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Feb 7, 2014

Morning Euro Markets Bulletin

 
ADVFN  Morning Euro Markets Bulletin
Daily world financial news Friday, 07 February 2014 09:42:10
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London Market Report
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London open: Markets pause ahead of US jobs data, stocks flat

- Non-farm payrolls estimated at 180,000
- China services PMI falls to 50.9
- Tate & Lyle upgraded by JPMorgan to 'overweight'
- Shires stops development of depression drug

techMARK 2,781.99 +0.10%
FTSE 100 6,561.78 +0.05%
FTSE 250 15,827.61 +0.24%

The FTSE 100 was broadly flat on Friday morning with trading rangebound ahead of the highly-anticipated US jobs report due out later this afternoon.

Yet more disappointing data from China was also helping to cap upside on markets this morning.

London's benchmark index was also pausing for breath following an impressive 1.55% jump on Thursday after European Central Bank (ECB) President Mario Draghi said that policymakers stand "ready and willing to act" despite leaving interest rates unchanged at this month's meeting.

The FTSE 100 was trading at around 6,562 early on, just 0.05% higher than Thursday's closing price.

US markets rose strongly last night after some better-than-expected jobless claims data with the Dow Jones Industrial Average and S&P 500 registering their best gains in seven weeks.

As for today, investors will be awaiting the US Labor Department's official non-farm payroll data due out at 13:30, which is expected to show that non-farm payrolls rose to 180,000 in January from just 74,000 in December.

In China overnight, it was revealed that the HSBC/Markit service-sector purchasing managers' index (PMI) fell from 50.9 to 50.7 in January. While still showing an expansion – reflected in any number above 50 – the slight fall represents a slowdown in growth to the lowest level in two and a half years.

Tate & Lyle jumps after upgrade, Shire falls

Sugar and sweeteners firm Tate & Lyle was among the best performers this morning after JPMorgan Cazenove lifted its rating on the stock from 'underweight' to 'overweight'. The bank said that group earnings have been held back recently by investment in the speciality food ingredients division "but we believe this is now bearing fruit".

Heading the other way was Shire after saying it will no longer pursue the development of Vyvanse as a clinical trial of the drug for the treatment of major depressive disorder failed to meet objectives.

Pharmaceuticals peer AstraZeneca was in demand as it attempted to rebound after falling yesterday following its 2013 results. The company said that annual revenues fell 6% as it was hurt by competition from generic brands.

In contrast, telecoms giant Vodafone was lower as the stock pulled back from a decent rise the day before after third-quarter revenues declined by less than expected.

Oil stocks including Tullow and Shell were trading lower early on as crude prices declined.

Meanwhile, mining stocks were performing well with Antofagasta, Fresnillo, Randgold and Glencore Xstrata making moderate gains.

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FTSE 100 - Risers
Tate & Lyle (TATE) 783.50p +2.96%
Aberdeen Asset Management (ADN) 414.20p +1.57%
Persimmon (PSN) 1,359.00p +1.42%
Meggitt (MGGT) 510.50p +1.19%
Intertek Group (ITRK) 2,888.00p +1.19%
Antofagasta (ANTO) 884.50p +1.03%
Fresnillo (FRES) 790.50p +1.02%
Randgold Resources Ltd. (RRS) 4,380.00p +1.01%
Glencore Xstrata (GLEN) 325.60p +0.96%
TUI Travel (TT.) 427.70p +0.92%

FTSE 100 - Fallers
Shire Plc (SHP) 3,088.00p -1.69%
Standard Chartered (STAN) 1,240.00p -1.23%
Tullow Oil (TLW) 852.00p -1.22%
BG Group (BG.) 1,076.50p -0.92%
Coca-Cola HBC AG (CDI) (CCH) 1,598.00p -0.81%
Sports Direct International (SPD) 696.50p -0.71%
Royal Dutch Shell 'A' (RDSA) 2,091.00p -0.62%
Vodafone Group (VOD) 222.75p -0.51%
Unilever (ULVR) 2,337.00p -0.51%
CRH (CRH) 1,590.00p -0.50%

FTSE 250 - Risers
Vedanta Resources (VED) 863.00p +4.92%
Rotork (ROR) 2,421.00p +2.93%
Perform Group (PER) 241.40p +2.72%
Fidessa Group (FDSA) 2,347.00p +2.49%
Evraz (EVR) 82.60p +2.35%
Ferrexpo (FXPO) 160.30p +2.10%
BlackRock World Mining Trust (BRWM) 488.50p +1.77%
Oxford Instruments (OXIG) 1,567.00p +1.75%
Grainger (GRI) 228.80p +1.69%
Alent (ALNT) 318.50p +1.59%

