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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 rebound after five-day losing streak - Markets finish higher, upside limited after Fed
- UK GDP up 0.7 per cent in Q4
- Fund managers, banks lift markets higher
techMARK 2,781.48 +0.71%
FTSE 100 6,572.33 +0.33%
FTSE 250 15,715.83 +1.21%
UK markets registered small gains on Tuesday as stocks recovered after five straight days of losses which sent the FTSE 100 to its lowest level in nearly six weeks.
The sell-off in emerging-market currencies - which had sparked big falls across global stock markets in recent days – stabilised slightly today after Turkey's central bank said it would hold an emergency monetary policy meeting (its decision is expected for 22:00) to take measures to halt the sharp slide in the lira.
"With so many companies retesting the price-earnings multiples last seen before the markets collapsed, traders can be forgiven for thinking twice about buying the dips," said Alastair McCaig, Market Analyst at IG.
The FTSE 100 finished 21.67 points lower by the close at 6,572.33, rebounding after hitting its worst closing price since December 18th on Monday.
However, gains were only modest as investors continued to show caution ahead of the Federal Open Market Committee meeting which concludes tomorrow. 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.
In economic data today, UK gross domestic product (GDP) rose by 0.7% in the fourth quarter, a slight slowdown from the 0.8% growth registered the preceding three months but in line with expectations.
However, over 2013 as a whole, the economy expanded at a 1.9% rate, compared with just 0.3% growth in 2012. This was the best annual growth in Britain since 2007.
Financials provide a lift
Financial stocks were performing well today as sentiment recovered following an emerging markets-inspired sell-off in recent days. Aberdeen, the fund manager which has bore the brunt of the downside pressure in recent days owing to its exposure to developing nations, was among the best performers this afternoon.
Investors at Lloyds welcomed the bank's announcement that it will cut 1,080 jobs and outsource a further 310 as part of its strategic review.
RBS rebounded after a late statement yesterday which detailed nearly £3bn of provisions for new claims. However, a number of analysts emphasised that the bank had merely brought forward charges that had been expected for 2014. Meanwhile, market speculation today suggested that the bank could speed up the sale of its US banking division.
Fund manager F&C Asset Management, which rocketed yesterday after a £708m offer from a division of Canada's Bank of Montreal, was still making gains after recommending the deal to shareholders.
Water groups Severn Trent and United Utilities continued to rise on takeover speculation after rumours surfaced yesterday about possible private equity bids out of Canada.
Meanwhile, chip designer ARM Holdings saw its share price drop after an IDC report showed that although global smartphone shipments rose 38%, growth was driven by lower-margin cheaper devices.
Mining group Fresnillo fell after gold production came in just shy of its full-year target due to a ban on the use of explosives at one of its mines. Silver production, however, came in ahead of forecasts.
Oil and gas firm BG Group was in the red again after sinking sharply yesterday on disappointing production guidance for 2014 and 2015. Analysts across the board trimmed their targets for the stock today, with JPMorgan notably downgrading the shares to 'neutral'. |
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FTSE 100 - Risers
Severn Trent (SVT) 1,778.00p +4.59%
Hargreaves Lansdown (HL.) 1,485.00p +3.92%
Royal Bank of Scotland Group (RBS) 343.90p +3.52%
Royal Mail (RMG) 578.50p +3.49%
Persimmon (PSN) 1,292.00p +3.36%
United Utilities Group (UU.) 737.00p +3.29%
Lloyds Banking Group (LLOY) 82.85p +3.05%
Aberdeen Asset Management (ADN) 403.20p +3.04%
CRH (CRH) 1,609.00p +3.01%
Shire Plc (SHP) 3,034.00p +2.99%
FTSE 100 - Fallers
Fresnillo (FRES) 751.00p -3.10%
BG Group (BG.) 1,053.50p -2.63%
Tullow Oil (TLW) 829.50p -1.66%
Imperial Tobacco Group (IMT) 2,217.00p -1.55%
ARM Holdings (ARM) 944.50p -1.36%
Tesco (TSCO) 320.25p -1.34%
British American Tobacco (BATS) 2,985.00p -1.31%
Randgold Resources Ltd. (RRS) 4,105.00p -1.25%
