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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: BSkyB leads markets higher after decent economic data - Markets at highest level since October 30th
- UK inflation falls to BoE target
- Eurozone industrial production, US retail sales beat forecasts
- UBS highlights potential M&A at BSkyB
techMARK 2,818.48 +0.54%
FTSE 100 6,766.86 +0.14%
FTSE 250 16,236.02 -0.12%
Markets managed to finish in positive territory on Tuesday despite a poor start, as bid speculation surrounding BSkyB and strong gains in the banking and pharmaceutical sectors lifted the FTSE 100.
Meanwhile, investors were also reacting to a surprise fall in UK inflation, an acceleration in industrial production growth in the Eurozone and better-than-expected US retail sales.
"What looked like a dismal start to the session soon turned into a significant reversal, with investors' appetite for risk not yet saturated from what has been a stellar 2013 for stocks," said David White, Trader at Spreadex.
London's benchmark index finished 9.71 points higher at 6,766.86, its highest closing price since October 30th.
After hitting an intraday low of 6,694.08 early on, the FTSE 100 had largely pared losses by midday after consumer price index (CPI) figures showed that the annual rate of UK inflation had nudged down to the Bank of England's 2% target in December, from 2.1% the previous month.
Meanwhile, industrial production in the Eurozone rose at a year-on-year rate of 3% in November, up from a revised 0.5% in October and ahead of the 1.8% gain expected. US retail sales increased by 0.2% in December, slowing from a revised 0.4% fall in November but ahead of analysts' forecasts for a 0.1% rise.
Gains in London were also bolstered by a strong start on Wall Street as US stocks recovered after a sharp sell-off the day before. The US bank reporting season got off to fairly quiet start today with bellwethers JPMorgan Chase & Co and Wells Fargo & Co trading broadly flat after their quarterly results.
BSkyB up on M&A speculation
Broadband and pay-TV group BSkyB was the strongest performer of the day after UBS upgraded the stock to 'buy', saying that competitive concerns have been priced in and growth opportunities are now being overlooked. It also sees M&A upside in the stock, speculating about a possible merger by Fox to create 'Sky Europe' and even a mobile merger with either Vodafone UK or O2 UK.
AstraZeneca and Shire were also providing a lift on the FTSE 100 after the pharmaceutical peers both gave upbeat outlooks. AstraZeneca said that it expects to return to growth sooner than analysts currently predict, while Shire raised its earnings guidance for 2013 to the upper end of previous expectations.
The banking sector was also in demand, with stocks extending gains made yesterday when Basel eased rules in regards to capital requirements. Standard Chartered, Lloyds, Barclays and RBS were all higher by the close.
Ashmore, the UK fund manager that invests in emerging markets, said assets under management fell 4.1% during the quarter ended December 31st amid continued market volatility, pressuring the stock as much as 12% lower in morning trade.
Financial peers Schroders, Aberdeen Asset Management, Old Mutual and Henderson were also falling sharply.
UK recruitment agency Michael Page was heading lower after reporting a 1.2% fall in fourth-quarter gross profit as companies remained reluctant to take on permanent staff.