FTSE 250 - Fallers
Imagination Technologies Group (IMG) 180.30p -2.59%
Betfair Group (BET) 1,024.00p -1.92%
St. Modwen Properties (SMP) 385.80p -1.58%
Diploma (DPLM) 684.00p -1.30%
Daejan Holdings (DJAN) 4,778.00p -1.08%
Computacenter (CCC) 649.50p -1.07%
Brewin Dolphin Holdings (BRW) 316.60p -1.06%
PayPoint (PAY) 1,118.00p -0.89%
Marston's (MARS) 145.50p -0.89%

UK Event Calendar


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Europe Market Report
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Europe open: Stocks mixed ahead of US non-farm payrolls

- Traders eye US non-farm payrolls
- German court refers ECB's OMT to EU court
- NIESR lifts UK economic growth outlook

FTSE 100: 0.03%
DAX: -0.05%
CAC 40: -0.12%
FTSE MIB: 0.16%
IBEX 35: -0.10%
Stoxx 600: 0.19%

European stocks were mixed before the release of the US non-farm payrolls report and after German judges referred a complaint against the European Central Bank's (ECB) bond-buying programme to the European Court.

The Labor Department's jobs data is expected to show businesses added 188,000 employees in January after a revised 87,000 increase in December.

Analysts predict the US unemployment rate held at 6.7% in January.

It follows the release of yesterday's initial US unemployment claims for the week ending February 1st which dropped more than forecast by 20,000 to 331,000.

On Wednesday, the ADP revealed private-sector companies increased payrolls by 175,000 in January, compared to 227,000 a month earlier and the forecast of 185,000.

Investors and policymakers are closely monitoring the labour market after the Federal Reserve announced a second round of monetary stimulus tapering last month, noting the improvement in the US recovery.

Ahead of today's US jobs data, reports on UK manufacturing and industrial production will be released.

Analysts predict industrial production in December rose by 2.3% against the prior year, compared to a 2.5% increase in November. Manufacturing output is also tipped to climb 2.3% in December, down from the prior month's 2.8% growth.

It follows Markit's UK manufacturing purchasing managers' index (PMI) on Monday which slipped to 56.7 in January from December's downwardly revised 57.2, slightly short of analysts' expectations for 57. A reading above 50 signals expansion.

German court refers ECB's OMT to European Court

Germany's Constitutional Court has referred an objection against the ECB's "unlimited" quantitative easing programme to the European Court.

The ECB's Outright Monetary Transactions (OMT) programme was announced by ECB chief Mario Draghi in September 2012 and is widely credited with stabilising the euro.

The court said it sees "important reasons to assume that it exceeds the European Central Bank's monetary policy mandate and thus infringes the powers of the member states, and that it violates the prohibition of monetary financing of the budget".

The news erased earlier gains in the European market.

NIESR raises UK economic growth forecast

The National Institute of Economic and Social Research (NIESR) on Friday raised its UK economic growth forecast to 2.5% from a previous 2%.

The economic research body said growth will be driven by consumer spending and demand in the housing market but warned that weak productivity poses a risk for the country's medium-term outlook.

NIESR expects growth to ease in 2015 to 2.1%, less than other economists' projections.

Britain's economy grew by 1.9% in 2013, the fastest rate since the 2008 financial crisis.

ArcelorMittal, Statoil

ArcelorMittal advanced after the world's biggest steelmaker posted fourth-quarter profit that exceeded analysts' expectations.

Statoil declined as the Norwegian oil-company reported a drop in quarterly profit that fell short of market forecasts.

Shire slumped after saying it will no longer pursue the development of Vyvanse, its medicine for the treatment of major depressive disorder.

Tate & Lyle gained after JP Morgan upgraded the agribusiness to an 'overweight' rating from 'underweight'.

The euro fell 0.17% to $1.3567.

Brent crude futures dropped $0.056 to $107.130 per barrel, according to ICE data.


