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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: Markets subdued ahead of policy decisions, US jobs report - Economic data from across the globe fails to impress
- Policy decisions, US non-farm payrolls being watched
- Tullow jumps on bid speculation, AB Foods and RSA rise strongly
- Hargreaves Lansdown drops sharply after H1 report
techMARK 2,745.01 -0.04%
FTSE 100 6,457.89 +0.13%
FTSE 250 15,561.38 +0.14%
It was a relatively subdued session for the UK equity market with stocks trading within a narrow range for most of the day as investors digested poor economic data from across the globe.
Nevertheless, bargain hunters ensured that the benchmark FTSE 100 finished in positive territory following five straight days of losses. The index closed 8.62 points higher at 6,457.89.
However, upside was limited ahead of a number of key risk events in the coming days, including policy decisions from the UK and Eurozone tomorrow and the all-important US non-farm payrolls report on Friday.
Economic data fails to impress
The UK services purchasing managers' index (PMI) eased from 58.8 to 58.3 in January, surprising analysts who had expected a slight pick-up to 59.
The final reading of the Eurozone composite PMI was revised to 52.9 in January, up from 52.1 in the previous month but below the preliminary estimate of 53.2.
Eurozone retail sales dropped by 1.6% in December, reversing after a revised 0.9% increase the month before; the consensus forecast was for a 0.7% decline.
The US ADP employment report showed that 175,000 private jobs were added in January, down from 227,000 a month earlier and lower than the 185,000 estimate.
On a positive note, the Institute for Supply Management’s US non-manufacturing index rose from 53 to 54 in January, ahead of the 53.7 level expected by analysts.
Tullow jumps late on
Tullow Oil finished over 7% higher with analysts citing renewed bid speculation involving Norwegian oil and gas group Statoil. The stock has come been under pressure over recent weeks as rumours regarding a potential takeover began to subside.
AB Foods was extending gains after analysts at Morgan Stanley said yesterday that the market was "fundamentally mispricing" its Primark retail chain.
RSA Insurance rose strongly after appointing former RBS frontman Stephen Hester as its new Chief Executive Officer. Hester, credited with turning around RBS after the financial crisis, will take the helm at the troubled insurance group with immediate effect.
Fund manager and brokerage firm Hargreaves Lansdown underwhelmed with record first-half revenues and profits this morning as the stock retreated after its recent strong run. “Given that the shares only recently hit record highs, expectations had probably been a little on the high side,” said Chief Market Analyst Michael Hewson from CMC Markets.
Essar Energy was a high riser today on the FTSE 250, rebounding after a 25% slump since the start of the year. The stock was up over 10% by the close after nearing record lows earlier in the session.
Home emergency insurer HomeServe was also higher after saying it expects full-year adjusted profits to be in line with market expectations.
Infrastructure services group Balfour Beatty rose after RBC Capital Markets upgraded its rating by two notches from ‘underperform’ to ‘outperform’, saying that the stock is geared to the recovery in the UK. |
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| | FTSE 100 - Risers
Tullow Oil (TLW) 849.50p +7.06%
RSA Insurance Group (RSA) 103.60p +4.65%
Associated British Foods (ABF) 2,883.00p +4.38%
William Hill (WMH) 343.90p +2.75%
Fresnillo (FRES) 792.00p +2.52%
Randgold Resources Ltd. (RRS) 4,406.00p +2.01%
ARM Holdings (ARM) 892.50p +2.00%
Shire Plc (SHP) 3,075.00p +1.96%
British Sky Broadcasting Group (BSY) 893.50p +1.88%
Aberdeen Asset Management (ADN) 401.70p +1.70%
FTSE 100 - Fallers
Hargreaves Lansdown (HL.) 1,345.00p -10.15%
Tate & Lyle (TATE) 755.50p -2.20%
Sage Group (SGE) 407.20p -1.83%
Imperial Tobacco Group (IMT) 2,189.00p -1.71%
Aggreko (AGK) 1,548.00p -1.65%
Smiths Group (SMIN) 1,375.00p -1.50%
Vodafone Group (VOD) 215.90p -1.21%
Kingfisher (KGF) 354.40p -1.09%
Wolseley (WOS) 3,225.00p -1.01%
CRH (CRH) 1,554.00p -0.96%
FTSE 250 - Risers
Essar Energy (ESSR) 59.30p +9.11%
Foxtons Group (FOXT) 371.00p +5.37%
Ashmore Group (ASHM) 334.40p +5.29%
Homeserve (HSV) 322.00p +4.89%
Wetherspoon (J.D.) (JDW) 804.50p +4.34%
Hiscox Ltd (HSX) 651.50p +4.32%
Thomas Cook Group (TCG) 181.40p +3.95%
Balfour Beatty (BBY) 293.30p +3.31%
Ocado Group (OCDO) 526.50p +3.24%
Bank of Georgia Holdings (BGEO) 2,280.00p +3.17%
FTSE 250 - Fallers
Cairn Energy (CNE) 201.50p -4.91%
Oxford Instruments (OXIG) 1,550.00p -4.85%
Victrex plc (VCT) 1,854.00p -4.78%
Hellermanntyton Group (HTY) 283.10p -3.61%
Dunelm Group (DNLM) 879.50p -2.82%
Rotork (ROR) 2,391.00p -2.53%
Rank Group (RNK) 137.00p -2.49%
UDG Healthcare Public Limited Company (UDG) 336.40p -2.49%
Euromoney Institutional Investor (ERM) 1,280.00p -2.07%
Kenmare Resources (KMR) 15.85p -2.04% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed after US jobs and services data - US ADP report misses forecasts
- US services activity grows
- UK and Eurozone services PMI falls
- Eurozone retail sales decline
FTSE 100: 0.13%
DAX: -0.13%
CAC 40: 0.01%
FTSE MIB: 0.06%
IBEX 35: 0.21%
Stoxx 600: 0.14%
European stocks were mixed after a report on US private payrolls came in worse than expected.
