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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: Mining stocks drag UK markets lower early on - Miners fall after steep drop in metal prices yesterday
- Risk appetite scaled back ahead of US jobs report
- HSBC downgraded by Nomura to 'neutral'
techMARK 2,657.15 +0.13%
FTSE 100 6,580.97 -0.22%
FTSE 250 15,306.73 -0.18%
Continued weakness in the mining sector dampened the FTSE 100 in London on Tuesday morning as investor risk appetite was being scaled back ahead of a number of risk events later this week.
While things look rather busy on the macro agenda over the coming days - with plenty of economic data on tap and policy meetings in both the UK and Europe - the focus is likely to be on the all-important US jobs report due Friday, which could be a deciding factor in the Federal Reserve's impending taper of stimulus.
Global manufacturing figures for November revealed yesterday beat forecasts across the board but an unexpected pick-up in US manufacturing activity to a two-and-a-half-year high was met with a mixed reaction from financial markets.
"Obviously, the Fed is more focused on the labour market data specifically but, at the margin, this is more evidence is favour of an earlier taper," said analyst Amna Asaf from Capital Economics.
Today's schedule looks relatively light but the purchasing managers' index (PMI) for the UK construction sector will be closely watched this morning. The PMI is expected to slip to 59 for November, from 59.4 the month before.
Miners fall, HSBC hit by Nomura downgrade
Mining stocks were once again out of favour today after some heavy falls on Monday following a sell-off across the commodities market which saw gold drop to a five-month low. While metals were broadly firmer this morning, the share prices of Antofagasta, Fresnillo, Vedanta, Randgold, Anglo American and BHP Billiton were registering losses early on.
Rio Tinto was also in the red after saying that it will cut capital spending to $11bn in 2014 and to around $8bn in 2015, from the forecast $14bn to be spent this year. "Our results so far show we are taking decisive action, making tough decisions and advancing at pace," Chief Executive Sam Walsh is expected to say at an investor seminar today.
Global banking group HSBC was in the red early on after analyst Chintan Joshi from Nomura downgraded the stock from 'buy' to 'neutral', saying that regulation is the "main headwind to the dividend story".
RBS was named Nomura's "least preferred UK bank", weighing on the share price this morning. "We forecast downside from current levels", Joshi said.
Heading the other way was BAE Systems after being upgraded to 'sector performer' by RBC Capital Markets and BG Group after Liberum Capital raised its rating to 'buy'. |
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| FTSE 100 - Risers
Next (NXT) 5,550.00p +2.78%
Smith & Nephew (SN.) 835.00p +2.71%
William Hill (WMH) 388.30p +1.92%
United Utilities Group (UU.) 657.00p +1.00%
Sports Direct International (SPD) 750.50p +0.94%
Hargreaves Lansdown (HL.) 1,219.00p +0.58%
Kingfisher (KGF) 371.70p +0.57%
Aggreko (AGK) 1,596.00p +0.57%
Lloyds Banking Group (LLOY) 78.99p +0.52%
Bunzl (BNZL) 1,397.00p +0.43%
FTSE 100 - Fallers
Antofagasta (ANTO) 758.50p -2.82%
Petrofac Ltd. (PFC) 1,213.00p -1.62%
Aberdeen Asset Management (ADN) 476.00p -1.49%
Tullow Oil (TLW) 853.50p -1.39%
Admiral Group (ADM) 1,199.00p -1.32%
Barclays (BARC) 266.70p -1.31%
Weir Group (WEIR) 2,108.00p -1.26%
Old Mutual (OML) 193.90p -1.17%
Standard Life (SL.) 343.70p -1.15%
CRH (CRH) 1,522.00p -1.10%
FTSE 250 - Risers
ITE Group (ITE) 310.40p +5.33%
IP Group (IPO) 184.90p +2.67%
Betfair Group (BET) 1,056.00p +2.52%
Micro Focus International (MCRO) 833.50p +2.46%
NMC Health (NMC) 404.90p +1.86%
Rank Group (RNK) 141.40p +1.73%
RPC Group (RPC) 512.50p +1.49%
Ted Baker (TED) 2,054.00p +1.28%
Keller Group (KLR) 1,038.00p +1.17%
Ashtead Group (AHT) 695.50p +1.16%
FTSE 250 - Fallers
Hochschild Mining (HOC) 131.70p -4.08%
Polymetal International (POLY) 489.70p -3.98%
Centamin (DI) (CEY) 40.32p -3.05%
Kazakhmys (KAZ) 218.90p -2.28%
Investec (INVP) 414.70p -2.24%
Evraz (EVR) 102.70p -2.10%
Ferrexpo (FXPO) 170.30p -2.01%
Inmarsat (ISAT) 673.00p -1.75%
Intu Properties (INTU) 311.60p -1.67% |
| | UK Event Calendar | | Tuesday December 03
INTERIMS
API Group, Betfair Group, Daisy Group, Greene King, Northgate, Park Group, Tricorn Group, Vianet Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Auto Sales (US) (15:00)
Producer Price Index (EU) (10:00)
FINALS
Gooch & Housego, Infrastrata, ITE Group, Pressure Technologies
IMSS
Wolseley
AGMS
Aberdeen Asian Smaller Companies Inv Trust, Eruma
UK ECONOMIC ANNOUNCEMENTS
BRC Sales Monitor (00:01)
PMI Construction (09:30)
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks mostly lower on US Fed tapering concerns - Strong US data fuels Fed tapering fears
- ECB to introduce further easing, says Danske Bank
- Cameron vows to back EU-China trade deal
FTSE 100: -0.19%
DAX: -0.12%
CAC 40: -0.60%
FTSE MIB: 0.12%
IBEX 35: -0.23%
Stoxx 600: -0.20%
European equities were mostly lower as strong US data fuelled concerns about the prospect of a December tapering of monetary stimulus from the Federal Reserve.