Oil engineering firm AMEC pulled back after a strong rise the day before following the proposed takeover of Swiss rival Foster Wheeler. Tullow Oil was also retreating as recent bid speculation subsided ahead of the firm's trading update tomorrow. |
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FTSE 100 - Risers
British Sky Broadcasting Group (BSY) 871.00p +3.75%
Shire Plc (SHP) 2,991.00p +2.75%
Sainsbury (J) (SBRY) 360.50p +2.65%
AstraZeneca (AZN) 3,755.50p +2.51%
ITV (ITV) 207.30p +2.22%
ARM Holdings (ARM) 997.00p +1.94%
Standard Chartered (STAN) 1,315.00p +1.78%
Royal Mail (RMG) 597.00p +1.70%
Lloyds Banking Group (LLOY) 85.33p +1.55%
Hargreaves Lansdown (HL.) 1,508.00p +1.55%
FTSE 100 - Fallers
Amec (AMEC) 1,067.00p -3.44%
Intertek Group (ITRK) 2,993.00p -2.48%
Tullow Oil (TLW) 856.50p -2.45%
William Hill (WMH) 372.00p -2.29%
Sage Group (SGE) 393.60p -2.02%
Schroders (SDR) 2,547.00p -1.66%
Aberdeen Asset Management (ADN) 453.10p -1.48%
Prudential (PRU) 1,350.00p -1.46%
Sports Direct International (SPD) 738.00p -1.27%
Coca-Cola HBC AG (CDI) (CCH) 1,777.00p -1.17%
FTSE 250 - Risers
Partnership Assurance Group (PA.) 327.70p +4.16%
QinetiQ Group (QQ.) 236.70p +4.04%
Imagination Technologies Group (IMG) 182.40p +3.93%
Greencore Group (GNC) 235.70p +3.65%
CSR (CSR) 695.00p +2.96%
African Barrick Gold (ABG) 189.60p +2.93%
Homeserve (HSV) 302.90p +2.92%
esure Group (ESUR) 269.00p +2.91%
Kenmare Resources (KMR) 19.15p +2.68%
Rank Group (RNK) 143.60p +2.57%
FTSE 250 - Fallers
Ashmore Group (ASHM) 358.00p -12.43%
Ted Baker (TED) 2,225.00p -4.38%
JD Sports Fashion (JD.) 1,566.00p -3.81%
Brewin Dolphin Holdings (BRW) 316.00p -3.51%
Countrywide (CWD) 599.00p -3.23%
Ocado Group (OCDO) 524.50p -3.05%
Henderson Group (HGG) 229.40p -2.55%
Foxtons Group (FOXT) 338.00p -2.45%
AL Noor Hospitals Group (ANH) 869.00p -2.36%
Michael Page International (MPI) 478.00p -2.27% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Better-than-expected US retail sales boost stocks - UK inflation falls to BoE target
- US retail sales rise
- Eurozone industrial output expands
FTSE 100: 0.16%
DAX: 0.23%
CAC 40: 0.17%
FTSE MIB: 0.17%
IBEX 35: 0.06%
Stoxx 600: 0.13%
European stocks rallied as UK inflation reached the Bank of England's (BoE) target and as US retail sales rose more than forecast.
The UK's consumer price index dropped to 2% in December from 2.1% the prior month, surprising analysts who had expected it to remain unchanged.
The fall was driven by food and drink prices and is likely to ease pressure on the BoE to raise interest rates following the recent recovery in the economy.
French CPI, on the other hand, rebounded last month, rising by 0.3% in national terms after measures were unchanged in November.
A better-than-expected report on US retail sales provided a boost to markets in the afternoon. Sales increased by 0.2% in December after a 0.4% rise in November. Economists had pencilled in a 0.1% advance.
"Overall, this report supports our view that a 4% annualised rise in real consumption will help to generate a decent 3% gain in overall gross domestic product in the fourth quarter of last year," according to Capital Economics. "That would provide a good platform for this year."
The report is also likely to fuel speculation that the Federal Reserve will announce another round of monetary stimulus tapering at the end of the month.
The US central bank began unwinding monthly bond purchases by $10bn to $75bn in December after a series of upbeat economic reports pointed to recovery in the world's biggest economy.
Eurozone industrial output grows
Eurozone industrial production jumped 3% year-on-year in November, compared to an increase of 0.5% in October and the consensus for a 1.8% uptick.
Elsewhere in the bloc, European Central Bank (ECB) Governing Council member Ewald Nowotny said the Eurozone will grow stronger this year than had been expected.
The ECB predicts gross domestic product (GDP) to grow by 1.1% this year. Nowotny, who is also the head of Austria's central bank, said the outlook for Europe as a whole was now much better than it was a year ago.
Shire, BSkyB
Shire gained after the drugmaker said it predicts 2013 earnings per share will meet the upper end of its forecasts.
BSkyB advanced after UBS upgraded the media company to 'buy' this morning, saying competitive concerns have been priced in and growth opportunities are now being overlooked.
Ashmore tumbled after the fund manager's assets under management fell 4.1% to $75.3bn in the three months ended December 31st.
Celesio declined after McKesson said it failed to receive enough backing from shareholders to buy the drug distributor.
The euro rose 0.02% to $1.3674.