G4S (GFS) 247.10p -1.12%
Sports Direct International (SPD) 687.00p -1.08%
FTSE 250 - Risers
F&C Asset Management (FCAM) 123.50p +6.10%
Ocado Group (OCDO) 508.00p +5.46%
Xaar (XAR) 1,079.00p +4.76%
Thomas Cook Group (TCG) 176.80p +4.74%
Laird (LRD) 308.90p +4.18%
Enterprise Inns (ETI) 158.00p +4.15%
Afren (AFR) 150.90p +4.14%
Entertainment One Limited (ETO) 288.50p +4.08%
Betfair Group (BET) 986.50p +3.95%
Foxtons Group (FOXT) 337.20p +3.88%
FTSE 250 - Fallers
Cairn Energy (CNE) 226.40p -4.51%
Bank of Georgia Holdings (BGEO) 2,100.00p -4.28%
De La Rue (DLAR) 788.50p -2.95%
PZ Cussons (PZC) 367.50p -2.21%
Polymetal International (POLY) 590.00p -1.91%
Petra Diamonds Ltd.(DI) (PDL) 131.00p -1.87%
Oxford Instruments (OXIG) 1,664.00p -1.65%
Barr (A.G.) (BAG) 604.50p -1.55%
Genus (GNS) 1,325.00p -1.49%
PayPoint (PAY) 1,080.00p -1.37% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rise as Turkish central bank signals tighter policy - Turkish central back meets
- UK GDP slows
- US consumer confidence rises
- Fed begins two-day policy meeting
FTSE 100: 0.33%
DAX: 0.62%
CAC 40: 0.98%
FTSE MIB: 0.91%
IBEX 35: 1.24%
Stoxx 600: 0.68%
European stocks advanced after Turkey's central bank tackled measures to address the falling lira and rising inflation.
Governor Erdem Casci said he would not hesitate to tighten monetary policy and raise interest rates if needed.
He denied concerns that the bank had avoided interest rate hikes due to pressure from the government after Prime Minister Tayyip Erdogan voiced his opposition against such a move.
Meanwhile, India's central bank unexpectedly raised interest rates in an effort to rein in high inflation. The Reserve Bank of India raised the benchmark repo rate, the amount at which it charges to lend to commercial banks, to 8% from 7.75%.
Some analysts fear the US Federal Reserve's decision last month to begin scaling back its monthly asset purchases by $10bn to $75bn may have hurt growth in developing countries amid a drop in emerging market currencies.
However, Capital Economics said today it doubts these concerns will sway the central bank in its decision on whether to introduce further tapering after its policy meeting tomorrow.
"[…] to the extent that monetary policy can alleviate the turmoil in emerging markets in particular, it is up to the central banks of those countries to respond, not the Fed," the analyst said.
Capital Economics expects the Fed to trim bond purchases by $10bn despite the recent market turbulence fuelling speculation that it will hold back.
UK economy grows in line
UK gross domestic product (GDP) expanded in line with expectations at a quarter-on-quarter rate of 0.7% in the last three months of the year, according to preliminary estimates from the Office for National Statistics (ONS).
It followed an 0.8% rise in the third quarter.
Howard Archer, Chief European+UK Economist at IHS Global Insight, said the modest slowdown reinforced his view that the Bank of England would not be raising rates in the coming year, despite a sharp fall in unemployment.
In the US, the Conference Board's closely-watched gauge of consumer confidence rose to 80.7 in January from a revised 77.5 in December, coming in ahead of the consensus forecast of 78.
Orders for US durable goods unexpectedly dropped by 4.3% in December to reach $229.3bn, according to the latest figures released by the Department of Commerce, mainly as a result of a fall in orders from volatile sectors such as defence and aircraft. While headline orders were 4.9% higher than December 2012, markets had been looking for a 1.8% increase month-on-month.
Miners rally on Nomura upgrade
BHP Billiton and Rio Tinto moved higher after Nomura Holdings Inc. raised its rating on the mining industry to 'neutral' from 'bearish'.
Afren increased as the oil and gas explorer said it expects total sales rose to $1.65bn in 2013 from $1.5bn in 2012, surpassing the consensus forecast of $1.62bn.
Software AG was up after the Germany company predicted that earnings before interest and taxes (EBIT) may increase by as much as 10% in 2014.
Swedbank declined as the Swedish lender said net income fell 15% to 3.61bn kronor due to rising costs, missing analysts' estimates.
Siemens gained after reporting quarterly net profit that beat estimates.
F&C Asset Management jumped after Bank of Montreal bought the owner of the UK's oldest investment fund for £708m.
