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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 erase losses but still end lower - Earnings from ARM, BP, BG Group coming in mixed
- FTSE 100 erases losses but still ends lower
- Markets consolidate before risk events, says analysts
techMARK 2,746.10 -0.75%
FTSE 100 6,449.27 -0.25%
FTSE 250 15,540.28 -0.12%
The FTSE 100 erased earlier losses, but still finished lower on Tuesday as mixed corporate earnings and ongoing concerns about global growth continued to weigh on market sentiment.
Investors were also showing nerves ahead of a number of so-called "risk events" later this week which have the potential to spark volatile swings on financial markets.
The European Central Bank is to convene for a policy meeting on Thursday and the decision will be closely watched given last month's surprise dip in inflation. Meanwhile, January's US jobs report is due out on Friday with traders waiting to see whether the recent severe weather has affected activity in the labour market.
"Equity markets are mainly consolidating before deciding on the next move," according to Brenda Kelly, Chief Market Strategist from IG.
London's benchmark index, which slumped to an intraday low of 6.416.72 early on, finished at 6,449.27, down just 16.39 points on the day.
Nevertheless, the downwards pressure followed steep falls in Asia overnight and on Wall Street on Monday with the S&P 500 and Dow Jones Industrial Average ending with their worst losses since June 2013.
Data yesterday showed that manufacturing activity in the States slowed considerably in January due to the harsh winter weather across many regions. Markets were also reacting to ongoing weakness in Chinese economic indicators.
Meanwhile, there were renewed worries about the US debt ceiling after Treasury Secretary Jacob Lew warned that the federal debt limit could be breached by the end of the month.
Results come in mixed
Chip designer ARM Holdings dropped sharply after its fourth-quarter results showed that Processor Division royalties came in below forecasts once again. Strong licensing revenues, however, helped top-line figures come in ahead of expectations.
Oil major BP managed to erase losses to finish flat after it reported a weaker bottom line for the fourth quarter, leading to a steep drop in underlying profits for 2013.
BG Group was higher after increasing fourth-quarter revenue and other operating income by 16% as it partly offset declines in Egypt and lower activity in the US by new developments coming onstream.
Electronics and maintenance products distributor Electrocomponents sank despite meeting estimates with underlying sales growth of 2% in the four months through January.
Online grocery group Ocado was lower after saying that annual losses widened significantly last year and that its co-founder and current Commercial Director is to retire.
In contrast, Premier Oil surged after the news that Chief Executive Simon Lockett is stepping down from the company after nine years in the role.
Polymer producer Victrex impressed after saying that sales rose 6% in the first quarter and that the second quarter has "started well".
Financial stocks finished with decent gains with Aberdeen, Hargreaves Lansdown and Prudential among the best performers.
