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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: Flat finish as unemployment rises - UK unemployment rises to 7.2 per cent
- BoE MPC vote to maintain interest rates
- US housing starts fall 16 per cent
techMARK 2,875.58 -0.22%
FTSE 100 6,796.71 0.00%
FTSE 250 16,347.33 +0.03%
The FTSE closed flat as traders digested UK unemployment data, minutes from the Bank of England's most recent meeting, alongside data out from the US.
The index recovered from an intra-day low of around 6,760p to settle just 0.28 points above its opening price of 6,796.71.
The UK unemployment rate rose to 7.2% in the three months ended in December, from 7.1% in the three months ended November, according to the Office for National Statistics. Analysts were expecting it to remain unchanged.
Some 193,000 jobs were added in the period, well below the reading of 280,000 seen in the previous month and the forecast for 250,000.
Barclays Research commented that, "although the pace of increase in employment and fall in unemployment slowed towards the end of 2013, they remain consistent with a steadily improving labour market".
"In addition, they suggest that the fall in the labour market from here onwards is likely to be more gradual than it has been since last summer."
Meanwhile, minutes from the February 5-6th Bank of England meeting showed that the Monetary Policy Committee (MPC) voted unanimously to leave interest rates at their current record-low level for the 59th month in a row.
The MPC said that while data over the next few months is likely to show that unemployment will reach its 7% threshold, “the committee judged that a degree of spare capacity remained, concentrated in the labour market”.
Capital Economics commented that, "although there was not a formal vote on the new communications, the minutes were notable for the absence of any major disagreements amongst the members".
It added: "So with considerable slack still left in the labour market and all Committee members seemingly committed to the new form of guidance, we continue to think that interest rates are likely to remain on hold until late next year."
US housing starts register a sharp drop in January
US housing starts fell 16% to an annualised rate of 880,000 in January, from the previous month’s reading of 1.048m, according to the Commerce Department. The consensus estimate had been for a print of 950,000.
Also in the States, final demand producer prices rose by 0.2% month-on-month in January, and 1.2% over the year, according to the latest data from the Bureau of Labor Statistics. The consensus estimate was for an increase of 0.1%.
Sports Direct jumps on quarterly sales rise
Sports Direct International shot to the top of the risers after group sales in the quarter to January 26th rose 11.2% from the previous year to £655.4m. Gross profit gained 14.6% to £280.7m during the period with growth across all its divisions including Sports Retail, Brands and Premium Lifestyle.
UK grocer WM Morrison moved higher late in the session on the back of renewed buyout speculation. According to Reuters, bankers are working on debt financing packages of around £5bn to back a potential sale.
Aerospace engineer Rolls-Royce was a high riser as it continues to recover from heavy falls last Thursday after shocking the market with its first profit warning in a decade.
Ex-dividend stock were leading the downside, with the biggest losses seen with AstraZeneca and Carnival. |
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| | FTSE 100 - Risers
Sports Direct International (SPD) 767.00p +7.12%
Morrison (Wm) Supermarkets (MRW) 244.00p +4.90%
Fresnillo (FRES) 992.00p +2.48%
Rolls-Royce Holdings (RR.) 1,000.00p +2.41%
Tesco (TSCO) 335.75p +1.83%
RSA Insurance Group (RSA) 100.60p +1.77%
Shire Plc (SHP) 3,344.00p +1.70%
Diageo (DGE) 1,902.50p +1.68%
Mondi (MNDI) 1,052.00p +1.64%
Rio Tinto (RIO) 3,627.50p +1.60%
FTSE 100 - Fallers
AstraZeneca (AZN) 3,987.00p -2.58%
Carnival (CCL) 2,468.00p -2.14%
Barclays (BARC) 255.80p -2.10%
Persimmon (PSN) 1,417.00p -1.87%
Lloyds Banking Group (LLOY) 81.21p -1.56%
TUI Travel (TT.) 441.60p -1.56%
ITV (ITV) 207.70p -1.38%
Imperial Tobacco Group (IMT) 2,372.00p -1.33%
Petrofac Ltd. (PFC) 1,330.00p -1.26%
BT Group (BT.A) 413.00p -1.22%