Brent crude futures fell $0.471 to $106.250 per barrel, according to data on the ICE. |
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| | US Market Report | | US open: JPMorgan results and retail sales lift markets - Retail sales beat forecasts in December
- JPMorgan up, Wells Fargo down after results
- Time Warner rejects offer from Malone's Liberty and Charter
Dow Jones: 0.07%
Nasdaq: 0.67%
S&P 500: 0.43%
US markets were trading higher on Tuesday morning following a broad sell-off the day before, with upbeat retail sales lifting sentiment as investors assessed quarterly results from some banking heavyweights.
Stocks fell sharply during Monday's session as concerns about lofty equity valuations dampened risk appetite ahead of a busy week for corporate earnings.
Meanwhile, hopes over the continuity of the Federal Reserve's stimulus programme were quashed last night by Atlanta Fed President Dennis Lockhart, who said that he supports "similar tapering steps" as the one taken in December in spite of Friday's woeful jobs report.
Retail sales "stronger than they look"
US retail sales rose at a month-on-month rate of 0.2% in December, ahead of the 0.1% increase expected by the consensus of analysts. However, November's 0.7% gain was revised lower to 0.4%.
Senior US Economist Paul Dales from Capital Economics said that the sales are "stronger than they look" and paint a strong picture for real consumption at the end of last year.
He said: "Overall, this report supports our view that a 4% annualised rise in real consumption will help to generate a decent 3% gain in overall gross domestic product in the fourth quarter of last year. That would provide a good platform for this year."
In other economic data, the NFIB Small Business Optimism index increased to 93.9 in December, from a reading of 92.5 in November and ahead of the 93.1 estimate.
Banks in focus, Time Warner Cable rebuffs offer
JPMorgan Chase & Co was making gains in morning trade despite reporting earnings per share (EPS) of $1.30 in the fourth quarter, down 7.3% on the year before due to poor results from its investment-banking division. However, adjusted EPS came in at $1.40 were ahead of analysts' estimates. Revenues, meanwhile, fell a less-than-expected 1.1% to $24.11bn.
In contrast, sector peer Wells Fargo & Co declined after beating expectations with a 10% rise in fourth-quarter EPS to $1, compared with the 98 cents forecast. Revenues were down 5.8% at $20.67bn, coming in below estimates.
US cable television group Time Warner rose after rejecting a third "lowball" takeover bid from smaller rival Charter Communications, a company backed by John Malone's Liberty Media.
Nasdaq-listed Charter, which is the fourth biggest cable company in the US, has publicly offered $132.50 per share for Time Warner, the second biggest cable company in the country, which is only slightly above Monday's closing share price.
Google rallied as the internet search engine revealed it was buying home-automation company Nest Labs for $3.2bn.
Workday declined following news the business-software maker plans to sell 6m shares.
The US 10-year government yield was up two basis points at 2.85%.
West Texas Intermediate crude futures rose $0.74 to $92.54 per barrel, according to the ICE. |
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| | Bonds | | US retail sales come in slightly below forecasts US retail sales volumes grew by 0.2 per cent month-on-month (4.1% year-on-year) during November, to reach 488.7bn dollars, according to the latest data available from the US census bureau.
The consensus estimate had been for a reading of 0.2%.
Excluding automobiles retail sales increased by 0.7% (consensus: 0.4%).
Sales of motor vehicles dropped by 1.8% during that same month when compared with October.
The previous month’s estimate for total retail sales volumes was revised down to show an advance of 0.4% instead of the preliminary calculation of an 0.7% over the month rise in November.
The estimate for the gain in sales excluding automobiles, for November, was similarly revised lower, to show an 0.1% rise instead of the 0.4% initially thought.
Commenting on the data analysts at Capital Economics highlighted the fact that “over the fourth quarter as a whole, it appears that real consumption expanded at the fastest pace in three years.”
As well, they pointed out the fact that core sales (excluding autos, gasoline and building materials) rose by a decent 0.7% month-on-month, although that positive surprise was largely compensated for by a downwards revision to the previous month’s numbers.
In a similar vein, Barclays Research wrote to clients telling them that:"This rounds out a strong fourth quarter for core retail sales, up an annualized 6.6% quarter-on-quarter, the strongest since the second quarter of 2011. This should translate into robust growth in real consumption as well, our tracking estimate for that remains at 3.8%." | | |
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