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US Market Report

US close: Stocks gain most in seven weeks as jobless claims decline

- Jobless claims drop by 20,000, beat expectations
- Trade deficit widens as exports fall
- ECB 'ready and willing to act'

Dow Jones: 1.22%
Nasdaq: 1.14%
S&P 500: 1.24%

US markets rose strongly on Thursday after some better-than-expected jobless claims data with the Dow Jones Industrial Average and S&P 500 registering their best gains in seven weeks.

Stocks were also helped by a bullish session in Europe where indices across the continent gained strongly after comments from European Central Bank (ECB) President Mario Draghi.

The ECB kept interest rates unchanged despite mounting pressure to take greater measures to tackle slowing price rises, with Draghi once again playing down concerns over deflation. Nevertheless, he said that while policymakers are awaiting more data to be released in March before deciding whether to take further action, the ECB stands "ready and willing to act".

The Dow and S&P 500 both advanced around 1.2%, their best daily percentage performances since December 18th when the Federal Reserve first announced that it would taper it asset-purchase programme.

"In reality, the gains, while being the best since December 18th, are still relatively small compared with some of the losses recorded since the turn of the year," said Market Analyst Craig Erlam from Alpari UK.

He explained that the Dow has made triple-digit losses on seven sessions since the start of 2014.

"With this in mind, what we're looking at here is probably more of a minor correction than a change in sentiment," he said.

Jobless claims fall, trade deficit widens

US claims for unemployment benefits which fell 20,000 in the final week of January to a seasonally-adjusted 331,000. This was down from a revised 351,000 the previous week and under the 335,000 consensus forecast.

The news comes as investors awaited the Labor Department's all-important non-farm payroll data due out on Friday, which is expected to show that non-farm payrolls rose to 184,000 in January from just 74,000 in December.

Meanwhile, the US trade deficit increased by 12% in December to $38.7bn from a revised $34.6bn the month before; analysts were expecting a smaller increase to $36bn.

Exports dropped by 1.8% month-on-month to reach $191.3bn, with declines seen across a broad swathe of sectors. Imports gained 0.3% on the month to $230bn.

Green Mountain boosted by Coca-Cola deal

Green Mountain Coffee Roasters soared in after Coca-Cola said it would pay $1.25bn for a 10% stake in the firm and collaborate over new products. Green Mountain said it would use the proceeds for a share buyback to reduce the dilutive effects of the deal.

Entertainment company Walt Disney rose strongly after first-quarter net income jumped by a better-than-expected 33% to $1.84bn.

Meanwhile, Dunkin' Donuts and Baskin-Robbins owner Dunkin' Brands Group was also in demand after beating estimates.

Social media firm Twitter dropped sharply despite beating expectations with its quarterly results, as investors showed concerns with a slowdown in monthly active user growth.

Auto major General Motors disappointed after profits fell by a worse-than-expected 13% in the fourth quarter.


S&P 500 - Risers
Akamai Technologies Inc. (AKAM) $57.18 +20.58%
Alliance Data Systems Corp. (ADS) $258.55 +10.40%
Vulcan Materials Co. (VMC) $65.66 +9.09%
O'Reilly Automotive Inc. (ORLY) $146.72 +9.04%
Cliffs Natural Resources Inc. (CLF) $20.81 +8.22%
Snap On Inc. (SNA) $105.13 +7.76%
AutoZone Inc. (AZO) $517.16 +6.12%
Allstate Corp (The) (ALL) $52.36 +5.67%
Nabors Industries Ltd. (NBR) $17.49 +5.42%
Lennar Corp. Class A (LEN) $41.71 +5.38%

S&P 500 - Fallers
Chesapeake Energy Corp. (CHK) $24.41 -6.87%
Tesoro Corp. (TSO) $47.60 -4.70%
Perrigo Company plc (PRGO) $146.49 -4.43%
Cincinnati Financial Corp. (CINF) $45.21 -4.01%
Sealed Air Corp. (SEE) $29.86 -3.33%
CBRE Group Inc (CBG) $25.85 -3.26%
Range Resources Corp. (RRC) $83.99 -2.48%
Gilead Sciences Inc. (GILD) $76.50 -2.11%
Fiserv Inc. (FISV) $54.85 -1.58%
Stericycle Inc. (SRCL) $114.76 -1.48%

