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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: Stocks end week on a high - FTSE closes up 25 points
- Retail sales come in below expectations
- US home sales fall 5.1 per cent in January
techMARK 2,891.86 +0.55%
FTSE 100 6,838.06 +0.37%
FTSE 250 16,460.88 +0.56%
It was a strong finish for the FTSE today, despite retail sales showing a sharp drop for January.
The FTSE 100 closed up 25.07 points, or 37%, marking a gain of 174.44 over the week.
Over in the States this afternoon data revealed that US existing home sales fell 5.1% in January, to 4.62m, a bigger drop than had been predicted by consensus forecasts, at 4.1% to 4.67m.
Barclays said it saw two main factors as contributing to the decline: "First, existing home sales are counted at the close of the sale, meaning they generally lag market conditions by up to 60-90 days [...] In addition, pending home sales fell sharply in December, declining 8.7% on the month, continuing a streak of seven straight monthly declines."
It also said that looking ahead it expects the negative effect of higher mortgage rates "to fade somewhat" given that rates have been "fairly stable since September".
Retail sales come in below expectations
UK retail sales volumes slipped by 1.5% month-on-month in January, according to the Office for National Statistics (ONS), following a “particularly strong” rise of 2.5% in December. The consensus estimate had been for a drop of 1%.
Capital Economics commented that the drop was "unlikely to herald the start of a consumer spending slowdown", and noted that the January’s level of sales was "still 0.2% above the fourth quarter’s average and 4.3% higher than the same month last year".
For its part, Barclays Research said "increasing consumer purchasing power due to lower prices, combined with improvement in confidence and the general outlook of the economy, will likely support retail sales and consumption in the months ahead".
The ONS also announced that public sector net borrowing in Janaury totalled £4.7bn, indicating a surplus.
However, the ONS cautioned that monthly net borrowing is usually volatile in January and February as a result of the timing of income tax receipts. “A more complete picture of income tax will therefore be available in next month’s statistical bulletin,” it said.
BAE tops the leaders after yesterday's share decline
BAE Systems was regaining some of yesterday's heavy losses, rising into the stop spot by this afternoon. The group suffered a sharp decline on Thursday after it warned that profits could fall by up to 10% on the back of pressures on US government spending, and despite reporting a three per cent increase in operating profits to £1.9bn for 2013.
ARM Holdings climbed after Credit Suisse reiterated its 'outperform' rating on the stock.
Shares in housebuilder Persimmon were also higher after JPMorgan increased its target on the stock from 1,250p to 1,550p, and reiterated its "overweight" rating.
IMI shares fell after the stock was downgraded to 'underperform' by BNP Paribas.
InterContinental Hotels Group was trading in the red after Credit Suisse lowered its recommendation from ‘neutral’ to ‘underperform’, pointing out that the shares are trading within just 4% of their all-time high at a price-to-earnings ratio of 23.
On the second tier, intellectual property company IP Group soared after announcing plans to float its portfolio company Xeros on the AIM market.
