| | | | | | | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks finish flat amid rate-hike speculation - FTSE 100 fails to break last year's intraday high
- Rate hike speculation ramps up as UK unemployment falls
- Sage gains after confident outlook
- RBS drops after UBS downgrade to 'sell'
techMARK 2,847.95 +0.05%
FTSE 100 6,826.33 -0.12%
FTSE 250 16,147.17 +0.02%
The FTSE 100 finished more or less flat for a third straight day on Wednesday as a sharp fall in the UK unemployment rate was offset by rising speculation that the Bank of England (BoE) could begin to hike interest rates sooner than expected.
After swinging between gains and losses for most of the session, London's benchmark index closed down 7.93 points at 6,826.33, a fall of just 0.1%.
According to Chief Market Analyst Michael Hewson from CMC Markets, the Footsie "continues to struggle to make any headway beyond the highs that we saw last year at 6,875, with two failed attempts this week already". 6,875 is thought to be the only major resistance level keeping the index from breaking through to its record high of 6,930 reached in December 1999.
Sentiment was also dampened by a poor start on Wall Street as disappointing earnings from heavyweights IBM and AMD weighed on US markets.
US investors were also showing caution ahead of a busy day macro-wise tomorrow with the release of American manufacturing figures, existing-home sales, jobless claims and the leading indicators index. Data is being closely watched amid speculation that the Federal Reserve will continue to scale back its quantitative easing at its policy meeting next week.
UK jobless rate ramps up rate talk
Data revealed this morning that the unemployment rate in Britain eased to 7.1% in the three months up to November, down from 7.4% in the previous month and below the forecast of 7.3% by economists.
While the BoE has always assured that 7% unemployment - a level at which it would re-assess its policy stance - was only a threshold and not a 'trigger' for a rate rise, markets are now worried that the central bank could begin to tighten policy sooner rather than later.
Nevertheless, minutes from January's Monetary Policy Committee (MPC) meeting this morning showed that policymakers see no "immediate need" to lift rates even if the 7% threshold is hit in the future.
However, Economist Daniel Vernazza from UniCredit Research said: "As a result of today's news, we expect the unemployment rate to fall to 7% in the next quarter and that the BoE will raise Bank Rate at the start of 2015."
In other economic news, UK public-sector net borrowing excluding financial interventions fell to £12.1bn in December, down from £16.8bn the month before and under the £14bn forecast.
Sage jumps, RBS sinks
Accountancy software group Sage surged after saying that it is on track to hit its medium-term revenue targets after an in-line first quarter. The company said that "good growth" was maintained across all of its regions during the period.
RBS was lower after UBS downgraded the stock from 'neutral' to 'sell', saying that the current share price already discounts much of the progress expected to be made from restructuring over the next 18 months. As such, there is a "risk of underperformance even if management outperforms business targets", UBS said.
Mining stocks were mixed today, though BHP Billiton swung into the red after an underwhelming quarterly production report. BHP was also under pressure after a downgrade by HSBC to 'neutral'.
In contrast, Numis Securities gave Admiral a lift after upgrading the stock to 'buy', saying that it sees further upside for car insurance stocks as confidence in earnings, dividends and growth improves.
Meanwhile, Petra Diamonds was extending gains after saying yesterday that it has received a 29.6-carat blue diamond at the Cullinan mine in South Africa. The miner said the stone is an "outstanding vivid blue with extraordinary saturation, tone and clarity, and has the potential to yield a polished stone of great value and importance". |
| | iPad mini worth £269 for new trading accounts! | | A minimum volume is required. Terms and conditions apply. Find out more, click here. |
|
FTSE 100 - Risers
Sage Group (SGE) 426.90p +3.34%
Admiral Group (ADM) 1,460.00p +3.18%
Johnson Matthey (JMAT) 3,440.00p +2.53%
easyJet (EZJ) 1,743.00p +1.93%
Stock Exchange Group (LSE) 1,854.00p +1.87%
Standard Life (SL.) 390.10p +1.61%
Reckitt Benckiser Group (RB.) 4,825.00p +1.49%
ARM Holdings (ARM) 1,004.00p +1.31%
International Consolidated Airlines Group SA (CDI) (IAG) 437.00p +1.30%