FTSE 250 - Risers
JD Sports Fashion (JD.) 1,450.00p +5.84%
Galliford Try (GFRD) 1,215.00p +4.11%
Bwin.party Digital Entertainment (BPTY) 123.20p +3.53%
IP Group (IPO) 208.90p +3.36%
Regus (RGU) 227.50p +2.94%
National Express Group (NEX) 301.00p +2.91%
African Barrick Gold (ABG) 275.40p +2.53%
Petra Diamonds Ltd.(DI) (PDL) 156.60p +2.49%
AL Noor Hospitals Group (ANH) 895.00p +2.46%
BH Global Ltd. USD Shares (BHGU) 11.53 +2.31%
FTSE 250 - Fallers
Essar Energy (ESSR) 62.10p -7.31%
Catlin Group Ltd. (CGL) 526.50p -5.22%
Ferrexpo (FXPO) 164.00p -4.04%
Evraz (EVR) 82.40p -3.91%
Jardine Lloyd Thompson Group (JLT) 1,030.00p -2.83%
Rank Group (RNK) 146.10p -2.60%
3i Group (III) 408.30p -2.44%
Mitchells & Butlers (MAB) 471.10p -2.42%
Spirent Communications (SPT) 102.00p -2.39%
Diploma (DPLM) 742.00p -2.11% |
| | The Fundamentals of Stock Market Highs | | How to Know when the Bull Market Ends - Given that the stock market rally has now lasted nearly five years and in view of new all-time highs, many market participants are faced with the question when will there be a top at the major share indexes. After all, everybody wants to exit the market near a high and lock in their profits before the market turns downwards again. Read more. |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed after UK jobs data - BoE releases meeting minutes
- UK unemployment rises to 7.2 per cent
- Fed to unveil meeting minutes
FTSE 100: 0.00%
DAX: 0.00%
CAC 40: 0.24%
FTSE MIB: -0.20%
IBEX 35: 0.11%
Stoxx 600: 0.10%
European stocks were little changed after the Bank of England released its policy meeting minutes and the UK unemployment rate unexpectedly rose.
Minutes from the BoE’s meeting earlier this month revealed policymakers showed no disagreement about major changes to the central bank’s forward guidance policy.
The Bank had vowed to keep interest rates at a record low of 0.5% at least until the jobless rate fell to 7%.
However, a faster-than-expected drop in unemployment prompted BoE Governor Mark Carney to issue a new guidance that incorporated several other factors including spare capacity in the economy.
The Office for National Statistics today said unemployment rose to 7.2% in the three months to December from 7.1% the previous quarter. Economists had predicted the rate would remain unchanged.
“As the unemployment rate moved away from the Bank of England’s target, interest rates will remain rock bottom for the foreseeable future,” said IG Market Analyst Alastair McCaig.
“Mark Carney can’t win them all; yesterday the inflation rate dipped below the BoE’s target so it is hardly a shock that unemployment has edged higher. Overall the governor must happy with himself.”
The ONS report also showed employers added 193,000 workers in the quarter to December, below the estimates of 250,000 and the prior quarter’s 280,000.
Jobless claims in January dropped 27,600, compared to 27,700 a month earlier, surprising analysts who had expected it to fall by 20,000.
EU leaders call for sanctions in Ukraine
European leaders have called on the Ukraine government to put an end to violence in the country after at least 25 people died.
They include French President Francois Holland, German Chancellor Angela Merkel
European Commission President José Manuel Barroso.
President President Viktor Yanukovich today warned opposition leaders backing the protest movement to "immediately disassociate themselves from radical forces which are provoking bloodshed" while accusing European leaders of trying to seize power by force.
Analysts raised concerns that the impact of the unrest could spill over to emerging markets which are currently tackling weak currencies.
Tenaris and Vallourec slide
Industrial firms Tenaris and Vallourec slipped after the US failed to impose anti-dumping penalties on imports of steel tubing from South Korea in a decision late yesterday.
Lafarge and Carlsberg advanced after they both posted fourth-quarter profit that beat analysts’ estimates.
Wolters Kluwer slumped after the information services and publishing company forecast restructuring costs of €25m to €30m in 2014.
Meda AB surged after the maker of Dymista allergy medicine said its margin on earnings before interest, taxes, depreciation and amortisation will probably improve in 2014.
The euro rose 0.01% to $1.3761.
