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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 close: Markets flat after choppy session, services PMIs weakens - Miners limit gains after weak economic data
- Services PMIs from China, UK, Eurozone and US weaken
- RSA rises, UBS says takeover and break-up still possible
- Retailers in focus ahead of updates
techMARK 2,792.25 +0.13%
FTSE 100 6,730.73 0.00%
FTSE 250 16,049.30 +0.18%
UK markets ended flat on Monday after a choppy session amid an influx of economic data which showed that service-sector growth had slowed across the globe during December.
The FTSE 100, which briefly pushed into positive territory in afternoon trade, finished just 0.06 points higher at 6,730.73 after paring gains before the close of trade.
"The party season is well and truly over, and City trading desks are back to full capacity," said Market Analyst Alastair McCaig from IG following a quiet festive season in terms of company news and economic data.
He said that "traders are looking to keep their powder dry" ahead of a busy week that will see trading updates from a number of UK blue-chip stocks, along with central-bank meetings in the UK and Europe and the all-important US jobs report.
Services PMIs point to slowdown
Purchasing managers' indices (PMIs) from across the globe today showed that while activity in services sectors continued to expand in December, growth had eased on the previous month. This followed data last week which indicated a weakening in manufacturing growth in China, the US and UK in December.
There was a surprise slowdown in growth in the UK services sector in December with the PMI falling from 60 to 58.8, below the 60.3 consensus forecast.
The final estimate of the Eurozone services PMI was confirmed at 51 in December, down from 51.2 in November, with an ongoing contraction in France's services sector weighing on growth.
Figures released overnight saw the China services PMI survey decline from 52.5 to 50.9, while the US ISM services index unexpectedly fell from 53.9 to 53 (forecast: 54.7).
RSA gains after UBS comments, miners fall
RSA Insurance was a high riser after UBS raised its target for the stock and added it to its 'Alpha Preferences Most Preferred List', saying: "While there are significant uncertainties, we think that the balance of risks is to the upside." Meanwhile, the bank also said that a takeover and break-up of RSA still "remains a possibility", following recent market chatter.
Leading the downside were mining stocks despite a rise in metal prices today as investors reacted to the worsening economic figures out from top metals consumer China.
Fresnillo, Antofagasta, Randgold Resources and Rio Tinto all suffered heavy losses in afternoon trade. Gold miner Centamin, however, bucked the trend after beating analysts' estimates with its fourth-quarter production results.
Retailers were under pressure ahead of trading updates from the likes of Marks & Spencer, Tesco and Sainsbury later this week. The festive reporting season has so far been a mixed bag, with a profit warning from Debenhams contrasting with a stellar update from Next on Friday.
M&S was in the red today on speculation that it is a "likely candidate to suffer from the highly promotional and competitive clothing market", according to Equity Analyst Amisha Chohan from Sanlam Securities. Meanwhile, Sainsbury declined after rival chain Asda reported strong Christmas trading in both store and online.
Petrofac rose after Deutsche Bank lifted the stock to 'buy', while oilfield services peer Wood Group was dampened after the bank cut its rating to 'hold'. |
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FTSE 100 - Risers
RSA Insurance Group (RSA) 97.90p +6.24%
Hargreaves Lansdown (HL.) 1,491.00p +3.47%
Persimmon (PSN) 1,290.00p +2.46%
easyJet (EZJ) 1,597.00p +2.04%
Ashtead Group (AHT) 790.00p +1.74%
Barclays (BARC) 277.50p +1.70%
Coca-Cola HBC AG (CDI) (CCH) 1,754.00p +1.68%
Aggreko (AGK) 1,733.00p +1.64%
International Consolidated Airlines Group SA (CDI) (IAG) 414.00p +1.52%
ITV (ITV) 197.70p +1.49%
FTSE 100 - Fallers
Fresnillo (FRES) 735.50p -4.67%
Antofagasta (ANTO) 787.00p -4.14%
Randgold Resources Ltd. (RRS) 3,786.00p -3.52%
