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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: First rise in Bank rate possible before elections - Markets pare early losses
- Weak Chinese data weighs on mining stocks
- FOMC minutes prompt some rate hike fears
- First rise in Bank rate could come before elections
techMARK 2,876.09 +0.02%
FTSE 100 6,812.99 +0.24%
FTSE 250 16,368.83 +0.13%
UK markets managed to recoup early losses following a weaker than expected reading on Chinese manufacturing overnight. Contributing to the selling was the central bank of China's decision to drain £5.89bn of funds from money markets, its second intervention this week.
Despite the above the benchmark seven day repurchase rate slipped by seven basis points to 3.68%.
As well, Kathleen Brooks, Research Director at Forex.com, said the Chinese figures may not be as bad as one might think. She pointed out how of late, on the whole, Chinese data had in fact been surprising to the upside. Thus, Citi's economic surprise index for the country was now in positive territory and at its highest since October, she added.
The FTSE 100 ended the session up by 0.24% at 6,813, paring initial losses which saw it hit an intraday low of 6,732.03 early on.
The HSBC/Markit 'flash' China manufacturing purchasing managers' index (PMI) for February fell further into contraction, slipping to 48.3 from 49.5; analysts had expected no change.
Also pressuring stocks, Wall Street slipped overnight as markets continued to digest the minutes from the latest Federal Reserve policy meeting. At the January 28-29th meeting, the central bank re-affirmed its commitment to continue tapering stimulus in "measured steps" - in what in general terms seemed to be a relatively dovish set of minutes - despite the recent weak readings on the economy.
However, some policymakers even suggested raising interest rates "relatively soon". That, as some traders explained to Sharecast, was "new [information]".
The Eurozone composite PMI also failed to impress, falling to 52.7 from 52.9 in February, surprising analysts who had expected a small increase to 53.1.
Investors were also keeping an eye on the ongoing political instability and protests in Thailand, Venezuela and in particular Ukraine.
Lastly, and back in the UK, the Monetary Policy Committee's David Miles was cited by Sky News as having said that the first increase in the Bank rate could come before the next elections "if average earnings rose more quickly than expected in the coming months".
William Hill, Centrica, Playtech gain
William Hill was higher after both Goldman Sachs and Exane BNP Paribas upgraded their ratings on the stock to 'buy' and 'outperform', respectively.
British Gas owner Centrica gained despite saying market conditions in 2014 are set to remain challenging amid political pressure to lower energy prices.
Military hardware manufacturer BAE Systems slumped after reporting a 3% increase in operating profits to £1.9bn for 2013, but warned that profits next year could fall by up to 10% on the back of pressures on US government spending.
Packaging group Rexam dropped after missing analysts' estimates slightly with its 2013 results. The company underwhelmed after saying it expected to make "further progress" in 2014, but only on a constant currency basis.
FTSE 100 mining peers Fresnillo, Anglo American, Randgold, Glencore Xstrata and Rio Tinto were all trading in the red after the Chinese data. FTSE 250 groups Vedanta, Polymetal and African Barrick Gold also suffered heavy losses.
On a positive note, Petrofac surged after the oilfield services firm won a £1.2bn contract from BP to build a gas processing facility in Oman.
Playtech jumped as it reported a rise in annual earnings as the gaming software development company signed two landmark deals with Ladbrokes to revamp the bookmarker's digital offering until 2017. Canaccord Genuity pointed out the multiples on which the shares are trading (FY14 EV/Ebitda of 11.6x and a PER of 15.6x) but said that it "offers the attractions of technology leadership in a structural growth market, with a substantial net cash position, which we expect to be used to drive value enhancing acquisitions." |
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| | FTSE 100 - Risers
William Hill (WMH) 356.20p +3.01%
Vodafone Group (VOD) 229.60p +2.80%
Petrofac Ltd. (PFC) 1,360.00p +2.26%
Centrica (CNA) 320.60p +2.10%
Associated British Foods (ABF) 2,967.00p +1.78%
Travis Perkins (TPK) 1,966.00p +1.71%
SSE (SSE) 1,420.00p +1.50%
Persimmon (PSN) 1,437.00p +1.41%
Weir Group (WEIR) 2,328.00p +1.35%
Hammerson (HMSO) 576.00p +1.23%
FTSE 100 - Fallers
BAE Systems (BA.) 400.40p -8.33%
Hargreaves Lansdown (HL.) 1,321.00p -2.29%
Aberdeen Asset Management (ADN) 386.00p -2.28%