Precious metal groups Randgold, Fresnillo and African Barrick Gold were tracking the prices of gold and silver lower. |
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| | FTSE 100 - Risers
Aberdeen Asset Management (ADN) 395.00p +4.86%
Hargreaves Lansdown (HL.) 1,497.00p +3.31%
Prudential (PRU) 1,242.00p +3.16%
RSA Insurance Group (RSA) 99.00p +2.86%
Anglo American (AAL) 1,436.50p +2.83%
Associated British Foods (ABF) 2,762.00p +2.83%
BG Group (BG.) 1,051.50p +2.59%
Tate & Lyle (TATE) 772.50p +2.39%
Burberry Group (BRBY) 1,435.00p +1.99%
easyJet (EZJ) 1,660.00p +1.53%
FTSE 100 - Fallers
ARM Holdings (ARM) 875.00p -5.91%
Randgold Resources Ltd. (RRS) 4,319.00p -3.05%
Admiral Group (ADM) 1,408.00p -1.95%
BAE Systems (BA.) 415.80p -1.89%
Melrose Industries (MRO) 297.10p -1.85%
Severn Trent (SVT) 1,730.00p -1.82%
Kingfisher (KGF) 358.30p -1.73%
Pearson (PSON) 1,088.00p -1.72%
Vodafone Group (VOD) 218.55p -1.60%
Bunzl (BNZL) 1,369.00p -1.58%
FTSE 250 - Risers
Victrex plc (VCT) 1,947.00p +10.37%
Premier Oil (PMO) 291.10p +8.58%
Jupiter Fund Management (JUP) 379.00p +4.55%
Riverstone Energy Limited (RSE) 915.00p +3.98%
Bank of Georgia Holdings (BGEO) 2,210.00p +2.79%
Rotork (ROR) 2,453.00p +2.51%
Synthomer (SYNT) 276.40p +2.22%
Devro (DVO) 316.50p +2.10%
Northgate (NTG) 560.00p +2.00%
IP Group (IPO) 177.90p +1.95%
FTSE 250 - Fallers
Electrocomponents (ECM) 252.40p -4.86%
African Barrick Gold (ABG) 220.00p -4.64%
RPS Group (RPS) 325.00p -4.52%
Essar Energy (ESSR) 54.35p -4.31%
Evraz (EVR) 79.30p -4.17%
Daejan Holdings (DJAN) 4,737.00p -3.80%
Premier Farnell (PFL) 208.00p -3.75%
Homeserve (HSV) 307.00p -3.34%
Imagination Technologies Group (IMG) 164.80p -3.23%
Ferrexpo (FXPO) 149.70p -3.17% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed after Italy CPI, US factory orders - Italy's inflation drops
- US factory orders decline
- ECB expected to act on falling inflation
FTSE 100: -0.25%
DAX: -0.64%
CAC 40: 0.24%
FTSE MIB: 0.60%
IBEX 35: 0.30%
Stoxx 600: -0.20%
European stocks were mixed as investors weighed Italian inflation data and a report on US factory orders.
Italy's harmonised index of consumer prices (HICP), measured under the European Union methodology, rose 0.6% on an annual basis in January, after recording a 0.7% gain in December, preliminary estimates from statistical office Istat showed.
Month-on-month, HICP decreased by 2.6% in January, more than forecast. Prices were dragged down by food, alcohol and tobacco.
Stocks fell following the release of the report but picked up slightly after a less-than expected fall in US factory orders.
US factory orders dropped by 1.5% in December after a revised 1.5% gain the month before; analysts had predicted a 1.8% fall.
ECB expected to act on falling inflation
Credit Suisse said it expects euro-area inflation to fall further, prompting the European Central Bank (ECB) to take the deposit rate marginally into negative territory and a cut in its main policy rate in March or April.
With inflation currently at 0.7%, well below the ECB's 2% target, Credit Suisse said the monetary authority is unlikely to remain idle.
The broker expects the central bank to move in March or April, but said the possibility that it would bring forward the decision to this Thursday's policy meeting is a risk.
"We expect headline and core to hit a new low in March at 0.4% year-on-year. 2014 inflation is likely to be well below the ECB December staff projections, and prospects for the medium term have also weakened in our view," the broker said.
ARM, BG Group
ARM Holdings tumbled after the chipmaker reported a drop in fourth quarter profit, reflecting an impairment charge.
BG Group edged lower after the UK natural gas producer posted a quarterly loss as Egyptian exports were disrupted and costs rose.
UBS and Munich Re advanced after they both posted quarterly earnings that beat analysts' expectations.
Banco Comercial Portugues rallied after posting a smaller annual loss than analysts had forecast.
Vestas Wind Systems declined after saying it seeks to raise capital.
BP slumped as the oil giant said fourth-quarter profit fell to $2.8bn from $3.9bn a year earlier.
Premier Oil was up after Simon Lockett said he will step down as Chief Executive.
The euro fell 0.15% to $1.3505.
