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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 edge higher despite taper uncertainty - Fed meeting in focus, decision due out after close
- BoE minutes to be released this morning
- M&S downgraded by UBS to 'neutral'
- Oil stocks in focus after exploration updates
techMARK 2,701.33 +0.62%
FTSE 100 6,512.99 +0.41%
FTSE 250 15,387.21 +0.25%
Markets opened slightly higher on Wednesday despite the impending conclusion of the Federal Reserve's latest policy meeting, which could see the central bank begin to scale back its stimulus programme as the economic recovery strengthens.
The FTSE 100 was trading 0.4% higher at around 6,513 in early trading.
However, given that a decision is not due out until after UK markets close this evening, gains on the FTSE 100 are likely to be limited as traders scale back risk appetite and position themselves amid the uncertainty.
"Will they? Won't they? Tapering is likely the only thing on most investors mind today ahead of the [Fed's] decision on whether to finally taper the unprecedented $85bnn monthly bond-buying scheme," said Alex Conroy, Financial Sales Trader at Spreadex.
"If the last few months are anything to go buy expect huge volatility today as investors attempt to get ahead of the Fed," he said.
Markets will also be on the look out for the minutes of the latest Bank of England policy meeting which should shed further light on its decision this month to maintain interest rates at 0.5% and to leave its bond-buying programme unchanged at £375bn.
If that wasn't enough, Wednesday will also see the release of the German IFO business climate survey, UK employment data and a host of housing data from the States.
M&S hit by UBS downgrade
High Street retailer Marks & Spencer was a heavy faller this morning after analysts at UBS cut their rating on the stock from 'buy' to 'neutral' and lowered their target from 550p to 475p. In a review of the sector, the bank said raised concerns about margins given that promotional levels across the industry are up on last year.
United Utilities Group was in the red after going ex-dividend, meaning that from today investors won't be able to get their hands on its latest payout. Grainger, Marston's, Berkeley Group, Greene King and Halfords also went ex-div today.
Sainsbury was off shopping lists again today, along with fellow supermarket groups Tesco and Morrison, after a report from Kantar yesterday showed that over half the UK shopped in discounter grocery stores over the past 12 weeks. Deutsche Bank cut its target for Sainsbury slightly this morning, keeping a 'hold' recommendation.
Oilfield services firm Petrofac was trading lower this morning after a profit warning from French peer Technip.
Oil major BP rose after making its first significant oil discovery in the Gulf of Mexico since 2009, in the Gila deepwater prospect 300 miles off New Orleans. Sector peer Tullow however was flat after saying that one of its wells offshore Côte d'Ivoire has turned up dry.
Africa-focused oil and gas group Ophir Energy pleased investors after farming out a minority interest of its deepwater offshore blocks in Gabon in an effort to 'mitigate' exploration risk ahead of drilling.
India-focused Essar Energy rose after an update about its improving debt situation, tapering capital expenditure and healthy current trading. |
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| FTSE 100 - Risers
Smith & Nephew (SN.) 853.00p +2.16%
Persimmon (PSN) 1,176.00p +1.82%
Fresnillo (FRES) 739.50p +1.58%
Rexam (REX) 495.00p +1.41%
ARM Holdings (ARM) 1,007.00p +1.41%
AstraZeneca (AZN) 3,584.00p +1.34%
Vedanta Resources (VED) 795.50p +1.21%
Kingfisher (KGF) 371.00p +1.15%
Imperial Tobacco Group (IMT) 2,284.00p +1.15%
Travis Perkins (TPK) 1,751.00p +1.10%
FTSE 100 - Fallers
Marks & Spencer Group (MKS) 441.40p -2.41%
Sainsbury (J) (SBRY) 369.80p -2.32%
RSA Insurance Group (RSA) 90.95p -1.57%
United Utilities Group (UU.) 658.00p -1.50%
Tesco (TSCO) 321.10p -1.05%
Petrofac Ltd. (PFC) 1,101.00p -0.81%
Morrison (Wm) Supermarkets (MRW) 254.80p -0.74%
Amec (AMEC) 1,041.00p -0.67%
BG Group (BG.) 1,228.00p -0.53%
Smiths Group (SMIN) 1,390.00p -0.43%
FTSE 250 - Risers
Carpetright (CPR) 555.00p +4.72%
Alent (ALNT) 344.00p +3.06%
Rank Group (RNK) 134.50p +2.59%
Ophir Energy (OPHR) 313.70p +2.52%
St. Modwen Properties (SMP) 368.80p +2.16%
Supergroup (SGP) 1,349.00p +1.81%