Hammerson (HMSO) 531.50p +1.24%
FTSE 100 - Fallers
William Hill (WMH) 341.60p -3.88%
Royal Bank of Scotland Group (RBS) 348.00p -3.06%
Mondi (MNDI) 969.00p -2.42%
Fresnillo (FRES) 754.50p -2.33%
BG Group (BG.) 1,312.50p -2.20%
Travis Perkins (TPK) 1,820.00p -2.05%
RSA Insurance Group (RSA) 100.20p -1.96%
SSE (SSE) 1,317.00p -1.72%
SABMiller (SAB) 3,039.00p -1.52%
Amec (AMEC) 1,038.00p -1.52%
FTSE 250 - Risers
Petra Diamonds Ltd.(DI) (PDL) 134.90p +7.92%
Keller Group (KLR) 1,230.00p +5.40%
Greencore Group (GNC) 253.00p +4.24%
Daejan Holdings (DJAN) 4,998.00p +3.16%
F&C Asset Management (FCAM) 93.20p +3.15%
Kentz Corporation Ltd. (KENZ) 677.00p +2.81%
IP Group (IPO) 179.90p +2.80%
WH Smith (SMWH) 1,043.00p +2.66%
TalkTalk Telecom Group (TALK) 325.80p +2.65%
Wetherspoon (J.D.) (JDW) 809.00p +2.53%
FTSE 250 - Fallers
Essar (ESSR) 64.25p -4.18%
Tullett Prebon (TLPR) 368.00p -3.92%
African Barrick Gold (ABG) 199.50p -3.39%
Kazakhmys (KAZ) 179.80p -3.07%
Home Retail Group (HOME) 195.60p -3.07%
Millennium & Copthorne Hotels (MLC) 570.00p -2.90%
COLT Group SA (COLT) 122.50p -2.85%
Ladbrokes (LAD) 154.60p -2.52%
Bellway (BWY) 1,595.00p -2.39%
ICAP (IAP) 424.40p -2.35% |
| | The Share Centre: | | Cheaper fund investing has arrived at The Share Centre.
We don't believe it's fair to charge you extra just for holding funds.
So we don't. Find out more.
Capital at risk. Click Here |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed after BoE minutes, jobs data - BoE releases meeting minutes
- UK jobless rates falls
- Eurozone debt declines
- Syrian peace talks begin
FTSE 100: -0.12%
DAX: -0.10%
CAC 40: 0.03%
FTSE MIB: -0.19%
IBEX 35: -0.75%
Stoxx 600: 0.09%
European stocks were little changed as investors weighed the release of the Bank of England's (BoE) meeting minutes and UK employment data.
Minutes from the central bank's January 8-9th meeting showed policymakers saw no need to raise interest rates if the jobless rate reaches its 7% threshold.
The BoE's Monetary Policy Committee (MPC) has vowed to keep its benchmark rate at the record low of 0.5% at least until unemployment drops to 7% under its forward guidance.
However, the Bank is likely to feel pressure to change its guidance after data today showed unemployment fell to 7.1% in the three months to November from 7.4% the previous quarter, well under the consensus forecast of 7.3%.
"Such a dramatic drop in unemployment leaves the BoE in a pickle – unemployment is now just 0.1pp above its 7% threshold," according to UniCredit.
"The MPC would not have known today's labour market report at the time of its 8-9th January meeting, but it was already playing catch-up with the previous fall in the unemployment rate. As such we expected the minutes to be 'dovish' in an attempt to talk rates down – but surprising the MPC chose not to do this."
Eurozone debt, Syria talks
The Eurozone's debt in relation to gross domestic product (GDP) at the end of the third quarter stood lower than in the previous quarter, according to Eurostat data published on Wednesday.
The Eurozone's government debt to GDP ratio dropped to 92.7%, compared to the 93.4% registered in the prior quarter. Eurostat said it was the "first decrease in absolute terms for the euro area since the fourth quarter of 2007".
Meanwhile, the United Nations (UN) kicked off Syria peace talks with heated debates today in Geneva.
Syrian Foreign Minister Walid Muallem insisted President Bashar al-Assad would not kneel to outside pressure after Opposition leader Ahmed accused the ruling government of Nazi-style war crimes.
UN Security-General Ban Ki-moon opened the proceedings by urging immediate access to humanitarian aid for areas under siege.
The talks come amid violence in Syria and claims that the country's military killed civilians using chemical weapons near Damascus in August last year.
Peugeot Citroen, Sage
PSA Peugeot Citroen was up after a union leader said the carmaker may cut a further 1,500 jobs in France as part of a restructuring plan.
Sage Group advanced after the software-publishing company said it expects to meet its target of 6% revenue growth in 2015.
Rautaruukki Oyj surged after SSAB AB announced plans to buy the Finnish steelmaker.
Allianz edged lower after Mohamed El-Erian resigned as Chief Executive and Chief Investment Officer of the German insurer's Pacific Investment Management Co. unit.
Lanxess declined as JPMorgan cut its 12-month price estimate on the maker of speciality chemicals to €28 from €37 and reiterated an 'underweight' rating.