Yesterday's release of better-than-expected manufacturing data sent stocks sliding.
The Institute for Supply Management (ISM) said its manufacturing sector purchasing managers' index (PMI) rose to 57.3 in November from 56.4 a month earlier, exceeding the 55.1 forecast and the 50 reading that signals expansion.
Fed policymakers are turning to economic data to gauge the health of the world's biggest economy in deciding when to start scaling back its monthly $85bn bond buying programme.
While most economists don't see a tapering until March 2014, the Fed has indicated that tapering could come as soon as its mid-December meeting as more robust US data suggests the country is recovering faster than expected.
The pick-up in the economy comes despite the partial government shutdown in October.
"The shutdown actually appears to have had absolutely no impact on the data that we've seen so far, which is good for the economy but bad for stock markets," said Alpari analyst Craig Erlam.
"This is the problem with the current situation in the US. A deterioration in the data sends US indices to record highs while signs of improving economic conditions sends investors rushing for the exit."
Investors will now wait for all-important US employment numbers on Friday.
ECB monetary stimulus
The European Central Bank (ECB) will introduce further monetary easing but its December meeting is too soon for such a move, according to Danske Bank Markets.
The bank noted that while inflation rose to 0.9% in November from 0.7% in October, it is still well below the ECB's 2% target. Falling inflation prompted the central bank to cut its benchmark interest rate to 0.25% from 0.5% last month.
"Inflation will still be top of the agenda and we expect Draghi to be dovish and signal that they are ready to act to ensure inflation expectations remain well anchored," Danske said of this month's upcoming meeting.
"The need for more monetary stimulus is set to be reflected in the ECB's projections. The inflation forecast for 2014 is expected to be lowered to 1% and the first release of the 2015 inflation projection should remain far below the ECB's target."
Dankse also expects the ECB to refrain from cutting rates further and instead introduce a new three-year long term refinancing operation (LTRO) in the first quarter, when data for the Asset Quality Review (AQR) has been collected.
Meanwhile, UK Prime Minister David Cameron has vowed to back a multi-billion-dollar free trade deal between China and the European Union.
During his three-day visit with about 100 business people, Cameron said Britain was open to Chinese investment and was well-placed to take advantage of its market liberalisation.
His remarks are likely to irritate the European Commission which is said to be opposed to such a deal out of fear that it risks flooding the 28-nation bloc with cheap Chinese imports.
ThyssenKrupp, Sonova
ThyssenKrupp declined after a report obtained by Bloomberg News showed the steelmaker will sell 51m new shares at a price range between €17.05 and €17.15 each.
Sonova slumped after Morgan Stanley downgraded the stock to 'equal weight' from 'overweight'.
Miners including Antofagasta, Fresnillo and Vedanta Resources edged lower after the price of commodities dropped sharply yesterday with gold hitting a five-month low.
Euro strengthens against dollar
The euro rose 0.20% to $1.3569.
West Texas Intermediate crude futures gained $2.06 to $111.680 per barrel on the ICE. |
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| | US Market Report | | US close: Stocks fall on taper speculation, retail sales - Taper speculation increases after strong manufacturing figures
- Black Friday retail sales disappoint
- Shiller raises concerns about 'boom' on Wall Street
Dow Jones: -0.48%
Nasdaq: -0.37%
S&P 500: -0.27%
Heightened speculation about tapering and a disappointing outcome for retail sales over Black Friday pressure US stocks lower on Monday, with markets extending losses before the close.