Bovis Homes Group (BVS) 768.50p +1.72%
Taylor Wimpey (TW.) 108.30p +1.69%
Cranswick (CWK) 1,157.00p +1.67%
Bellway (BWY) 1,496.00p +1.63%
FTSE 250 - Fallers
Perform Group (PER) 233.20p -4.58%
Smith (DS) (SMDS) 317.00p -2.64%
Wood Group (John) (WG.) 685.50p -2.42%
Marston's (MARS) 144.00p -2.04%
Centamin (DI) (CEY) 41.41p -1.87%
Kenmare Resources (KMR) 19.00p -1.66%
Dunelm Group (DNLM) 921.50p -1.55%
Berkeley Group Holdings (The) (BKG) 2,477.00p -1.43%
Ferrexpo (FXPO) 181.40p -1.41% |
| | UK Event Calendar | | Wednesday December 18
INTERIMS
Darty
INTERIM EX-DIVIDEND DATE
Berkeley Group Holdings (The), First Property Group, Greene King, Halfords Group, JPMorgan Euro Small Co. Trust, Mitie Group, Octopus AIM VCT, Sweett Group, United Utilities Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
FOMC Interest Rate (US) (17:15)
Building Permits (US) (13:30)
Crude Oil Inventories (US) (15:30)
GFK Consumer Confidence (GER) (07:00)
Housing Starts (US) (13:30)
IFO Business Climate (GER) (09:00)
IFO Current Assessment (GER) (09:00)
IFO Expectations (GER) (09:00)
MBA Mortgage Applications (US) (12:00)
EGMS
One Delta
AGMS
Baronsmead VCT, Baronsmead VCT 2, City Natural Resources High Yield Trust, EpiStem Holdings, Henderson Far East Income Ltd., Henderson International Income Trust, Hunter Resources, Nanoco Group, One Delta, Standard Life Equity Income Trust, Starvest, Stellar Diamonds
TRADING ANNOUNCEMENTS
Bwin . party Digital Entertainment
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Minutes (09:30)
CBI Distributive Trades Surveys (11:00)
Claimant Count Rate (09:30)
Unemployment Rate (09:30)
FINAL DIVIDEND PAYMENT DATE
Renewable Energy Generation Ltd.
FINAL EX-DIVIDEND DATE
Alternative Networks, Artemis VCT, Baring Emerging Europe, Carr's Milling Industries, Grainger, Marston's, OMG
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks rise before Fed's policy decision - Fed unveils policy decision
- BoE releases minute
- UK employment figures out
FTSE 100: 0.37%
DAX: 0.57%
CAC 40: 0.36%
FTSE MIB: 0.41%
IBEX 35: 0.66%
Stoxx 600: 0.50%
European stocks advanced as investors prepared for the Federal Reserve to release its latest policy decision.
The US central bank may announce a reduction to its monthly $85bn bond-buying programme today when it wraps up its two-day meeting.
Economists remained mixed on the possibility, with some saying that below-par inflation will prevent the Fed from making a move this month.
Consumer price index (CPI) figures yesterday showed that the rate of core inflation held steady during November as it continues to undershoot the Fed's target.
Nevertheless, speaking to Bloomberg PIMCO Co-Chief Executive Mohammed El-Erian put the odds of a start to tapering at 60%. El-Erian also indicated that should the Fed decide to move tapering would be a part of a package of measures – including forward guidance – aimed at avoiding possibly undue ructions in markets.
Ahead of the Fed's announcement, the Bank of England releases the minutes of its own policy meeting earlier this month. The minutes should shed further light behind the central bank's decision to maintain interest rates at 0.5% and to leave its bond-buying programme unchanged at £375bn.
Also in the UK will be the release of the labour-market figures which are expected to show employers added 165,000 jobs in October, compared to 177,000 in September. The ILO unemployment rate is expected to remain unchanged at 7.6%.
Technip falls on margin warning
Technip shares tumbled after the French oilfield services company warned that it expects margins will fall next year.
TUI AG gained after the tour operator unexpectedly posted a full-year profit.
Elektrobit surged after the Finnish maker of software products for the automotive industry forecast operating profit of about €8m in 2013.
The euro climbed 0.03% to $1.3772.
Brent crude futures gained $0.074 to $108.520 per barrel, according to the ICE. |
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| | US Market Report | | US close: Stocks edge lower as investors await Fed - Markets await outcome of Fed meeting
- US CPI unchanged in November
- Current account deficit narrowed in Q3
- PIMCO puts odds of Fed surprise at 60 per cent
Dow Jones: -0.06%
Nasdaq: -0.15%
S&P 500: -0.31%
US markets closed with small losses on Tuesday after a choppy session as traders waited nervously for the outcome of the Federal Reserve's policy meeting.