Anglo American (AAL) 1,554.00p -2.20%
Glencore Xstrata (GLEN) 340.45p -2.13%
Rexam (REX) 515.00p -1.81%
Wolseley (WOS) 3,317.00p -1.57%
Smiths Group (SMIN) 1,390.00p -1.42%
GKN (GKN) 408.30p -1.31%
Randgold Resources Ltd. (RRS) 4,786.00p -1.07%
FTSE 250 - Risers
Playtech (PTEC) 785.00p +5.94%
Petra Diamonds Ltd.(DI) (PDL) 165.10p +5.43%
Home Retail Group (HOME) 191.20p +5.29%
Essar Energy (ESSR) 64.70p +4.19%
Fidessa Group (FDSA) 2,461.00p +2.93%
Wood Group (John) (WG.) 746.50p +2.89%
Hunting (HTG) 820.00p +2.76%
PayPoint (PAY) 1,184.00p +2.51%
IP Group (IPO) 214.10p +2.49%
Dunelm Group (DNLM) 935.00p +2.41%
FTSE 250 - Fallers
Vedanta Resources (VED) 858.00p -5.71%
Essentra (ESNT) 845.00p -5.48%
Hays (HAS) 135.50p -2.94%
Polymetal International (POLY) 641.00p -2.88%
Smith (DS) (SMDS) 340.70p -2.85%
Keller Group (KLR) 1,245.00p -2.81%
Cobham (COB) 287.10p -2.68%
Ferrexpo (FXPO) 160.00p -2.44%
BH Global Ltd. USD Shares (BHGU) 11.26 -2.34%
Centamin (DI) (CEY) 50.45p -2.32%
FTSE TechMARK - Risers
Sarossa Capital (SRC) 1.62p +13.64%
Promethean World (PRW) 37.75p +11.03%
Phoenix IT Group (PNX) 122.00p +3.61%
Ark Therapeutics Group (AKT) 0.47p +2.17%
Anite (AIE) 88.75p +2.01%
Gresham Computing (GHT) 126.00p +1.20%
Wolfson Microelectronics (WLF) 128.75p +1.18%
Optos (OPTS) 204.75p +0.99%
NCC Group (NCC) 209.00p +0.97%
Innovation Group (TIG) 33.75p +0.75%
FTSE TechMARK - Fallers
BATM Advanced Communications Ltd. (BVC) 16.00p -3.03%
Consort Medical (CSRT) 1,054.00p -2.77%
Oxford Biomedica (OXB) 3.17p -2.31%
Kofax Limited (DI) (KFX) 476.75p -1.70%
Dialight (DIA) 765.00p -1.35%
RM (RM.) 147.50p -1.01%
Torotrak (TRK) 21.25p -0.58%
Skyepharma (SKP) 184.00p -0.54%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 183.06 -0.32%
XP Power Ltd. (DI) (XPP) 1,745.00p -0.29% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks finish mixed after slate of economic data - Eurozone PMIs weaker than expected
- Euro-area consumer confidence falls
- US inflation rises in line
FTSE 100: 0.08%
DAX: -0.57%
CAC 40: 0.20%
FTSE MIB: 0.07%
IBEX 35: -0.03%
Stoxx 600: -0.15%
European stocks were mixed as investors weighed a batch of economic data in the Eurozone and the US.
The purchasing managers' index (PMI) for manufacturing in the euro-area slipped to 53 from 54 in January, while the services measure rose to 51.7 from 51.6, Markit Economics said today.
Economists had predicted a reading of 54 for manufacturing and 51.9 for services.
However, it remained above the 50 level that signals expansion.
Another report showed Eurozone consumer confidence fell in February. The sentiment index dropped to -12.7 from -11.7 in January, missing analysts' estimates of -11.
The weaker-than-expected data could pile pressure on the European Central Bank (ECB) to loosen monetary policy.
ECB President Mario Draghi has said he will consider changing its policy at its March meeting following the release of more comprehensive data.
Draghi was paid €378,240 last year, more than twice of much as the $201,700 Federal Reserve Chair Janet Yellen is set to receive, according to the ECB's annual accounts today. Draghi's salary rose by 1.1% from a year earlier.
Meanwhile, the International Monetary Fund warned of financial problems arising in emerging markets. The organisation said economies where inflation is still high, or where policy credibility has come into question, "need to continue tightening monetary policy in the context of strengthened policy frameworks".
In China, manufacturing PMI declined to 48.3 in February, from the prior month's 49.5. Analysts had pencilled in a reading of 49.5.
US inflation
US consumer prices rose by 1.6% year-on-year in January, up from the 1.5% rate a month earlier, as expected. On the month inflation increased 0.1%, matching economists' estimates, easing from 0.2% in December.
Markit's US 'flash' manufacturing purchasing managers' index (PMI) jumped to 56.7 in February, up from a three-month low of 53.7 in January, representing the best growth in activity since May 2010.
Jobless claims decreased by 3,000 to 336,000 in the week ending on February 15th, according to the US Department of Labor, more or less in line with the consensus forecast for 335,000.
The data comes as investors continue to digest last night's minutes from the latest Federal Reserve meeting, at which the central bank re-affirmed its commitment to continue tapering in "measured steps" despite recent disappointing economic reports.
TUI, BAE
TUI edged lower as Monteray Enterprises sold 39.7m shares in the travel company for €521m.
BAE Systems tumbled after warning that profits in 2014 could fall by up to 10% on the back of pressures on US government spending.
Randstad Holding dropped after reporting quarterly results that missed forecasts.
