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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 open: Stocks fall after Fed as investors await data-heavy session - FTSE 100 at lowest since December 18th
- Fed continues to taper, cuts bond purchases by 10bn dollars
- Chinese PMI confirms manufacturing contraction
- Barrage of data out elsewhere
techMARK 2,761.89 -0.22%
FTSE 100 6,518.96 -0.39%
FTSE 250 15,677.69 -0.07%
UK equities got off to a poor start on Thursday morning in the aftermath of the Federal Reserve's decision to scale back its stimulus programme further and some disappointing economic figures from China.
Ongoing concerns over developing nations were continuing to weigh on sentiment today as investors scaled back risk appetite ahead of what is set to be a data-heavy session for global financial markets.
The FTSE 100 was trading down 0.4% at 6,519 in early trading; it has not closed below this level since December 18th 2013.
The US central bank last night tapered quantitative easing (QE) for the second month in a row despite some suggestions that the recent volatility in emerging markets could prompt it to hold off.
This comes after policymakers in Turkey, India and South Africa all moved to tighten policy in recent days, though this has failed to stop the downwards pressure on their respective currencies.
After a two-day meeting, the Federal Open Market Committee (FOMC) unanimously voted to cut monthly asset purchases by a further $10bn to $65bn after finding that economic growth had "picked up in recent quarters".
In other news, the final reading of the Chinese manufacturing purchasing managers' index confirmed that the sector contracted in January, with the index actually being revised slightly lower to 49.5, from a preliminary reading of 49.6 and below the 50.5 recorded in December.
The economic data schedule elsewhere looks pretty busy this morning with a barrage of indicators due out from across Europe, including: Spanish growth estimates; German unemployment and inflation; UK mortgage approvals; and Eurozone consumer confidence.
In the States, meanwhile, investors will be waiting for personal consumption and spending figures, as well as growth forecasts for the fourth quarter, jobless claims and pending home sales.
BSkyB, Shell and Johnson Matthey rise
Satellite broadcaster BSkyB gained after an 8% rise in revenue to £3.75bn in the first half, helped by strong growth in paid-for subscription products.
Investors at oil major Royal Dutch Shell welcomed the company's announcement that it will undergo a major restructuring to boost capital and cut costs after it reported a sharp fall in fourth-quarter earnings.
Johnson Matthey was also higher despite the news that its long-running boss Neil Carson would be stepping down this summer. The group gave an upbeat outlook for the second half of its financial year, saying that its performance will be ahead of previous expectations.
Heading the other way was spirits manufacturer Diageo, which took a hit from weakness in emerging markets as it revealed that global sales growth was limited to just 1.8% in the first half.
Lager giant SABMiller was also lower this morning, along with bottling firm Coca-Cola HBC.
A number of banks were trading in the red this morning including Standard Chartered and RBS. Lloyds, meanwhile, was lower after analysts at HSBC reportedly cut their rating on the stock from 'overweight' to 'neutral'. |
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| FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 413.50p +2.55%
Royal Dutch Shell 'A' (RDSA) 2,169.00p +2.05%
British Sky Broadcasting Group (BSY) 860.50p +1.89%
Royal Dutch Shell 'B' (RDSB) 2,280.50p +1.69%
Sage Group (SGE) 420.60p +0.62%
Aviva (AV.) 453.70p +0.62%
William Hill (WMH) 332.50p +0.61%
easyJet (EZJ) 1,610.00p +0.44%
Pearson (PSON) 1,108.00p +0.36%
Petrofac Ltd. (PFC) 1,161.00p +0.35%
FTSE 100 - Fallers
Diageo (DGE) 1,817.00p -4.87%
Standard Chartered (STAN) 1,253.50p -2.64%
Prudential (PRU) 1,218.00p -2.09%
SABMiller (SAB) 2,749.00p -1.87%
Unilever (ULVR) 2,354.00p -1.55%
Coca-Cola HBC AG (CDI) (CCH) 1,627.00p -1.51%
Carnival (CCL) 2,488.00p -1.39%
Old Mutual (OML) 173.70p -1.36%
Standard Life (SL.) 367.00p -1.32%
Severn Trent (SVT) 1,733.00p -1.31%
FTSE 250 - Risers
Kazakhmys (KAZ) 187.10p +4.53%
Renishaw (RSW) 1,880.00p +4.50%
Homeserve (HSV) 322.60p +3.66%