Stocks started the day lower as investors digested an unexpected pick-up in manufacturing activity to a two-and-a-half-year high in November, and what this means for monetary policy ahead of the Federal Reserve's next meeting on December 17-18th.
"Obviously, the Fed is more focused on the labour market data specifically but, at the margin, this is more evidence is favour of an earlier taper," said analyst Amna Asaf from Capital Economics.
The ISM's measure of US manufacturing unexpectedly increased to 57.3 in November from 56.4 the month before. Analysts were expecting a figure closer to 55.1. Meanwhile, the final reading of Markit's index on US manufacturing rose to 54.7 last month, from 56.4 in October and ahead of initial estimates.
In other economic data, construction spending in the US rose by 0.8% over the month (consensus: 0.4%) in October but fell by 0.3% in the previous month (consensus: 0.5%).
Black Friday, considered the start to the US holiday shopping season, saw its first drop in sales since 2009, according to a National Retail Federation survey conducted by Prosper Insights & Analytics over the holiday weekend. Total spending from Thanksgiving day last Thursday and through the weekend was estimated to have dropped by 2.9% to $57.4bn (£35bn). Average spending per shopper fell 3.9% to $407.02 (£247.92).
Stocks were also being weighed down by comments from Nobel Prize for Economics laureate Robert Shiller, who raised concerns about an equity-market bubble on Wall Street. Speaking to Germany's Der Spiegel Sunday magazine, he said that the "boom" in the US stock market "makes me most worried […] because our economy is still weak and vulnerable".
Retailers in focus in Black Friday aftermath
A host of retailers were in the red after the weekend's sales figures disappointed, with Kohl's, Macy's, Urban Outfitters, JC Penney and Dollar General all registering losses.
In contrast, internet retailers eBay and Amazon rallied as sentiment remains high ahead of 'Cyber Monday'. Online spending on Black Friday rose 15% to a record $1.2bn, according to ComScore Inc.
US energy drink maker Monster Beverage advanced after JPMorgan raised its recommendation on the shares to 'overweight' from 'neutral'. 3M declined after analysts at Morgan Stanley downgraded their rating to 'underweight' following a strong run.
Gold producer Newmont retreated as the price of the yellow metal dropped as much as 1.4%, the biggest fall in more than a week.
Data-heavy week for markets
Later in the week will be the release of reports on the US housing sector, consumer confidence and employment. However, Alastair Winter, Chief Economist at Daniel Stewart & Co, said that the November non-farm payrolls figures on Friday will be the "big number of the week".
Anything close to October's surprise 204,000 jump is likely to "get pulses racing and equity prices falling" given the recent speculation surrounding an impending taper of quantitative easing.
Fed policymakers have hinted that a scaling back of its $85bn per month in asset purchases could come as soon this month, but the majority economists expect a March 2014 start.
S&P 500 - Risers
Forest Laboratories Inc. (FRX) $56.32 +9.76%
Marathon Petroleum Corporation (MPC) $87.41 +5.64%
Phillips 66 Common Stock (PSX) $71.36 +2.51%
Valero Energy Corp. (VLO) $46.83 +2.43%
Dow Chemical Co. (DOW) $39.98 +2.36%
Carmax Inc. (KMX) $51.51 +2.30%
Hospira Inc. (HSP) $40.09 +1.98%
H&R Block Inc. (HRB) $28.43 +1.94%
Genworth Financial Inc. (GNW) $15.40 +1.92%
Legg Mason Inc. (LM) $39.86 +1.92%
S&P 500 - Fallers
Ingersoll Rand Ltd. (IR) $55.56 -22.21%
Sears Holdings Corp. (SHLD) $60.20 -5.24%
3M Co. (MMM) $127.68 -4.37%
Newmont Mining Corp. (NEM) $23.83 -4.03%
Graham Holdings Co. (GHC) $649.62 -3.55%
Urban Outfitters Inc. (URBN) $37.66 -3.49%
D. R. Horton Inc. (DHI) $19.33 -2.77%
GameStop Corp. (GME) $46.97 -2.65%
XL Group Plc (XL) $31.18 -2.53%
United States Steel Corp. (X) $26.16 -2.42%
Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $38.45 +0.84%
Visa Inc. (V) $205.13 +0.82%
Merck & Co. Inc. (MRK) $50.18 +0.70%
E.I. du Pont de Nemours and Co. (DD) $61.74 +0.59%
Walt Disney Co. (DIS) $70.91 +0.52%
Goldman Sachs Group Inc. (GS) $169.72 +0.46%
Pfizer Inc. (PFE) $31.83 +0.32%
Wal-Mart Stores Inc. (WMT) $81.11 +0.12%
Exxon Mobil Corp. (XOM) $93.52 +0.04%
General Electric Co. (GE) $26.66 +0.00%
Dow Jones I.A - Fallers
3M Co. (MMM) $127.68 -4.37%