Vesuvius declined after UBS initiated its coverage of the stock with a target of 440p and a 'sell' recommendation. |
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| | FTSE 100 - Risers
Vodafone Group (VOD) 236.50p +3.01%
BAE Systems (BA.) 411.30p +2.72%
ARM Holdings (ARM) 970.00p +2.43%
Persimmon (PSN) 1,464.00p +1.88%
RSA Insurance Group (RSA) 101.20p +1.61%
G4S (GFS) 236.70p +1.41%
Petrofac Ltd. (PFC) 1,379.00p +1.40%
Wolseley (WOS) 3,360.00p +1.30%
Royal Bank of Scotland Group (RBS) 360.10p +1.24%
Hammerson (HMSO) 583.00p +1.22%
FTSE 100 - Fallers
Coca-Cola HBC AG (CDI) (CCH) 1,550.00p -2.82%
InterContinental Hotels Group (IHG) 1,925.00p -2.53%
IMI (IMI) 1,526.00p -2.49%
ITV (ITV) 204.20p -1.73%
Rolls-Royce Holdings (RR.) 995.00p -1.49%
Royal Mail (RMG) 600.00p -1.48%
Kingfisher (KGF) 392.50p -1.36%
Smiths Group (SMIN) 1,373.00p -1.22%
WPP (WPP) 1,343.00p -1.03%
Prudential (PRU) 1,344.00p -0.81%
FTSE 250 - Risers
Centamin (DI) (CEY) 53.60p +6.24%
Playtech (PTEC) 821.00p +4.59%
IP Group (IPO) 222.00p +3.69%
Essentra (ESNT) 876.00p +3.67%
Moneysupermarket.com Group (MONY) 184.00p +3.66%
Hunting (HTG) 847.50p +3.35%
Hikma Pharmaceuticals (HIK) 1,380.00p +3.22%
Ferrexpo (FXPO) 165.10p +3.19%
Millennium & Copthorne Hotels (MLC) 589.00p +3.06%
Fidessa Group (FDSA) 2,534.00p +2.97%
FTSE 250 - Fallers
Daejan Holdings (DJAN) 5,010.00p -2.24%
Fisher (James) & Sons (FSJ) 1,361.00p -2.23%
Vesuvius (VSVS) 461.40p -2.18%
Riverstone Energy Limited (RSE) 901.00p -1.91%
Ted Baker (TED) 2,226.00p -1.81%
Cranswick (CWK) 1,284.00p -1.68%
Booker Group (BOK) 169.00p -1.52%
Electra Private Equity (ELTA) 2,440.00p -1.41%
Diploma (DPLM) 733.00p -1.35%
Oxford Instruments (OXIG) 1,550.00p -1.34% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed after UK, US data releases - UK surplus shrinks in January
- British retail sales fall
- Ukraine leaders sign peace deal
FTSE 100: 0.38%
DAX: 0.46%
CAC 40: 0.60%
FTSE MIB: -0.30%
IBEX 35: 0.07%
Stoxx 600: 0.41%
European stocks were little changed following the release of reports on Britain’s public finances, UK retail sales and US home sales.
Britain's public finances, excluding financial sector interventions, showed a £4.718bn surplus in January, down from £6.035bn a year ago, reflecting lower income tax and corporation tax recipes. Economists had forecast a surplus of £8.15bn.
The release comes as Finance Minister George Osborne prepares his annual budget.
Another report from the Office for National Statistics (ONS) revealed an unexpected 1.5% month-on-month decline in British retail sales in January, the biggest drop since April 2012.
Sales were up 4.3% up on the year, but it was weaker than forecast. The ONS said that the fall was mainly due to poor supermarket and clothes sales.
Ukraine signs peace deal
Ukraine opposition leaders signed a peace deal with President Viktor Yanukovich on Friday in an effort to end violent protests that have left dozens dead.
The deal paves the way for an early presidential election some time this year as Yanukovich comes under pressure to quit from mass demonstrations in Kiev. A vote for it had been due in March 2015.
It comes after the European Union agreed to impose sanctions on Ukrainian officials "responsible for violence”.
At least 77 people have been killed this week. The deadly riots began after Yanukovich turned down a EU trade deal and instead accepted a $15bn bailout deal with Russia.
Vodafone, RBS
Vodafone edged up after UBS aid the mobile-phone operator may attract potential bidders after the sale of its stake in Verizon Wireless.
Royal Bank of Scotland rallied following reports it will cut 30,000 jobs as it slashes its investment banking arm to scale back costs.
Valeo gained after the French auto-parts maker posted half-year earnings that beat analysts’ estimates.
Tehcnip was higher after Societe Generale SA upgraded its rating on the stock to ‘buy’ from ‘neutral’, saying Europe’s largest oilfield-services provider may begin to reduce costs on tighter spending.
Elekta AB slipped as the manufacturer of medical products used in cancer and neurological treatments cut its sales forecast for the current year.
Kering SA dropped after growth at its Gucci luxury-goods brand slowed more than analysts had projected.
The euro rose 0.06% to $1.3727.