Workspace Group (WKP) 556.00p +2.21%
888 Holdings (888) 143.00p +2.14%
AL Noor Hospitals Group (ANH) 835.00p +1.95%
Essar Energy (ESSR) 60.50p +1.77%
KCOM Group (KCOM) 99.70p +1.58%
RPC Group (RPC) 586.00p +1.56%
Mitchells & Butlers (MAB) 445.30p +1.55%
FTSE 250 - Fallers
Investec (INVP) 368.70p -4.58%
Bank of Georgia Holdings (BGEO) 2,123.00p -2.48%
Perform Group (PER) 238.90p -2.37%
Lonmin (LMI) 320.70p -2.34%
COLT Group SA (COLT) 124.20p -2.28%
Premier Oil (PMO) 272.80p -1.69%
Inchcape (INCH) 587.50p -1.67%
Barr (A.G.) (BAG) 613.00p -1.45%
Home Retail Group (HOME) 179.50p -1.27% |
| | UK Event Calendar | | Thursday January 30
INTERIMS
Angle, British Sky Broadcasting Group, CPL Resources, Diageo, Hillshire Brands Company (The), Renishaw, Johnson Matthey
INTERIM DIVIDEND PAYMENT DATE
Dairy Crest Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (GER) (07:00)
Bloomberg Consumer Confidence (US) (14:45)
Business Climate Indicator (EU) (10:00)
Continuing Claims (US) (13:30)
Economic Sentiment Indicator (EU) (10:00)
GDP (Advance) (US) (13:30)
Initial Jobless Claims (US) (13:30)
Pending Home Sales (US) (15:00)
Unemployment Rate (GER) (08:55)
Interest Rate Announcement (NZ)
Unemployment Rate (JP)
Consumer Price Index (JP)
Q2
Hillshire Brands Company (The)
Q3
Gail (India) Ltd GDR (Reg S)
Q4
Royal Dutch Shell 'A', Royal Dutch Shell 'B'
FINALS
Kcell Joint Stock Co GDR (Reg S), Royal Dutch Shell 'A', Royal Dutch Shell 'B', Safestore Holdings, Mitchells & Butlers
IMSS
3i Group, 888 Holdings, Euromoney Institutional Investor, Great Portland Estates, ITE Group, United Utilities Group, Brewin Dolphin, Fuller, Smith&Turner, Highland Gold (production report), Kazhakmys (production report), Playtech, National Grid
EGMS
Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)
AGMS
Euromoney Institutional Investor, Intandem Films, ITE Group, JPMorgan Indian Investment Trust, Lonmin, Mitchells & Butlers, Redefine International, Schroder Asia Pacific Fund, SWP Group, Ultrasis
UK ECONOMIC ANNOUNCEMENTS
Consumer Credit (09:30)
M4 Money Supply (09:30)
M4 Sterling Lending (09:30)
Mortgage Approvals (09:30)
FINAL DIVIDEND PAYMENT DATE
Standard Life European Private Equity Trust, WH Smith
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks fall on Fed tapering, Chinese manufacturing - Fed announces second round of tapering
- Chinese manufacturing contracts
- Eurozone consumer confidence out
- German inflation released
FTSE 100: -0.22%
DAX: -0.12%
CAC 40: -0.25%
FTSE MIB: 0.04%
IBEX 35: -0.50%
Stoxx 600: -0.35%
European stocks were mostly lower after the Federal Reserve announced a second round of stimulus tapering and a report showed a drop in Chinese manufacturing.
The US central bank decided to trim monthly bond purchases by $10bn from $65bn after a two-day meeting which wrapped up yesterday. The Fed said "growth in economic activity picked up" since it last met in December.
The bank also kept its overnight interest rate unchanged at 0%, saying it will remain near zero "well past the time" that unemployment falls below 6.5%.
It was the last meeting under Chairman Ben Bernanke who will pass the baton to Janet Yellen.
"Despite the declines in US markets overnight, the move by the Fed is welcome in a broader context; the central bank has now set a precedent of how much it will cut by, offering the market a level of clarity and shows commitment that even in the face of some mixed data in January (softer conditions in labour market) the Fed has made its mind up and there's no U-turning now," according to Ishaq Siddiqi, Market Strategist at ETX Capital.
Also moving markets was a report from HSBC Holdings Plc and Markit Economics which revealed Chinese manufacturing contracted in January. The purchasing managers' index (PMI) fell to 49.5 this month from 50.5 in December, below the 49.6 consensus forecast and under the 50 level that signals expansion.
The data comes amid concerns over a slowdown in the world's second largest economy. JPMorgan said China poses the greatest risk to emerging markets where currencies have slid, forcing central banks to tighten policies. Central banks in India, Turkey and South Africa raised interest rates this week to address the risk of sharp falls in currencies.
Moving to today's agenda is the release of Eurozone consumer confidence figures, German inflation, US gross domestic product (GDP) and US initial jobless claims.