Rio Tinto (RIO) 3,266.00p -3.09%
G4S (GFS) 254.70p -2.11%
Anglo American (AAL) 1,275.00p -1.70%
Sainsbury (J) (SBRY) 367.80p -1.66%
BHP Billiton (BLT) 1,828.50p -1.56%
WPP (WPP) 1,361.00p -1.52%
Royal Mail (RMG) 572.00p -1.38%
FTSE 250 - Risers
Dunelm Group (DNLM) 979.00p +4.48%
Restaurant Group (RTN) 612.50p +3.73%
Diploma (DPLM) 723.00p +3.29%
Centamin (DI) (CEY) 46.55p +2.94%
Entertainment One Limited (ETO) 271.00p +2.85%
Barratt Developments (BDEV) 370.90p +2.83%
Telecom Plus (TEP) 1,797.00p +2.69%
Pace (PIC) 320.30p +2.66%
Halfords Group (HFD) 457.40p +2.53%
UDG Healthcare Public Limited Company (UDG) 335.00p +2.45%
FTSE 250 - Fallers
Polymetal International (POLY) 564.50p -4.48%
Kazakhmys (KAZ) 201.30p -4.05%
Wood Group (John) (WG.) 652.00p -3.76%
NMC Health (NMC) 436.50p -2.98%
Imagination Technologies Group (IMG) 179.60p -2.92%
International Personal Finance (IPF) 520.00p -2.44%
Petra Diamonds Ltd.(DI) (PDL) 119.00p -2.14%
KCOM Group (KCOM) 96.65p -2.13%
Micro Focus International (MCRO) 765.00p -1.92%
Vedanta Resources (VED) 889.50p -1.77% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed after Eurozone, US services data - Eurozone service activity and investor confidence grows
- US services activity slows
- Yellen to be confirmed as Fed Chair
- German inflation rises in line with forecasts
FTSE 100: 0.00%
DAX: -0.08%
CAC 40: -0.47%
FTSE MIB: 0.63%
IBEX 35: 0.92%
Stoxx 600: -0.20%
European stocks were little changed as Eurozone service activity grew in line with expectations while US services weakened.
The purchasing managers' index (PMI) for Eurozone services came in at 51 in December, in line with expectations and unchanged from the previous month. A reading above 50 signals expansion.
Also in the Eurozone, investor confidence improved with the Sentix index rising to 11 from 8 in December, beating the 9.5 forecast.
In the US, the Institute for Supply Management's non-manufacturing PMI for December fell from 53.9 to 53, showing that activity growth eased last month. Analysts had expected the PMI to rise to 54.7.
Separately, data showed that factory orders in the US increased 1.8% in November compared with a revised 0.5% fall in October and ahead of the 1.7% gain expected.
US policymakers are turning to economic data to gauge whether the world's biggest economy is ready for a further reduction to monetary stimulus after the Federal Reserve last month announced it would cut monthly bond purchases to $75bn from $85bn.
The US Senate was expected to confirm Janet Yellen as the next Chairman of the Fed later today, succeeding Ben Bernanke who steps down at the end of the month.
In the UK, the services PMI dropped to 58.8 in December from 60 in November. Economists had expected a reading of 60.3.
In China, HSBC services PMI for December declined to 50.9 from 52.5 in November, which could fuel fears of a slowdown in the world's second largest economy.
German inflation, PMIs
German inflation rose by 1.4% in December from 1.3% in the prior month, in line with forecasts.
PMI services in Europe's largest economy fell to 53.5 in December from 54 in November, missing expectations for an unchanged reading.
The country's chancellor, Angela Merkel, was forced to cancel her meetings for the next three weeks after breaking her pelvis in a skiing accident in Switzerland.
Ziggo, RSA
Ziggo's shares jumped following reports Liberty Global Plc is preparing an acquisition of the Dutch broadband provider.
RSA Insurance Group advanced after a report said the insurer's Irish unit won't require further capital injections.
Remy Cointreau retreated as Natixis lowered its rating on the producer of Remy Martin cognac to 'neutral' from 'buy' after Frederic Pflanz resigned as Chief Executive Officer last week.
Sanofi slumped after JPMorgan Chase & Co. lowered its recommendation on the drug-maker to 'neutral' from 'overweight', citing a possible weak earnings outlook in 2014.
Precious metal miners Randgold Resources and Fresnillo were trading firmly lower this morning as gold and silver prices weakened.
Commerzbank rallied after Euro am Sonntag reported that the lender plans to expand its wealth-management unit.
Centamin rose after its full-year production exceeded its forecast.
The euro was up 0.35% to $1.3637.
