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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: FTSE 100 drops 1.7 per cent as sell-off continues - BG Group plummets on gloomy guidance
- AT&T rules out Vodafone bid
- RBS reveals more provisions for new claims
- FTSE 100 at lowest since mid-December
techMARK 2,761.91 -1.00%
FTSE 100 6,550.66 -1.70%
FTSE 250 15,528.21 -1.12%
UK markets dropped to their lowest levels in nearly six weeks on Monday as heavy falls from several blue chips and ongoing market volatility prompted investors to shy away from risk.
There were a number of notable movers on the top-tier index today including BG Group, which dropped to an eight-month low after revising its production guidance for this year. Hargreaves Lansdown fell on rising concerns over competition, while Vodafone sank after AT&T ruled out a takeover bid for the company.
Meanwhile, a surprise trading update from RBS late this afternoon caught investors off guard as the bank said that it has put more cash aside to deal with new claims.
The FTSE 100 fell by 1.7%, or 113.08 points, to 6,550.66 by the end of trade; it has not closed below this level since December 18th.
London's benchmark index has now fallen by over 4% during the past three sessions alone as ongoing turmoil in emerging-market currencies, concerns about economic growth in China and nervousness ahead of this week's Federal Reserve policy meeting caused investors to scale back risk appetite significantly.
However, while these concerns have added to the downside pressure on stocks, Senior Market Strategist Brenda Kelly from IG said that the "main contributing factor is that equities have risen too much too quickly".
"A correction to the downside was inevitable and is, in many respects, healthy," she said.
BG Group, Hargreaves Lansdown, Vodafone and RBS fall
Oil and gas producer BG Group has warned that production this year will be lower than analysts' estimates due to "short-term issues" in Egypt and the US. The stock was down 14% by the close after Chief Executive Chris Finlayson labelled the group's guidance as "very disappointing".
Hargreaves Lansdown dropped sharply today after Barclays Stockbrokers became the latest platform to undercut the financial services group's fees.
US telecoms giant AT&T has quashed talk about a takeover of Vodafone by ruling out a bid for the British mobile phone company, sending shares in the latter firmly into negative territory.
RBS sank sharply before the close after saying it has decided to provide £2.9bn to cover various claims and conduct-related matters affecting the group.
ARM Holdings was in the red after saying that it has appointed Stuart Chambers as Chairman to replace John Buchanan, who is stepping down due to a medical condition.
Citigroup pressured terrestrial broadcaster ITV lower after cutting its rating from 'neutral' to 'sell', naming it as one of its least preferred stocks in the European media sector.
RSA Insurance Group dropped after The Sunday Times reported it is considering scrapping its final dividend to raise £500 to fill a balance-sheet loss.
On a positive note, shares in F&C Asset Management leapt this afternoon after the group confirmed reports it had received an indicative offer from Canadian bank BMO Financial Group of 120p a share in cash, compared with Friday's closing price of 93.5p.
Defensive stocks, often seen as relatively stable investments in times of market volatility, were benefitting today from a reduction in risk appetite. Utility firms Severn Trent and United Utilities were among the best performers on the back of rumours of a possible private equity bid out of Canada. |
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FTSE 100 - Risers
United Utilities Group (UU.) 713.50p +1.86%
Severn Trent (SVT) 1,700.00p +1.31%
Rolls-Royce Holdings (RR.) 1,184.00p +1.02%
Weir Group (WEIR) 2,107.00p +0.81%
British Sky Broadcasting Group (BSY) 858.00p +0.70%
London Stock Exchange Group (LSE) 1,821.00p +0.55%
BAE Systems (BA.) 432.30p +0.53%
Land Securities Group (LAND) 1,055.00p +0.48%
Shire Plc (SHP) 2,946.00p +0.41%
Morrison (Wm) Supermarkets (MRW) 245.70p +0.24%
FTSE 100 - Fallers
BG Group (BG.) 1,082.00p -13.78%
Hargreaves Lansdown (HL.) 1,429.00p -5.30%
Vodafone Group (VOD) 223.55p -3.87%
Pearson (PSON) 1,126.00p -3.84%
InterContinental Hotels Group (IHG) 1,972.00p -2.67%
Burberry Group (BRBY) 1,439.00p -2.57%
Aviva (AV.) 445.00p -2.54%
Smiths Group (SMIN) 1,433.00p -2.52%
Mondi (MNDI) 913.00p -2.46%
Old Mutual (OML) 179.00p -2.40%
FTSE 250 - Risers
F&C Asset Management (FCAM) 116.40p +24.49%
NMC Health (NMC) 474.00p +3.27%
Homeserve (HSV) 292.20p +2.35%
St. Modwen Properties (SMP) 384.00p +1.91%
Jardine Lloyd Thompson Group (JLT) 1,072.00p +1.52%
Barr (A.G.) (BAG) 614.00p +1.49%
Oxford Instruments (OXIG) 1,692.00p +1.44%
Dignity (DTY) 1,479.00p +1.44%
Elementis (ELM) 254.10p +1.36%
Ashmore Group (ASHM) 330.00p +1.29%
FTSE 250 - Fallers
Essar Energy (ESSR) 57.25p -10.05%
Alent (ALNT) 300.00p -5.87%
Fidelity China Special Situations (FCSS) 98.50p -4.74%
Supergroup (SGP) 1,455.00p -4.59%
Close Brothers Group (CBG) 1,249.00p -4.44%
Ocado Group (OCDO) 481.70p -4.42%
Partnership Assurance Group (PA.) 315.40p -4.28%
Cairn Energy (CNE) 237.10p -4.20%
CSR (CSR) 658.50p -4.15%
African Barrick Gold (ABG) 212.20p -3.94% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Fall in EM currencies drags stocks lower - Emerging market currencies weaken
- US new home sales fall
- German IFO business climate index rises
- Draghi signals move towards QE
FTSE 100: -1.70%
DAX: -0.46%
CAC 40: -0.41%
FTSE MIB: -0.44%
IBEX 35: -0.95%
Stoxx 600: -0.83%
European stocks declined as currencies in emerging markets weakened and the Turkish central bank said it would hold an emergency meeting to address the lira's decline.