ABB Ltd. slumped after the power and automation technology company said charges from project delays and operational issues will hurt profit.
The euro fell 0.04% to $1.3556.
Brent crude futures rose $1.038 to $107.850 per barrel, according to the ICE. |
| | NEW Trading Strategy - Currently running at 70% success rate | | Earn a tax free income trading, from just 20 minutes a day – no experience needed. Our powerful trading software will help you decide when to enter trades and how to maximise profits.
Register for a FREE brochure and trading guide, Click Here. |
| | US Market Report | | US open: Markets open flat amid earnings, IBM and AMD drop - IBM, AMD provide a drag as outlooks disappoint
- Markets awaiting data due Thursday
- Treasury yields rise from six-week low
Dow Jones: -0.30%
Nasdaq: 0.06%
S&P 500: -0.07%
US indices opened broadly flat on a quiet day for macro news, as markets focused on an influx of corporate earnings including disappointing figures from tech heavyweights International Business Machines (IBM) and Advanced Micro Devices (AMD).
According to Market Analyst Craig Erlam from Alpari UK, earnings will be the key driver of sentiment today "as investors continue to look for evidence that the economic recovery will continue this year".
"The period of ultra-low interest rates appears to be coming to an end as the Federal Reserve winds down its quantitative easing (QE) programme and passes the baton to US companies to carry on the recovery," he said.
US Treasury yields bounced off a six-week low amid speculation that the Fed will continue to scale back QE at its policy meeting next week in the face of an improving economy.
The yield on a benchmark 10-year US bond was up two basis points at 2.85% early on, ahead of data due out on Thursday which is expected to show a pick-up in US manufacturing growth and a rebound in existing-home sales. Jobless claims and the leading indicators index are also due out tomorrow.
IBM, AMD and Coach fall early on
Tech giant IBM slumped after the computer-services provider posted a 5% drop in revenue in the fourth quarter to $27.7bn, missing the $28.25bn expected by the market. While earnings per share beat expectations by rising 14% to $6.13, the firm gave a cautious outlook for current-quarter profits.
IBM's senior executives including Chief Executive Ginni Rometty chose to give up their bonuses.
AMD saw its share price sink by over a tenth despite beating fourth-quarter profit estimates after it predicted that revenues in the first quarter of 2014 would fall by around 16%.
Luxury fashion group Coach Inc. sank sharply after reporting fiscal second-quarter earnings and revenues declined, missing analysts' forecasts, as weakness in US women's bag and accessories sales offset growth elsewhere.
Nuance Communications edged higher after the provider of voice applications to corporate customers forecast first-quarter earnings that exceeded market expectations.
Motorola Solutions gained after the maker of walkie-talkies and rugged mobile computers reported a slight rise in quarterly profit, driven by higher government sales.
BlackBerry rallied as the struggling smartphone maker said it plans to sell most of its Canadian real estate to raise cash for its turnaround plan. |
| | 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 |
| | Broker Tips | | Broker tips: RBS, Admiral, BHP Billiton Royal Bank of Scotland (RBS) was a heavy faller on the FTSE 100 on Wednesday morning after UBS lowered its recommendation for this stock from 'neutral' to 'sell' and cut its target from 350p to 300p.
The Swiss bank said that RBS's new strategy - with management now focused on business restructuring instead of balance-sheet restructuring - should help to underpin operating improvements and business efficiency. "However, we think the share price already discounts much of the progress we expect the group to make over the next 18 months or so, leaving risk of underperformance even if management outperforms business targets," said UBS Analyst John-Paul Crutchley.
Numis Securities has upgraded its rating for Admiral, saying that it sees further upside for car insurance stocks as confidence in earnings, dividends and growth improves.
Admiral has been raised from 'add' to 'buy', with its target lifted from 1,425p to 1,710p. Johnson said that the current valuation "materially under-values the company's quality and medium-term prospects".
Canaccord Genuity has kept a 'hold' rating and 2,040p target for BHP Billiton despite its positive view on the mining group's second-quarter production report on Wednesday.
"We retain our view that the investment programme will lead to lower returns than the group averaged over the last decade or so, limiting the appeal of the shares to investors." | | |
New ADVFN Service - FREE Reports Get your free report on Isa's, Investment Trusts, Funds,
Sipps Travel and Cars - FREE and Easy service CLICK HERE
To advertise in the Euro Markets Bulletin please contact patrick@advfn.co.uk |
| | | | | | | To unsubscribe from this news bulletin or edit your mailing list settings click here. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +44 (0) 207 0700 961. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49 | |
No comments:
Post a Comment