Brent crude futures gained $0.112 t0 107.010 per barrel, according to the ICE, amidst continuing media coverage of recently increased tensions in the Middle East, and Iraq in particular. |
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| | US Market Report | | US open: Stocks mixed as ISM services index unexpectedly falls - ISM services index eases in December
- Factory orders beat expectations in November
- Yellen to be confirmed as Fed Chair
- T-Mobile in 3.3bn-dollar spectrum deal with VZW
Dow Jones: 0.03%
Nasdaq: -0.34%
S&P 500: -0.01%
US markets opened flat to slightly lower on Monday morning in New York as investors geared up for a busy week, with figures released today showing a slowdown in service-sector growth across the globe during December.
"Trading volumes should pick up significantly this week, as traders return to their desks following the festive period and the number of potential catalysts also rises substantially," said Market Analyst Craig Erlam from Alpari.
While US service-sector data and factory orders were in focus today, the minutes of the latest Federal Open Market Committee meeting and the all-important jobs report due out later on in the week are likely to grab the most attention.
"This week should go a long way to telling us whether the Fed made the right decision last month in deciding to reduce the pace of its asset purchases, or whether it should have waited for more proof that the recovery is in fact sustainable," Erlam said.
The US Senate is also anticipated to shortly confirm Janet Yellen as Fed Chair to succeed Ben Bernanke who steps down at the end of the month. She would take over on February 1st.
Acting as a backdrop, the Financial Times wrote today on how US shares - when measured by the cyclically-adjusted price-to-earnings (Cape) multiple - are overpriced. The so-called Shiller Cape for the US stockmarket now stands at 25, almost exactly where it was standing at its last peak, in 2007.
Economic data in focus
The Institute for Supply Management's US non-manufacturing purchasing managers' index (PMI) for December unexpectedly fell from 53.9 to 53, showing that activity growth eased last month. Analysts had expected the PMI to rise to 54.7.
This follows a raft of service-sector PMIs released earlier today which showed that growth had also slowed slightly last month in China, the Eurozone and the UK.
Separately, data showed that factory orders in the US rose 1.8% in November compared with a revised 0.5% fall in October and ahead of the 1.7% gain expected.
T-Mobile to buy spectrum from Verizon
T-Mobile's shares gained after the US wireless carrier agreed to buy spectrum licences from Verizon Wireless for about $2.4bn, along with the transfer of spectrum worth $950m. "This is a great opportunity to secure low-band spectrum in many of the top markets in America," said T-Mobile Chief Exectuvie John Legere.
Intel fell ahead of a speech by its Chief Executive Officer Brian Krzanich who is set to announce the chipmaker's latest strategy at the International Consumer Electronics Show today.
General Electric edged lower after saying it will buy some assets from Thermo Scientific for about $1.06bn to grow its life sciences division.
Solar power firm SolarCity jumped early on after Goldman Sachs added the stock to its 'conviction buy' list, while First Solar fell after the bank downgraded it to 'sell'. |
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| | Broker Tips | | Broker tips: RSA Insurance, Petrofac, Centamin RSA Insurance was making gains on Monday morning after UBS raised its target on the stock by 13 per cent, saying that the firm's struggles in Ireland could be used as a 'catalyst for change'.
Meanwhile, the bank also said that a takeover and break-up of RSA still "remains a possibility", following recent market chatter.
Analyst James Shuck reiterated his 'buy' rating on RSA, as he upped his target from 100p to 113p. The stock was also added to UBS' 'Alpha Preferences Most Preferred List'.
Deutsche Bank has lifted its recommendation for oilfield services group Petrofac from 'hold' to 'buy', saying that the stock's price at the moment is overly discounting risks.
"Sentiment [...] has arguably bottomed and with a return to good growth likely to become more visible in 2014, trading on 8.5 times estimated fiscal year 2015 earnings, we upgrade to 'buy'," said Research Analyst Sebastian Yoshida.
Canaccord Genuity has labelled Egypt-focused gold miner Centamin as a 'speculative buy' after fourth-quarter production results smashed expectations on Monday.
"The results are positive and substantially better than we expected as we had based our forecast on the company's guidance of lower production in Q4/13 versus the average in Q1-Q3 due to the Stage 4 commissioning," said analysts Dmitry Kalachev and Peter Mallin-Jones. | | |
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