms to make a bid for parts of the company.
S&P 500 - Risers
LSI Corporation (LSI) $10.96 +38.56%
Expedia Inc. (EXPE) $65.88 +5.02%
Allergan Inc. (AGN) $100.23 +3.79%
Tesoro Corp. (TSO) $58.37 +3.68%
Monster Beverage Corp (MNST) $63.60 +3.48%
Western Digital Corp. (WDC) $81.66 +3.30%
Jabil Circuit Inc. (JBL) $19.68 +3.20%
Williams Companies Inc. (WMB) $35.33 +3.15%
JDS Uniphase Corp. (JDSU) $12.19 +3.13%
Janus Capital Group Inc. (JNS) $10.99 +3.10%
S&P 500 - Fallers
Adobe Systems Inc. (ADBE) $58.50 -3.93%
Sears Holdings Corp. (SHLD) $44.10 -2.78%
Safeway Inc. (SWY) $32.72 -2.39%
Crown Castle International (CCI) $72.17 -2.35%
Dollar General Corp (DG) $59.49 -1.64%
International Game Technology (IGT) $17.14 -1.61%
Southwestern Energy Co. (SWN) $37.96 -1.61%
Delta Airlines Inc. (DAL) $27.92 -1.59%
Newfield Exploration Co (NFX) $23.01 -1.50%
Micron Technology Inc. (MU) $22.77 -1.34%
Dow Jones I.A - Risers
International Business Machines Corp. (IBM) $177.85 +2.92%
Cisco Systems Inc. (CSCO) $20.68 +2.17%
Exxon Mobil Corp. (XOM) $97.22 +2.00%
Caterpillar Inc. (CAT) $87.38 +1.55%
Goldman Sachs Group Inc. (GS) $170.95 +1.52%
Walt Disney Co. (DIS) $70.51 +1.28%
United Technologies Corp. (UTX) $108.53 +1.10%
McDonald's Corp. (MCD) $95.45 +1.07%
American Express Co. (AXP) $84.52 +1.00%
E.I. du Pont de Nemours and Co. (DD) $60.84 +1.00%
Dow Jones I.A - Fallers
Procter & Gamble Co. (PG) $81.69 -0.83%
Merck & Co. Inc. (MRK) $48.09 -0.60%
Wal-Mart Stores Inc. (WMT) $77.74 -0.44%
Nasdaq 100 - Risers
Avago Technologies Ltd. (AVGO) $50.10 +9.75%
Expedia Inc. (EXPE) $65.88 +5.02%
Monster Beverage Corp (MNST) $63.60 +3.48%
Western Digital Corp. (WDC) $81.66 +3.30%
eBay Inc. (EBAY) $53.11 +3.03%
Seagate Technology Plc (STX) $51.33 +2.67%
F5 Networks Inc. (FFIV) $83.44 +2.42%
Cisco Systems Inc. (CSCO) $20.68 +2.17%
PACCAR Inc. (PCAR) $57.31 +2.05%
Green Mountain Coffee Roasters Inc. (GMCR) $74.13 +2.02%
Nasdaq 100 - Fallers
Adobe Systems Inc. (ADBE) $58.50 -3.93%
Sears Holdings Corp. (SHLD) $44.10 -2.78%
Sba Communications Corp. (SBAC) $85.45 -2.39%
Micron Technology Inc. (MU) $22.77 -1.34%
DIRECTV (DTV) $65.75 -1.32%
Baidu Inc. (BIDU) $169.01 -1.30%
Autodesk Inc. (ADSK) $47.19 -1.16%
Celgene Corp. (CELG) $163.38 -0.92%
Akamai Technologies Inc. (AKAM) $45.39 -0.72%
Netflix Inc. (NFLX) $366.31 -0.72% |
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| | Newspaper Round Up | | Tuesday newspaper round-up: RSA, BP, Hiring plans... RSA Group, the embattled insurer, suffered a fresh blow last night when its credit rating was downgraded for the second time in a month by one of the main rating agencies, which branded management at the company as weak. Standard & Poor's cut the rating on the insurer, best known for its More Than brand, one notch from A to A-, arguing that the string of profit warnings and the resignation last week of its Chief Executive, Simon Lee, "indicates weaknesses in governance and management generally". - The Times
Lawyers for BP attempted to mislead the court hearing the company's legal battle over compensation for the 2010 Deepwater Horizon disaster, lawyers representing claimants have alleged. In a filing to the US district court in New Orleans on Monday evening, the steering committee of plaintiffs' lawyers said BP's counsel had made "material omissions" that were "tantamount to [...] misleading the court". - Financial Times
British companies plan to hire staff at the fastest pace since the start of the financial crisis over the next year, but this will not result in hefty pay rises. More than 50% of businesses expect their workforce to be larger in 12 months as the nation's economic recovery continues to take hold, according to a new survey by the CBI and Accenture, the management consultancy. - The Times
A Scottish life sciences company that rose from the ashes of collapsed Angel Biotechnology is preparing to return to the stock market and take over a Californian peer. Former Angel acting Chief Executive Stewart White launched Collbio in March and bought Angel's assets in Glasgow, including a plant previously owned by sausage skin maker Devro. - The Scotsman
The Bank of England has approved the termination of guarantees provided by the Treasury to RBS when it received a £45.5bn bailout from taxpayers in 2008 and 2009. This was insurance whereby the Treasury agreed to pump £8bn into RBS if its capital cushion designed to protect the bank against financial shocks fell below 5%. The insurance contract was meant to last five years but has been terminated a year early, saving RBS and taxpayers £320m in fees. - The Daily Mail
Virgin Money will be the latest new face to enter the current account market after it piloted a new account to 3,000 of its staff ahead of an expected launch next year. The banking arm of Sir Richard Branson's empire could unveil its new accounts as early as spring 2014, according to reports. This follows last week's announcement that Tesco Bank is employing 300 more staff in the run-up to its own current account launch in the first half of 2014. - The Daily Mail
Boeing intends to increase its dividend by 50% and ask investors to approve up to $10bn of share buybacks, the commercial jet maker said on Monday, calling the move a mark of confidence in its own future. The quarterly dividend would increase from 48.5 cents to 73 cents, Boeing said. The new $10bn buyback programme would allow repurchases to continue once the company has exhausted the remaining $800m of an outstanding buyback authorisation granted in 2007. - Financial Times | | |
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