The meeting, which concludes on Wednesday afternoon, has been highly anticipated over recent months given heightened speculation that the Fed will begin to scale back its asset purchase programme in the face of an improving economy.
Expectations, however, remain finely balanced with some saying that below-par inflation will prevent the Fed from making a move this month. Consumer price index (CPI) figures released during the session showed that the rate of core inflation held steady during November as it continues to undershoot the Fed's target.
Nevertheless, speaking to Bloomberg PIMCO Co-Chief Executive Mohammed El-Erian put the odds of a start to tapering at 60%. El-Erian also indicated that should the Fed decide to move tapering would be a part of a package of measures – including forward guidance – aimed at avoiding possibly undue ructions in markets.
CPI holds steady
The consumer price index (CPI) held steady in November compared with the month before, according to the Department of Labour, surprising analysts who had expected a 0.1% rise. The core measure, which excludes volatile food and fuel prices, rose by 0.2%.
The annual rate of core inflation was unchanged at 1.7%. This was as expected and only just below the Fed's target of 2%. However, with the closely watched alternative personal consumption expenditure (PCE) measure continuing to run at around 1.1% (in October), core inflation is much lower than the Fed would like.
Nevertheless, Paul Dales, Senior US Economist at Capital Economics, said: "We're not convinced that the low rate of inflation in November will prevent the Fed from starting the taper at tomorrow's policy meeting, although the decision remains finely balanced."
In other economic data, the US current account deficit came in at $94.8bn in the third quarter, below the consensus estimate of $100.2bn. Meanwhile, the second-quarter deficit was revised down to $96.6bn from $98.9bn.
The National Association of Home Builders index of house-builder sentiment rose from 54 to 58 in December, ahead of the 55 reading expected.
Boeing flying high after share buyback
Boeing advanced after the plane-maker raised its quarterly dividend by 51% and authorised a $10bn share-repurchase plan.
Facebook rallied after The Wall Street Journal reported that the social-networking site will run its first video ads on December 19th.
Hewlett-Packard was making decent gains after analysts at JPMorgan Cazenove raised their rating on the stock to 'outperform'. The bank said that the challenges facing the tech group are "easing".
Despite the performance of Facebook and H-P, the tech-heavy Nasdaq was still being weighed down by losses from Microsoft and IBM.
S&P 500 - Risers
Frontier Communications Co. (FTR) $4.78 +8.64%
Campbell Soup Co. (CPB) $42.74 +4.32%
Williams Companies Inc. (WMB) $36.84 +4.27%
Seagate Technology Plc (STX) $52.95 +3.15%
Electronic Arts Inc. (EA) $22.75 +3.13%
Harman International Industries Inc. (HAR) $83.04 +2.93%
3M Co. (MMM) $131.39 +2.92%
Visa Inc. (V) $213.25 +2.65%
Netflix Inc. (NFLX) $374.87 +2.34%
Whole Foods Market Inc. (WFM) $57.31 +2.18%
S&P 500 - Fallers
Borg Warner Inc. (BWA) $55.39 -49.36%
Delta Airlines Inc. (DAL) $26.94 -3.51%
J.C. Penney Co. Inc. (JCP) $8.20 -3.30%
Noble Energy Inc. (NBL) $67.61 -2.58%
CareFusion Corp. (CFN) $38.49 -2.53%
Regeneron Pharmaceuticals Inc. (REGN) $261.88 -2.45%
Tesoro Corp. (TSO) $56.98 -2.38%
News Corp Class A (NWSA) $17.35 -2.36%
Iron Mountain Inc. (IRM) $28.87 -2.20%
Southwest Airlines Co. (LUV) $18.32 -2.19%
Dow Jones I.A - Risers
3M Co. (MMM) $131.39 +2.92%
Visa Inc. (V) $213.25 +2.65%
Cisco Systems Inc. (CSCO) $20.92 +1.16%
Boeing Co. (BA) $135.88 +0.86%
Intel Corp. (INTC) $24.66 +0.84%
E.I. du Pont de Nemours and Co. (DD) $61.18 +0.56%
Nike Inc. (NKE) $76.76 +0.42%
Walt Disney Co. (DIS) $70.66 +0.21%
General Electric Co. (GE) $27.03 +0.19%
Dow Jones I.A - Fallers
Verizon Communications Inc. (VZ) $47.56 -1.45%
JP Morgan Chase & Co. (JPM) $55.72 -1.29%
Chevron Corp. (CVX) $118.74 -1.23%
International Business Machines Corp. (IBM) $175.76 -1.18%
McDonald's Corp. (MCD) $94.38 -1.12%
Microsoft Corp. (MSFT) $36.52 -0.99%
Procter & Gamble Co. (PG) $80.91 -0.95%