Roche, Diageo
Roche Holding slumped after the world's biggest maker of cancer drugs after reporting full-year profits that missed analysts' estimates.
Diageo edged lower after the distiller posted an increase in first half profit that fell short of forecasts.
Givaudan SA gained after the maker of flavours and fragrances unveiled full-year net income that surpassed market expectations.
Ericsson was up after the maker of wireless networks reported fourth-quarter net income of 6.41bn kronor following a loss a year earlier.
Banco Santander fell after the Spanish lender said fourth-quarter earnings came in lower than analysts had predicted.
The euro dipped 0.31% to $1.3621.
Brent crude futures rose $0.009 to $107.860 per barrel, ICE data revealed. |
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| | US Market Report | | US close: S&P 500 at two-month low as Fed continues to taper - Fed cuts asset purchases by a further 10bn dollars
- Renewed turmoil in emerging markets
- Boeing, Yahoo sink after results, Dow Chemical jumps
Dow Jones: -1.19%
Nasdaq: -1.15%
S&P 500: -1.02%
The three main US indices fell by over one per cent each on Wednesday with the S&P 500 falling to its lowest level in over two months after the Federal Reserve continued with its plan to reduce stimulus.
The S&P 500 benchmark finished 1.02% lower at 1,774.20, its worst closing level since November 11th.
As was widely expected, US policymakers tapered quantitative easing (QE) for the second month in a row despite some suggestions that the recent volatility in emerging markets could prompt the central bank to hold off.
The Federal Open Market Committee (FOMC) decided to cut its monthly asset purchases by a further $10bn to $65bn after finding that economic growth had "picked up in recent quarters".
"We expect the committee to continue reducing the pace of asset purchases by $10bn at each upcoming FOMC meeting through September, and then take a final $15bn reduction in October to conclude QE3," said Analyst Michael Gapen from Barclays.
Renewed turmoil in emerging markets also ensured that US markets got off to a poor start early on as policy tightening in Turkey, India and South Africa failed to stop the downwards pressure on their respective countries.
The currency weakness following an increase in interest rates "opens up a new, and potentially more worrying, phase of the recent turmoil in EM financial markets in which beleaguered policymakers find themselves unable to defend their currencies", according to analysts at Capital Economics.
Boeing, Yahoo, Dow Chemical
Aerospace firm Boeing beat forecasts for the fourth quarter with earnings rising 26% to $1.2bn on revenues which were up 7% at $23.8bn, but shares fell sharply after the company's guidance for 2014 disappointed.
Internet giant Yahoo! dropped sharply after the company reported a drop in net sales in the fourth quarter and warned of slowing growth amid competition from Google and Facebook. Other tech stocks such as Apple, Intel and Facebook were also lower this morning.
Dow Chemical surged after beating fourth-quarter earnings forecasts, raising its dividend and increasing its share buyback programme.
Medivation surged up after saying its prostate-cancer drug Xtandi slowed cancer in 59% of patients in a study.
T-Mobile US dropped following reports that Sprint Corp. would face resistance from antitrust officials to a potential acquisition of the company.
S&P 500 - Risers
Seagate Technology Plc (STX) $53.65 +4.13%
Marathon Petroleum Corporation (MPC) $86.52 +4.03%
Dow Chemical Co. (DOW) $44.73 +3.88%
Symantec Corp. (SYMC) $24.15 +3.65%
Valero Energy Corp. (VLO) $51.40 +2.39%
Altera Corp. (ALTR) $32.97 +1.92%
E.I. du Pont de Nemours and Co. (DD) $60.71 +1.91%
Tesoro Corp. (TSO) $51.85 +1.91%
International Paper Co. (IP) $46.91 +1.69%
Ball Corp (BLL) $49.07 +1.66%
S&P 500 - Fallers
Yahoo! Inc. (YHOO) $34.89 -8.71%
McCormick & Co. (MKC) $65.30 -6.21%
Avon Products Inc. (AVP) $14.76 -5.69%
Boeing Co. (BA) $129.78 -5.33%
Sears Holdings Corp. (SHLD) $36.39 -5.26%
Teradata Corp. (TDC) $42.07 -4.17%
Pioneer Natural Resources Co. (PXD) $167.69 -3.90%
Southwest Airlines Co. (LUV) $20.61 -3.28%
Delta Airlines Inc. (DAL) $29.92 -3.17%
Plum Creek Timber Co. (PCL) $43.16 -3.16%
Dow Jones I.A - Risers
E.I. du Pont de Nemours and Co. (DD) $60.71 +1.91%
Microsoft Corp. (MSFT) $36.66 +1.08%
Verizon Communications Inc. (VZ) $47.69 +0.70%
3M Co. (MMM) $130.25 +0.34%