Brent crude futures dipped $0.066 to $105.970 per barrel, according to the ICE. |
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| | US Market Report | | US open: Markets rebound after sell-off, Microsoft names new CEO - Factory orders fall less than expected
- Microsoft names Nadella as New CEO
- JC Penney, Michael Kors, Yum Brands impress
Dow Jones: 0.22%
Nasdaq: 0.59%
S&P 500: 0.48%
US stocks opened with small gains on Tuesday as investors hunted for bargains in the aftermath of the market's worst sell-off in eight months.
A less-than-expected decline in factory orders also helped to repair sentiment slightly this morning in New York. US factory orders fell by 1.5% in December after a revised 1.5% gain the month before; analysts had predicted a 1.8% fall.
Both the S&P 500 and Dow Jones Industrial Average registered their worst declines since June 2013 on Monday with the Dow reporting its seventh triple-digit loss of the year so far.
This came after the Institute for Supply Management's (ISM) index measuring activity within the manufacturing sector plunged to an eight-month low in January from 56.5 in December.
There were also renewed worries about the debt ceiling after Treasury Secretary Jacob Lew warned that the federal debt limit could be breached by the end of the month.
Microsoft names new CEO
Shares in software giant Microsoft advanced after the opening bell after the company ended months of uncertainty by naming Satya Nadella as its new Chief Executive, who will succeed Steve Ballmer who first announced plans to retire back in August.
The company also said that Chairman and co-founder Bill Gates would be taking on a new role as Technology Advisor and will be replaced by John Thompson, Lead Independent Director.
JC Penney edged higher after a 2% rise in same-store sales for its fourth quarter. This was the first time quarterly same-store sales have grown at the retailer in two and a half years.
Luxury fashion accessories group Michael Kors jumped after same-store sales in its third quarter surged 28%, pushing profits 77% higher. The company also raised its full-year guidance for earnings and revenues.
Taco Bell and KFC owner Yum Brands was also a high riser after beating forecasts with its fourth-quarter earnings.
The share price of Furiex Pharmaceuticals more than doubled after two clinical trials met FDA standards.
Heart-valve maker Edwards Lifesciences dropped as it said adjusted earnings will reach 61-71 cents a share in the first quarter of this year, compared to analysts' estimates of 71 cents.
Take-Two Interactive Software, maker of the Grand Theft Auto V video game, declined as it projected profit would not exceed 10 cents a share this quarter, missing the average analyst prediction of 13 cents. |
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| | Broker Tips | | Broker tips: BP, ARM, Vodafone, Sainsbury Investec has maintained its 'hold' recommendation for oil giant BP, labelling the company's full-year results as 'weak'.
"As the only one of the three UK majors not to warn on profits and/or guidance, BP looks like the undisputed champion in Q4," said Analyst Neill Morton. "However, this should not ignore a weak set of results – on largely unchanged oil prices, net income is down 24% versus Q3 and 29% year-on-year."
Numis Securities has reiterated its 'reduce' rating for chip designer ARM Holdings after the company's fourth-quarter results showed that Processor Division royalties came in below forecasts once again.
"We are likely to remain cautious on FY14E royalties when the main engine of recent growth is clearly sputtering," said Numis Analyst Nick James.
The probability of an AT&T bid for Vodafone is "slipping", according to analysts at Credit Suisse, who said that the outlook for the US mobile market is worsening.
Credit Suisse said on Tuesday that a Vodafone bid is becoming an "increasingly risky move for AT&T". It now assumes a one-in-three probability that the company will make an offer, down from 50/50 previously.
Supermarket group Sainsbury was a standout performer on the FTSE 100 on Tuesday morning after analysts at Bernstein upgraded the stock from 'market perform' to 'outperform', saying that it is a 'well-run retailer'.
The stock has been under pressure as of late, falling 6% over the past month, with its valuation now 18% below industry fair-value, the broker said. As such, this creates a "compelling entry point" given that recent concerns have been overplayed, it said. | | |
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