AT&T Inc. (T) $33.85 -0.88%
United Technologies Corp. (UTX) $107.62 -0.84%
Johnson & Johnson (JNJ) $90.66 -0.78%
Nasdaq 100 - Risers
Avago Technologies Ltd. (AVGO) $53.58 +6.95%
Seagate Technology Plc (STX) $52.95 +3.15%
Tesla Motors Inc (TSLA) $152.46 +3.06%
Nuance Communications Inc. (NUAN) $14.58 +2.75%
Netflix Inc. (NFLX) $374.87 +2.34%
Whole Foods Market Inc. (WFM) $57.31 +2.18%
Western Digital Corp. (WDC) $83.40 +2.13%
Symantec Corp. (SYMC) $23.00 +2.00%
Activision Blizzard Inc. (ATVI) $17.07 +1.97%
Facebook Inc. (FB) $54.86 +1.95%
Nasdaq 100 - Fallers
Sirius XM Holdings Inc (SIRI) $3.41 -2.84%
Regeneron Pharmaceuticals Inc. (REGN) $261.88 -2.45%
Gilead Sciences Inc. (GILD) $70.08 -1.88%
Intuitive Surgical Inc. (ISRG) $355.93 -1.75%
Celgene Corp. (CELG) $160.79 -1.58%
Adobe Systems Inc. (ADBE) $57.67 -1.42%
Liberty Global plc Series A (LBTYA) $83.81 -1.34%
Citrix Systems Inc. (CTXS) $57.93 -1.33%
Staples Inc. (SPLS) $15.22 -1.23%
Priceline.Com Inc. (PCLN) $1,160.90 -1.14% |
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| | Newspaper Round Up | | Wednesday newspaper round-up: Lloyds, BP, Debenhams... George Osborne will today receive a veiled rebuke from the National Audit Office for claiming that he sold a substantial stake in Lloyds Banking Group at a profit for taxpayers when the transaction crystallised a loss of at least 230m pounds. The September sale of a 3.2bn-pound stake was managed effectively and provided value for money, the NAO says in a report published today, but it nevertheless came at a loss for taxpayers — not the "profit" hailed by the Chancellor at the time. – The Times
Oil major BP has pulled off its second mega-deal in as many days after its consortium partners yesterday gave the green light to a $45bn (£28bn) plan to pump gas from the Caspian Sea into Europe. The European Union said that the deal to go ahead with stage two of the Shah Deniz project could provide up to 20% of the continent's energy needs. Commentators suggested that the project would help to wean Europe off its dependence on Russian gas. - Scotsman
Debenhams has imposed a 2.5% discount on goods from many of its suppliers, giving companies who produce own-label brands for the department store one day's notice of the changes. In a letter dated December 16th, Simon Herrick, the Chief Financial Officer, said that the company would pay 2.5% less than agreed into the accounts of suppliers on all outstanding payments. He said that the group would also appropriate a 2.5% contribution on orders that were placed but not yet delivered.- The Times
You win some, you lose some in the oil exploration business. BP said today its 2010 acquisition of Devon Energy's interests in the Gulf of Mexico, Brazil and Azerbaijan has led to both a significant find and a billion-dollar write-off. The write-off relates to the Pitanga exploration well in the Camamu-Almada basin of offshore Brazil, where no commercial quantities of oil or gas have been found. BP is writing off $230m for the cost of drilling the well and $850m - as a non-operating item - associated with the value allocated to the block it acquired from Devon and is now relinquishing. – Financial Times
House of Fraser, one of Britain's oldest retail chains, is in late-stage talks with a view to being bought by the family owned French department store Galeries Lafayette, it emerged last night. The retailer's board is understood to be keeping its options open. It may still proceed with a planned flotation on the London stock market early next year, with an expected value of £350m, if the French talks fail. – The Times
For the second time in three months, world markets are braced for the beginning of the end of history's greatest monetary experiment. The Federal Reserve's open market committee meets on Wednesday to decide whether to start to taper the $85bn it is spending each month on buying US bonds. The Fed sparked a day of global volatility in September when it decided against much expectation not to taper – billed in advance as "Septaper". Now, share prices are falling amid speculation the Fed will launch a "Dectaper" instead. - Financial Times | | |
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