Private-sector companies increased payrolls by 175,000 in January, compared to 227,000 a month earlier, according to ADP. Economists had called for 185,000 more jobs.
“We have not changed our forecast in response to this release, which is consistent with our expectation of a 175k rise in nonfarm payrolls, a 175k increase in private payrolls, and an unchanged unemployment rate of 6.7%,” Barclays said.
The report comes ahead of the Labor Department’s non-farm payrolls data on Friday which is expected to show the number of people hired in January rose to 184,000 from just 74,000 in December.
ECB policy meeting
The European Central Bank meets tomorrow, when it is expected to keep its policy unchanged.
However, the ECB is coming under mounting pressure to take greater measures to tackle falling inflation and the stagnant recovery.
ECB members are apparently showing varying degrees of concern about the threat of deflation in the Eurozone that could alter its current monetary policy stance, according to MNI sources.
Inflation is currently at 0.7%, well below the ECB’s 2% target.
GSK gains after fourth quarter results
GlaxoSmithKline advanced after saying it expects revenue and profit to increase this year.
Swatch Group rallied after reporting full-year profit that beat analysts’ estimates.
Hargreaves Lansdown slumped after saying its operating margins fell in the first half.
Svenska Handelsbanken was higher after announcing a special dividend that lifted its annual payout by 53%.
Syngenta declined after the biggest maker of crop chemicals reported full-year profit and revenue that missed forecasts.
The euro dropped 0.01% to $1.3518.
Brent crude futures rose $0.264 to $106.060 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks mostly lower after mixed data - 175,000 private payrolls added in January, worse than estimates
- ISM services index beats forecasts
- Time Warner, Ralph Lauren fall despite strong results
Dow Jones: 0.07%
Nasdaq: -0.43%
S&P 500: -0.13%
US stocks broadly declined on Wednesday morning after a report on private payrolls came in worse than expected, though losses were trimmed slightly after service-sector data exceeded forecasts.
Private-sector companies increased payrolls by 175,000 in January, compared to 227,000 a month earlier, according to ADP. Economists had called for 185,000 more jobs.
The report comes ahead of the Labor Department’s non-farm payrolls data on Friday which is expected to show the number of people hired in January rose to 184,000 from just 74,000 in December.
While the ADP number is often seen as a rough indicator of the official figure, Analyst Cooper Howes from Barclays pointed out that the different methodology used in each report “limits is usefulness for forecasting on a month-to-month basis”.
In other economic news, the Institute for Supply Management’s non-manufacturing index rose from 53 to 54 in January, ahead of the 53.7 level expected by analysts.
Meanwhile, the Mortgage Bankers Association’s seasonally adjusted mortgage application index increased by 0.4% in the week ended January 31st after a 0.2% decline the month before.
Time Warner falls despite strong Q4
Media giant Time Warner opened lower despite beating forecasts with its fourth-quarter results. The company, which owns HBO and the Warner Bros. film studio, reported a 12% fall in net income but adjusted earnings managed to come in ahead of expectations.
Fashion retailer Ralph Lauren also underwhelmed after exceeding analysts’ estimates and upgrading its full-year sales guidance.
Health insurer Humana retreated after swinging to a loss in the fourth quarter.
Myriad Genetics gained as the breast-cancer test provider lifted its 2014 projections.
Cognizant Technology Solutions dropped after the provider of outsourcing services forecast 2014 earnings that fell short of analysts’ estimates. |
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| | Broker Tips | | JPMorgan Cazenove has said that the appointment of Stephen Hester at RSA is 'welcome and timely' ahead of the outcome of the review into the troubled insurance firm due later this month.
The bank said that Hester has "significant" experience in restructuring in the financial sector and his retail banking background "should help in establishing processes that strengthen the group’s control function whilst at the same time bringing new strategic insights to RSA".
Galvan Research and Trading has labelled television group ITV as a 'buy' on the back of the company's move into the pay-TV market with its new ITV Encore channel.
"Given that the company is a play on the UK economic recovery, the new Encore channel appears ideally timed to capture extra revenues from the consumer, while the ultra-solid fundamentals are also supported by the ongoing uptrend in the shares. Switch over and buy ITV," Galvan said.
RBC Capital Markets has upgraded its rating for infrastructure services company Balfour Beatty by two notches, saying that the stock is "geared to the recovery" in the UK.
The broker lifted its stance on the shares from 'underperform' to 'outperform' and hiked its target from 210p to 310p. "We believe that the outlook in its end markets is more positive," said Analyst Olivia Peters. | | |
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