A sharp fall in the lira prompted the Turkish central bank to schedule an extraordinary policy meeting for Tuesday to analyse the necessary measures to ensure price stability.
The FTSE Emerging Markets index was down 1.4% in afternoon London trading today.
Global funds pulled $2.4bn from emerging-market equity funds in the week through January 22nd, according to Citigroup.
It comes as some analysts fear another round of monetary stimulus tapering by the US Federal Reserve could hamper the global economic recovery.
The Fed will announce its latest policy on Wednesday after last month deciding to start scaling back monthly asset purchases by $10bn to $75bn. According to consensus forecasts the bank will announce another $10bn cut.
Nonetheless, strategists at UBS were unfazed by the recent spate of volatility, telling clients that the current situation in emerging markets is not a 1990's style balance of payments crisis and that there are no risks of contagion.
Capital Economics added: "Although some currencies have fallen sharply this month, it still does not seem right to talk about a new financial crisis sweeping across all emerging markets (EMs)."
US home sales, German Ifo
US new home sales fell more than expected by 7% to a 414,000 annualised pace in December, after a revised 445,000 rate in November. Economists had pencilled in a small increase to an annualised rate of 455,000.
In Germany, the IFO business sentiment index - which measures firms' sentiment about the current business situation and their expectations for the next six months - rose to 110.6 from 109.5, coming in above the forecast for an increase to 110.0.
Meanwhile, European Central Bank (ECB) President Mario Draghi has signalled a possible move towards monetary stimulus to ward off deflation.
At the World Economic Forum in Davos, Switzerland, Draghi said the ECB would be prepared to buy packages of bank loans to households and companies, in stark contrast to traditional quantitative easing.
Elsewhere in Europe, Eurogroup finance ministers were meeting in Brussels in the afternoon to address the banking union.
Eurogroup Chairman Jeroen Dijsselbloem on Saturday said he hopes this year's asset quality review and stress tests of European banks will reveal some bad news to give the process credibility.
Ziggo, BG Group
Ziggo was lower after Liberty Global agreed to take over the Dutch broadband provider for €4.9bn.
Oil and gas producer BG Group tumbled after saying 2013 earnings would be lower than forecast due to reduced liquefied natural gas shipments from Egypt and US forward-gas prices.
Vodafone declined after AT&T said it doesn't intend to make an offer for the mobile-phone operator.
RSA Insurance Group dropped after The Sunday Times reported it is considering scrapping its final dividend to raise £500m to fill a balance-sheet loss.
Ericsson gained as the network-equipment maker and Samsung Electronics settled their patent dispute and struck a new licensing deal for wireless technology in smartphones, televisions, tablets and Blu-Ray disk players.
Lanxess rallied after the chemical maker announced the appointment of Matthias Zachert as its new Chief Executive Officer.
The euro fell 0.05% to $1.3671.
Brent crude futures fell $0.766 to $107.060 per barrel, according to ICE data. |
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| | US Market Report | | US open: Stocks edge higher after sell-off, but new homes sales drop - New home sales drop seven per cent
- Caterpillar beats forecasts, reports strong guidance
- Markets await Apple results
Dow Jones: 0.34%
Nasdaq: -0.02%
S&P 500: 0.21%
It was a tentative start for US markets on Monday with indices opening flat to slightly higher in the aftermath of last week's sell-off as investors reacted to a drop in new home sales.