Brent crude futures dropped $0.072 to $110.380 per barrel, according to data from the ICE. |
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| | US Market Report | | US open: Stocks gain despite weak housing data - Housing starts, permits disappoint
- Fed minutes due out later on
- Signet to buy Zale, shares surge
Dow Jones: 0.44%
Nasdaq: -0.16%
S&P 500: 0.18%
Weaker-than-expected data from the US housing market failed to hold back Wall Street stocks on Wednesday, though a poor start on the Nasdaq has put its recent winning streak at risk.
The S&P 500 was trading 0.2% higher in morning trade, registering its fourth day in positive territory; the Dow Jones Industrial Average gained 0.4%; while the Nasdaq fell 0.2% following an eight-day climb.
The Commerce Department revealed that housing starts fell by 16% in January to a seasonally adjusted annual rate of 880,000 units, compared with a revised 1.05m-unit rate in December when they fell 4.8%. This was the worst percentage drop since February 2011 and well below the 4.9% fall expected by analysts.
Separately, building permits fell 5.4% in January to a 937,000-unit pace, down from the revised 991,000 in December when they declined 2.6%. Analysts had predicted a smaller fall to 975,000.
Analyst Michael Gapen from Barclays said that housing activity remains in a recovery phase, albeit at a slower pace due to the recent rise in mortgage rates.
“The weather-related distortions to activity are likely clouding an accurate view of where housing is at this point in the cycle. We expect that some of the softness in private residential construction will be reversed in the coming months, most likely in the second quarter,” he said.
Meanwhile, mortgage applications retreated 4.1% in the week ended February 14th against a 2% slump the previous week.
Investors were also looking ahead to tonight’s release of the latest Federal Reserve meeting minutes, which will shed further light behind the central bank’s decision to scale back monthly asset purchases by a further $10bn to $65bn last month.
The meeting on January 28th to 29th was the last meeting held under former Chairman Ben Bernanke. New Chair Janet Yellen has indicated that the Fed is likely to continue tapering monetary stimulus after each policy meeting before ending it all together later in the year.
Fed officials Dennis Lockhart and James Bullard are also due to speak later today, potentially offering further clues as to Yellen’s next move.
Signet, Zale surge after deal
Signet Jewelers rose strongly after agreeing to buy Zale Corp. for $21 a share, representing a 41% premium over Zale’s previous closing price. The deal would value both companies at around $1.4bn.
Helca Mining advanced after saying its gold and silver reserves surged, mainly due to its acquisition of Aurizon Mines.
Zebra Technologies edged higher after the maker of barcode-label printers reported fourth-quarter revenue that exceeded analysts’ estimates.
Chelsea Therapeutics International was up after winning approval in the US for its drug to prevent sudden drops in blood pressure. |
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| | Brokers Tips | | HSBC, Glencore Xstrata, M&S, Anglo American Deutsche Bank has reiterated its ‘hold’ recommendation for banking giant HSBC ahead of its annual results next Monday, saying that these figures are ‘much more important than usual’. The target for the stock has been reduced slightly from 710p to 700p to reflect recent changes in the dollar-sterling exchange rate.
“We think this release takes on additional importance given the significant leg-down seen in HSBC's price-to-earnings ratio relative to the European bank universe and the substantial and imminent return of cash to Vodafone shareholders following the Verizon deal,” said Deutsche Bank analysts Jason Napier and David Lock.
Investec has raised its recommendation for commodities producer and marketer Glencore Xstrata from ‘sell’ to ‘reduce’ after updating its forecasts and valuation model following the group’s recent 2013 production report.
The target for the stock has been raised from 308p to 328p, mainly due to higher sector multiples after the recent strong performance by many of its peers.
Jefferies has upgraded its rating for High Street department store Marks & Spencer from ‘hold’ to ‘buy’ on the back of the launch of the company’s new website and in-house e-commerce platform.
The broker hiked its target for the shares by a quarter from 480p to 600p, saying that M&S is one of the “cheapest in our sector, yet offers one of the highest total shareholder returns”.
Exane BNP Paribas has lifted its target for Anglo American from 1,600p to 1,650p after a better-than-expected set of annual results from the mining giant on Tuesday.
However, the broker kept a ‘neutral’ rating on the stock, saying that the risk/reward is now “balanced” after its recent strong run. By the close on Tuesday, the shares had risen by over 20% since the start of 2014. | | |
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