Travelers Company Inc. (TRV) $89.00 -1.92%
International Business Machines Corp. (IBM) $177.48 -1.22%
AT&T Inc. (T) $34.80 -1.16%
Home Depot Inc. (HD) $79.77 -1.12%
Procter & Gamble Co. (PG) $83.34 -1.04%
McDonald's Corp. (MCD) $96.51 -0.88%
Cisco Systems Inc. (CSCO) $21.09 -0.75%
Verizon Communications Inc. (VZ) $49.26 -0.73%
American Express Co. (AXP) $85.29 -0.59%
Nasdaq 100 - Risers
eBay Inc. (EBAY) $51.35 +1.64%
Seagate Technology Plc (STX) $49.84 +1.63%
Biogen Idec Inc. (BIIB) $294.84 +1.33%
DIRECTV (DTV) $66.94 +1.26%
Baidu Inc. (BIDU) $168.66 +1.25%
Fastenal Co. (FAST) $47.11 +1.25%
Broadcom Corp. (BRCM) $26.98 +1.09%
Nuance Communications Inc. (NUAN) $13.66 +1.04%
Fiserv Inc. (FISV) $111.00 +1.01%
Green Mountain Coffee Roasters Inc. (GMCR) $68.06 +1.01%
Nasdaq 100 - Fallers
Sears Holdings Corp. (SHLD) $60.20 -5.24%
Randgold Resources Ltd. Ads (GOLD) $67.29 -4.89%
Tesla Motors Inc (TSLA) $124.17 -2.44%
Ross Stores Inc. (ROST) $74.69 -2.31%
Citrix Systems Inc. (CTXS) $58.17 -1.94%
Charter Communications Inc. (CHTR) $132.65 -1.81%
Expedia Inc. (EXPE) $62.61 -1.70%
Fossil Group Inc (FOSL) $125.14 -1.67%
Comcast Corp. (CMCSA) $49.12 -1.50%
Catamaran Corp (CTRX) $44.99 -1.40% |
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| | Newspaper Round Up | | Tuesday newspaper round-up: BP, China, Royal Bank of Scotland BP won a big victory in its battle to limit the cost of compensation for its 2010 oil spill in the Gulf of Mexico after an appeals court called for an injunction to suspend payments to businesses that had not suffered losses as a result of the disaster. A majority on a three-judge panel of the Fifth Circuit appeals court ruled that a lower district court should draw up an injunction "tailored so that those who experienced actual injury traceable to loss from the Deepwater Horizon accident continue to receive recovery, but those who did not do not receive their payments until this case is fully heard and decided". - Financial Times
The US called on China to rescind its controversial new air defence zone procedures on Monday because of the risk of accidents, as vice-president Joe Biden began a likely tense week of meetings with leaders in northeast Asia. Raising the stakes in the diplomatic dispute over the new Chinese rules, the US state department warned Beijing that the confusion over the zone could endanger airline safety. It was unclear whether the US was calling on China to rescind the actual zone, or some of the procedures that Beijing said were required to be followed. - Financial Times
Millions of NatWest and Royal Bank of Scotland debit cardholders were left high and dry last night after a technical glitch crashed payment systems on one of the busiest shopping days of the year. As high street and online customers tried to complete transactions on what retailers had called Cyber Monday, they were told that payment had been declined. - The Times
Pension funds could be given as long as 20 years to get to grips with their ballooning deficits, it was claimed yesterday, as the Pensions Regulator outlined plans to relax the rules on funding. It unveiled a proposed new regime to enshrine the Government's requirement that defined-benefit pension fund trustees should take into account an employer's need to invest for sustainable growth when asking for shortfalls to be addressed. Experts said that, in effect, the regulator was giving employers more breathing space to close deficits. - The Times
The Serious Fraud Office is examining allegations Royal Bank of Scotland drove some of Britain's best-known retailers including Peacocks, Clinton Cards and HMV into the wall. The taxpayer-controlled bank was accused in a Government-backed report last week of 'systematically' profiting from vulnerable, mainly small, business customers placed in a division called its Global Restructuring Group (GRG). The SFO is already considering a criminal investigation into the treatment of these small businesses. - The Daily Mail
The government is coming under pressure from energy firms to make a second stage of cuts to green levies or face gas and electricity price rises in the months before the 2015 election. Ministers agreed to scale back the Energy Company Obligation (Eco) scheme that cuts the fuel usage of poor households, while funding another subsidy out of taxation, reducing average energy bills by £50. - The Guardian | | |
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