Rexam slid after Jefferies said earnings estimates for the packaging company may need to be cut to reflect currency fluctuations.
Technip advanced as the European oilfield services provider said its operating-profit margin from subsea operations will be at least 12% in 2014 and increase to 15% to 17% next year.
Suez Environnement gained after reporting that net debt declined in 2013.
The euro fell 0.22% to $1.3703.
Brent crude futures dipped $0.336 to $110.100 per barrel, according to data from the ICE. |
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| | US Market Report | | US open: Markets edge lower as Wal-Mart, Facebook fall - Wal-Mart, Facebook drag on markets
- US manufacturing PMI jumps to four-year high
- CPI inflation picks up, other data comes in mixed
Dow Jones: -0.07%
Nasdaq: -0.12%
S&P 500: -0.10%
US stocks opened with small losses on Thursday morning in New York as a surge in domestic manufacturing activity was offset by disappointing results from retail giant Wal-Mart and a fall from Facebook.
Wal-Mart, the world's biggest retailer, was trading lower in early trading after giving weaker-than-expected guidance for the current year; Facebook fell after agreeing to buy social media messaging company WhatsApp for $19bn.
Investors were still digesting last night's minutes from the latest Federal Reserve meeting, at which the central bank re-affirmed its commitment to continue tapering in "measured steps" despite recent weak economic data. Furthermore, some policymakers even suggested raising interest rates "relatively soon".
Manufacturing PMI surges, inflation picks up
Markit's US 'flash' manufacturing purchasing managers' index (PMI) jumped to 56.7 in February, up from a three-month low of 53.7 in January, representing the best growth in activity since May 2010.
Consumer prices rose by 1.6% year-on-year in January, up from the 1.5% rate a month earlier, as expected. On the month inflation increased 0.1%, matching economists' estimates, easing from 0.2% in December.
Jobless claims decreased by 3,000 to 336,000 in the week ending on February 15th, according to the US Department of Labor, more or less in line with the consensus forecast for 335,000.
The Leading Indicators index increased by 0.3% in January, as expected, following a revised 0% reading the month before.
The Philadelphia Fed manufacturing index dropped to -6.3 in February, down from 9.4 before and the 8.0 expected by analysts.
Wal-Mart, Facebook provide a drag
Wal-Mart fell after fourth-quarter earnings per share (EPS) came in at the bottom end of guidance. The company also said that adjusted EPS would come in between $5.10-5.45 in the year ending January 2015, compared with the $5.54 expected by analysts, and that sales would grow at the low-end of the projected 3-5% range.
Facebook declined as investors gave a cool reaction to the $19bn acquisition of WhatsApp, marking the largest single deal in company's 10-year history. How the service will pay for itself is not yet clear. Chief Executive Mark Zuckerberg noted that advertising may not be the best way of monetising mobile messaging but did not offer alternatives.
Electric car maker Tesla Motors was extending gains after impressing the market with earnings yesterday, as it narrowed losses in the fourth quarter on revenues which doubled to $615m. The company also said it expects a 55% increase in production this year. |
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| | Broker Tips | | Broker tips: BAE Systems, RBS, BT Group, Rathbones Brothers Despite a warning from BAE Systems that cuts in US military spending will slash profits by up to 10 per cent, Jefferies has rated the stock a 'buy' with a price target of 350p, stating that the company's woes will be short-term as the firm's US businesses "hit bottom" in 2014.
The stock sank sharply on Thursday after BAE's guidance for this year's results disappointed. "We do, however, have much greater clarity, an encouraging order backlog, a lower pension deficit and end-2013, net debt of £699m versus our forecast of £1.5bn. We believe it all amounts to a creditable, honourable draw," Jefferies told clients.
Investec has downgraded its rating for RBS from 'hold' to 'sell', recommending investors to short the stock ahead of the bank's 2013 results due on February 27th.
"After the last RBS share price correction, we recommended taking profits/closing short positions," said Analyst Ian Gordon, referring to a report he published on January 27th. "However, the shares have once again spiked by 8%, sharply outperforming the FTSE 100 and the rest of the UK banking sector. We detect some misplaced euphoria ahead of results," he said.
BT is set to continue benefiting from several favourable long-term trends but the gap between consensus expectations for operating profits and those of analysts at Credit Suisse, has "closed materially" after the shares' more than 80% rise since November 2012.
The main reason for the above is that the near-term potential for further cost cuts is now more fully reflected in the shares, although the company is believed to be able to continue to cut costs for the next six years no less. Hence the Swiss broker's decision on Thursday to remove the stock from its 'Focus list', albeit while at the same time hiking its price target to 440p from 350p previously.
Numis has rated investment manager Rathbone Brothers a 'hold' as underlying pre-tax profits of £50.5m were exactly in line with the broker's estimate.
"We regard Rathbones as one of the quality names in the wealth management sector and thus we believe it merits a slight premium rating, due to its consistent net inflow record, consistent 30% operating margin and significant bias towards recurring fee income," Numis said. "On 19 times 2014 earnings per share, the rating already fully reflects the quality in our view." | | |
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