Brent crude futures fell $0.501 to $109.750 per barrel, according to data on the ICE. |
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| | US Market Report | | US open: Stocks hold on to gains despite weak housing data - S&P 500 nearing all-time high
- Existing home sales drop 5.1 per cent
- H-P, Amazon rise; Groupon drops
Dow Jones: 0.35%
Nasdaq: 0.32%
S&P 500: 0.29%
US stocks edged higher on Friday morning with the S&P 500 nearing its all-time high despite yet another disappointing report from the housing market.
The S&P 500, which is on track for its third weekly gain in a row, rose 0.3% to 1,845.09 shortly after the opening bell, closing in on its record close of 1,848.38 reached on January 15th.
Existing home sales fell by 5.1% in January to a seasonally adjusted annual rate of 4.62m, according to the National Association of Realtors, from 4.87m in December. This was the slowest pace since July 2012 and compares with the consensus forecast of 4.67m.
This follows some gloomy economic data from the housing market earlier in the week which showed that housing starts slumped 16% in January, while building permits dropped 5.4%. Meanwhile, a key gauge of homebuilder sentiment fell to its lowest level in nine months in February.
In other news, this weekend’s Group of 20 meeting will be closely watched as finance ministers and central bankers meet in Sydney to discuss how to reduce volatility in the market as the Federal Reserve scales back its bond-buying programme.
The Fed has said it will continue reducing monthly asset purchases until ending it all together later this year which has raised fears that it would hurt emerging markets amid weakening prices.
The G20 is looking for ways to support global growth in the next five years while maintaining fiscal sustainability, according to a draft communique seen by Bloomberg News. The G-20 will release the communique on February 23rd.
H-P, Amazon rise, Groupon drops
Hewlett-Packard gained after posting first-quarter revenue and profit that comfortably beat analysts’ estimates. Revenues, in particular, fell by just 1% year-on-year, compared with the 4% decline expected by the market.
Amazon.com advanced after The Wall Street Journal reported that the online retailer has discussed adding listings for 10 brands including J. Crew, Ralph Lauren and Lord & Taylor.
Online voucher group Groupon, however, plummeted despite forecast-beating results for the fourth quarter, as it said higher expenses for acquisitions and marketing will have an impact on first-quarter profit.
CommScope Holding Inc. was higher after the telecoms company forecast first-quarter adjusted earnings that exceeded market predictions. |
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| | Brokers Tips | | RBS, IHG, Glencore Xstrata, Smiths Group Numis Securities has reiterated its ‘add’ rating and 374p target for banking group RBS ahead of its 2013 results next week.
The results, which are due out February 27th, are expected to see the bank report a statutory loss of £7.2bn, which includes the £4.5bn upfront provision for the new ‘Internal Bad Bank’, Numis estimates.
Credit Suisse has cut its recommendation for Holiday Inn and Crowne Plaza owner InterContinental Hotels Group from ‘neutral’ to ‘underperform’ and reduced its target from 1,980p to 1,810p, saying investors are paying a “peak price for off-peak performance”.
The bank pointed out that the stock is trading just 4% below its all-time high and its current operating performance is weaker than history and other peers in the sector.
Mining group and commodities trader Glencore Xstrata was trading in the red on Friday morning after JPMorgan Cazenove cut its rating on the stock from ‘overweight’ to ‘neutral’, saying that its peers have overtaken it in terms of capital returns potential.
JPMorgan said that upcoming sale of the Las Bambas copper project in Peru presents downside risk for the shares if a deal – proceeds speculated at around $4.5bn – is not concluded before the 2013 results announcement on March 4th.
UBS has downgraded its rating for technology and engineering firm Smiths Group from ‘neutral’ to ‘sell’ and trimmed its target from 1,450p to 1,340p, saying that it has lower growth potential than others in the sector.
“Smiths comes out in the bottom quartile on our sector quality analysis looking at historical performance. Going forward, a forecast three-year earnings per share compound annual growth rate of c5% is also at the low end of the group,” said analysts Mark Fielding and Robbie Capp | | |
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