Dow Jones I.A - Risers
Walt Disney Co. (DIS) $75.56 +5.30%
American Express Co. (AXP) $85.69 +2.35%
Cisco Systems Inc. (CSCO) $22.49 +2.32%
JP Morgan Chase & Co. (JPM) $56.48 +2.30%
Caterpillar Inc. (CAT) $93.83 +2.03%
Intel Corp. (INTC) $23.99 +2.00%
General Electric Co. (GE) $24.95 +1.75%
E.I. du Pont de Nemours and Co. (DD) $62.96 +1.71%
Johnson & Johnson (JNJ) $88.75 +1.68%
Chevron Corp. (CVX) $111.27 +1.60%

Dow Jones I.A - Fallers
AT&T Inc. (T) $32.00 -0.25%
Wal-Mart Stores Inc. (WMT) $72.82 -0.07%
Verizon Communications Inc. (VZ) $46.68 -0.02%

Nasdaq 100 - Risers
Green Mountain Coffee Roasters Inc. (GMCR) $102.10 +26.24%
Akamai Technologies Inc. (AKAM) $57.18 +20.58%
O'Reilly Automotive Inc. (ORLY) $146.72 +9.04%
Nxp Semiconductors Nv (NXPI) $49.60 +5.53%
Ross Stores Inc. (ROST) $69.31 +4.56%
Vodafone Group Plc ADS (VOD) $36.67 +3.59%
Micron Technology Inc. (MU) $24.11 +3.43%
Wynn Resorts Ltd. (WYNN) $216.70 +3.41%
Costco Wholesale Corp. (COST) $114.26 +3.39%
Discovery Communications Inc. Class A (DISCA) $81.94 +3.21%

Nasdaq 100 - Fallers
Gilead Sciences Inc. (GILD) $76.50 -2.11%
Fiserv Inc. (FISV) $54.85 -1.58%
Stericycle Inc. (SRCL) $114.76 -1.48%
CH Robinson Worldwide Inc (CHRW) $52.47 -1.29%
Expeditors International Of Washington Inc. (EXPD) $40.12 -0.69%
Celgene Corp. (CELG) $149.91 -0.62%
Charter Communications Inc. (CHTR) $136.50 -0.62%
Illumina Inc. (ILMN) $150.06 -0.48%
Symantec Corp. (SYMC) $20.47 -0.34%
Catamaran Corp (CTRX) $48.34 -0.33%


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Newspaper Round Up

Friday newspaper round-up: Scotland, Royal Mail, China...

David Cameron will on Friday launch a personal campaign to save the UK, warning that the country would be "deeply diminished" if Scotland votes to secede in this year's independence referendum. In a dramatic intervention the UK prime minister will claim there are just "seven months to save the most extraordinary country in history" and will make an impassioned plea to Scots: "We want you to stay." - Financial Times

A range of investment banks valued Royal Mail last spring at up to £1.5bn more than it was eventually sold for, according to data obtained under a freedom of information request. The figures have re­ignited accusations that Britain's postal operator was privatised too cheaply in the country's most ambitious state sell-off for decades, with taxpayers allegedly losing out by hundreds of millions of pounds. - Financial Times

A Chinese developer that came to the London property market with a proposal to redevelop Royal Albert Dock has joined forces with PwC to attract businesses to Britain. Advanced Business Park said yesterday that it had set up a joint venture with the consultancy group to provide services to Chinese companies wanting to open in the UK. It said that it was part of its plan to turn the dock into a "hub for businesses from Asia". - The Times

Twitter boss Dick Costolo hinted that more changes to the social media site are planned for this year as he sought to reassure investors after user number growth slowed to a trickle in the last quarter. Costolo said the company would make it easier for people to sign up for the service and will also attempt to bring back inactive users, addressing concerns following fourth-quarter numbers that the site is not "mainstream" enough. - Scotsman

David Cameron and Ed Miliband are harming the long-term financial future of the country by ducking tough decisions and seeking refuge instead in cross-party consensus, the head of Britain's most respected economic think-tank has warned. Paul Johnson, Director of the Institute for Fiscal Studies, is predicting that political leaders will fight the next election campaign by highlighting differences over issues that have "trivial financial consequences", such as the winter fuel allowance. - The Times

Bombardier UK has fought off competition from foreign bidders to win the £1bn contract to build trains for London's Crossrail project. Britain's only train builder, based in Derby, beat Japan's Hitachi and CAF of Spain to supply 65 trains for the line. Bombardier – the British arm of the Canadian aerospace and transport manufacturer – had warned that missing out on the contract could cause the factory, which employs 1,500 workers, to close. - The Guardian

 

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