Imagination Technologies Group, which supplies to Apple, dipped following news Apple sold 3.7m fewer iPhones than analysts had predicted for the three months ended December 28th.
The euro was down 0.10% to $1.3660.
Brent crude futures rose $0.568 to $107.300 per barrel, according to the ICE. |
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| | US Market Report | | US open: Ford, DuPont lead markets higher but Apple drops - Consumer confidence beats expectations in January
- Surprise plunge in durable goods in December
- Ford, DuPont impress; Apple plunges
Dow Jones: 0.60%
Nasdaq: 0.25%
S&P 500: 0.64%
US markets advanced on Tuesday with decent results from Ford and DuPont helping to offset some mixed economic data as stocks rebounded after the recent sell-off.
However, upside on the Nasdaq was limited by a sharp fall from tech giant Apple as the company disappointed with its fiscal first-quarter report.
Nevertheless, US stocks were recovering after a three-day slide caused by volatility in the emerging markets which saw currencies of developing nations plummet. Things stabilised slightly today after Turkey's central bank said it would hold an emergency monetary policy meeting to take measures to halt the sharp slide in the lira.
Investors were also beginning to look ahead to the Federal Open Market Committee meeting which concludes tomorrow. 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.
Economic data comes in mixed
The Conference Board's closely-watched gauge of consumer confidence rose to 80.7 in January from a revised 77.5 in December, coming in ahead of the consensus forecast of 78.
Orders for US durable goods unexpectedly dropped by 4.3% in December to reach $229.3bn, according to the latest figures released by the Department of Commerce, mainly as a result of a fall in orders from volatile sectors such as defence and aircraft. While headline orders were 4.9% higher than December 2012, markets had been looking for a 1.8% increase month-on-month.
The S&P/Case-Shiller Home Price Index was 13.7% higher in November from a year earlier, up slightly from the 13.6% growth in October and more or less in line with forecasts.
Apple plunges, Ford and DuPont rise
Apple fell by over 8% following the opening bell after fewer-than-expected iPhone sales in its fiscal first quarter and disappointing revenue guidance for the current quarter.
51m of the smartphones were sold in the quarter ended December 28th 2013, 7% higher than the previous year but below analysts' forecast of 55m units. The company expects to generate $42-44bn in revenue in its second quarter, far short of the $46.2bn current consensus estimate.
Ford Motor Co rallied after saying it made record pre-tax profits in North America and Asia last year with "one of the company's best years ever". Full-year profits rose 7.6% to $8.6bn in 2013 on revenues that increased 10% to $146.9bn.
Chemicals group DuPont edged higher after beating Street forecasts with fourth-quarter adjusted earnings of 59 cents per share, up from just 20 cents the year before. The company also announced a $5bn share buyback.
Comcast Corp advanced following reports the cable company is close to a deal to buy assets from Charter Communications. |
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| | Broker Tips | | Broker tips: RBS, BG Group, Carnival, Greencore Following the news that RBS has put aside a further three billion pounds to cover new claims, a large number of analysts have maintained their negative views on the stock, recommending investors to sell the shares ahead of the bank's full-year results next month.
Analysts at Citi kept their 'sell' recommendation, saying that "additional one-off charges cannot be ruled out [...] and the risk of further political interference ahead of the May 2015 elections should not be underestimated". Nomura maintained its 'reduce' rating for the shares, saying that RBS remains a "challenging complex restructuring story".
Analysts across the board have slashed their targets for BG Group after the oil and gas producer's cautious production guidance on Monday. Credit Suisse joined other major banks by cutting its target from 1,200p to 1,115p; however, it also raised its rating for the stock from 'underperform' to 'neutral'.
"At this stage, we take a breather and upgrade BG to 'neutral'; we feel there may be some valuation support."
Carnival's share price received a boost on Tuesday from analysts at Numis Securities who raised their recommendation on the cruise operator's stock from 'hold' to 'buy' on the back of positive read-across from sector peer Royal Caribbean.
While Carnival said last month that yields for the full year ending November 2014 would be "slightly" lower than the previous year, Numis believes that guidance may be upgraded when it reports first-quarter numbers in March.
Greencore is a 'buy', according to Jefferies, after the convenience foods firm reported a "strong start to the year" with growth ahead of forecasts.
The stock is trading at 14.5 times full-year earnings, "implying a 22% discount to the European food sector", the broker said as it kept its 275p target. | | |
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