New home sales in the States fell at a month-on-month rate of 7% to a seasonally adjusted annual rate of 414,000 in December. Analysts were expecting a fall of just 1.9%.
Nevertheless, strong gains for bellwether Caterpillar were helping the S&P 500 push higher after the opening bell as the benchmark rebounded slightly following its worst weekly performance since June 2012.
Volatility in emerging-market currencies hit global stock markets hard in recent days as investors scaled back risk appetite on concerns of a slowdown in China after some weak data.
Tensions eased somewhat today though after Turkey's central bank said it would hold an emergency monetary policy meeting tomorrow in order to discuss recent developments and take necessary measures to ensure stability.
Meanwhile, there have been some jitters ahead of Federal Reserve's next policy meeting which concludes on Wednesday with the central bank widely expected to continue with its plan to taper its quantitative easing programme.
The Fed, which began scaling back its monthly asset purchases in December from $85bn to $75bn, will make another $10bn cut this month, according to the consensus forecast.
Caterpillar rallies after earnings, guidance
Mining and construction equipment maker Caterpillar after announcing a $10bn share buyback and a stronger-than-expected 44% jump in fourth-quarter profits. The company also forecast earnings and revenue for 2014 ahead of analysts' estimates.
Apple rose early on as investors await its fiscal first-quarter results later today which are expected to show its first profit increase in more than a year on the back of demand for iPads and iPhones.
JP Morgan Chase & Co. gained despite the news that its Chief Executive Jamie Dimon is set to receive a significant increase in his pay.
Royal Caribbean Cruises was making decent gains despite reports that its ship Explorer of the Seas is coming back to New Jersey sooner than planned after more than 600 passengers caught a stomach bug.
Telecoms giant AT&T edged higher ahead of its results tomorrow after releasing a statement quashing speculation that it intends to make a bid for British counterpart Vodafone. |
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| | Broker Tips | | Aberdeen Asset Management: Espirito Santo cuts price target from 573p to 514p and keeps a buy recommendation. Morgan Stanley reduces price target from 492p to 393p and stays with its equal-weight rating.
Amino Technologies: N+1 Singer shifts price target from 89p to 93p and reiterates a hold recommendation.
Ashmore Group: Morgan Stanley reduces price target from 410p to 365p and maintains an equal-weight rating.
Aveva: Panmure Gordon reduces price target from 2286p to 2195p, while staying with its hold recommendation.
Big Yellow Group: Goldman Sachs upgrades to a strong buy with its price target at 5598p.
British Land: Goldman Sachs upgrades to buy with a price target of 763p.
Cairn Energy: Exane cuts price target from 335p to 318p and retains an outperform rating. UBS cuts price target from 270p to 250p and maintains a neutral rating.
Close Brothers Group: JP Morgan increases price target from 1242p to 1357p and reiterates an overweight rating.
Cloudbuy: Westhouse Securities raises price target from 50p to 100p and retains a buy recommendation.
Daily Mail & General Trust: Exane increases price target from 860p to 1150p upgrading from neutral to outperform.
Faroe Petroleum: Panmure Gordon shaves price target from 192p to 186p, while leaving its buy recommendation unchanged.
Hansard Global: Panmure Gordon cuts price target from 162p to 130p, while retaining a buy recommendation.
IG Group: Goldman Sachs lowers price target from 735p to 725p and downgrades from buy to neutral.
Informa: Barclays downgrades to equal-weight with a price target of 580p.
Intu Properties: Goldman Sachs upgrades to neutral with a price target of 323p.
ITV: Citi downgrades to sell with a price target of 191p.
JD Wetherspoon: Morgan Stanley increases price target from 710p to 810p and reiterates an equal-weight rating.
Ladbrokers: Morgan Stanley lowers price target from 165p to 150p and maintains an equal-weight rating.
Land Securities: Goldman Sachs upgrades to buy with a price target of 1158p.
London Stock Exchange: Numis raises price target from 1477p to 1690p and maintains a hold recommendation.
Pearson: Citi takes price target from 1300p to 1350p upgrading to buy. JP Morgan reduces price target from 1490p to 1250p downgrading from overweight to neutral.
Reed Elsevier: Citi ups price target from 950p to 1100p and stays with its buy recommendation.
Rightmove: Citi increases price target from 3000p to 3485p and maintains a buy recommendation.
Royal Mail: Citi initiates with a price target of 531p and a sell recommendation.
Shaftesbury: Goldman Sachs upgrades to neutral with its price target at 655p.
Smith & Nephew: UBS raises price target from 780p to 1000p upgrading from neutral to buy.
Smiths Group: Exane cuts price target from 1525p to 1475p and downgrades to neutral.
UBM: Citi cuts price target from 850p to 820p, while leaving its buy recommendation unchanged.
William Hill: Morgan Stanley cuts price target from 475p to 455p, while its overweight rating is kept. | | |
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