Dow Jones I.A - Fallers
Boeing Co. (BA) $129.78 -5.33%
Coca-Cola Co. (KO) $37.90 -2.50%
Home Depot Inc. (HD) $76.68 -2.37%
Walt Disney Co. (DIS) $71.33 -2.13%
Caterpillar Inc. (CAT) $90.62 -2.00%
Procter & Gamble Co. (PG) $77.64 -1.86%
Visa Inc. (V) $217.12 -1.74%
Goldman Sachs Group Inc. (GS) $163.90 -1.41%
Johnson & Johnson (JNJ) $88.90 -1.33%
Nike Inc. (NKE) $71.77 -1.29%
Nasdaq 100 - Risers
Seagate Technology Plc (STX) $53.65 +4.13%
Symantec Corp. (SYMC) $24.15 +3.65%
Altera Corp. (ALTR) $32.97 +1.92%
Illumina Inc. (ILMN) $146.67 +1.48%
Intuitive Surgical Inc. (ISRG) $415.08 +1.35%
Activision Blizzard Inc. (ATVI) $16.92 +1.35%
Nxp Semiconductors Nv (NXPI) $47.26 +1.22%
Charter Communications Inc. (CHTR) $138.26 +1.18%
Microsoft Corp. (MSFT) $36.66 +1.08%
Regeneron Pharmaceuticals Inc. (REGN) $281.54 +1.03%
Nasdaq 100 - Fallers
Yahoo! Inc. (YHOO) $34.89 -8.71%
Vimpelcom Ltd Ads (VIP) $9.65 -4.83%
Baidu Inc. (BIDU) $158.12 -3.73%
Starbucks Corp. (SBUX) $71.56 -3.15%
Autodesk Inc. (ADSK) $49.65 -3.10%
Facebook Inc. (FB) $53.47 -3.03%
Amazon.Com Inc. (AMZN) $384.20 -2.59%
Liberty Global plc Series A (LBTYA) $80.83 -2.56%
Priceline.Com Inc. (PCLN) $1,133.79 -2.47%
Tractor Supply Company (TSCO) $69.00 -2.38% |
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| | Newspaper Round Up | | Thursday newspaper round-up: BP, RBS, Scotland BP should remain barred from winning any new contracts with the American government because it has not demonstrated that it is a "responsible" contractor following the 2010 Gulf of Mexico oil spill, the US Department of Justice has said. The oil giant is fighting to overturn a decision made by the US Environmental Protection Agency in 2012, which banned all BP subsidiaries from pitching from any new contracts to supply or lease oil to the US government. – Daily Telegraph
Royal Bank of Scotland is preparing to sell its American trading business as it struggles to raise capital after this week's shock profit warning. The bank, 81 per cent-owned by the taxpayer, has been under pressure from the Government to sell RBS Securities, formerly called RBS Greenwich Capital, because it ties up a lot of RBS's capital and has an aggressive investment banking culture. The latest row about RBS bonuses has hardened officials' attitude that the business should be sold because it employs about half of the bank's 11,000 investment bankers, including some of its highest-paid individuals, according to analysts' estimates. – The Times
The Scottish Government last night admitted it would have to "pool" sovereignty with the rest of the UK if it wanted to keep the pound after independence. The admission came after Bank of England Governor Mark Carney warned an independent Scotland would have to surrender key economic levers to join in a currency union. It is understood the UK authorities could retain control over interest rates and exchange rates, and that limits could be applied to taxation and spending. – The Scotsman
The Bank of England has blocked Santander UK's plans to hand its incoming deputy chief executive responsibility for risk management. The British arm of the Spanish lender has been forced to rethink its appointment of Nathan Bostock, currently finance director of Royal Bank of Scotland, to the joint role of deputy chief executive and chief risk officer. Mr Bostock is expected to join Santander later this year, but will only take the deputy chief executive job, while the lender looks for a new head of risk after the Prudential Regulation Authority, the Bank of England-run regulator of Britain's largest lenders, said he could not perform both jobs. - Daily Telegraph
Vince Cable is demanding an urgent meeting with the boss of Lloyds Banking Group after the bailed-out bank made deep cuts to the number of its small business experts. The business secretary wrote to António Horta-Osório on Wednesday night after Lloyds said half the relationship managers handling small business queries that their roles were being made redundant as part of a long-running strategic review. – The Guardian
The Industrial and Commercial Bank of China, the largest bank in the world by assets, is to take the country's first foothold in London's wholesale banking market. The state-backed bank is to buy control of Standard Bank's London commodities and currencies arm in a deal worth as much as $1.275bn (£770m). – Daily Telegraph | | |
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