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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: Miners drag as Chinese data weighs sentiment - FTSE closes down 23.22 at 6,689.45
- China registers surprise trade deficit
- Japan GDP revised lower
- BCC increases growth forecast
techMARK 2,845.16 -0.52%
FTSE 100 6,689.45 -0.35%
FTSE 250 16,451.20 -0.65%
It was a negative finish for the FTSE today, dragged lower by miners on the back of poor Chinese data, although gains were partially offset by a strong performance by Rolls-Royce and British American Tobacco.
The top tier index closed down 23.22 points at 6,689.45.
China registers surprise trade deficit, Japanese GDP revised lower
Markets across Asia fell overnight after China's trade balance fell to a deficit of $22.98bn in February, compared with a revised surplus of $32.87bn in January and expectations for a surplus of $14.5bn.
This was China's first trade deficit in 11 months and comes after exports slumped at an annual rate of 18.1%, though analysts believe this largely reflects seasonal factors such as the Chinese Lunar New Year holiday, during which many factories remained shut. Imports grew by a slightly stronger-than-forecast 10.1% during the month.
Other data also showed that the annual rate of Chinese consumer price inflation fell to a 13-month low of 2% in February, down from 2.5% the month before and below forecasts.
Over in Japan, revised government figures revealed that Japanese gross domestic product (GDP) expanded by just 0.7% on an annualised basis in the final three months of last year, down from the initial estimate of 1% growth.
Meanwhile, the current account deficit hit a record 1.5trn yen (around £8.7bn) in January, which comes ahead of a planned tax increase on sales next month - a move that had been expected to prompt higher spending in the lead up to it.
Public sector pay soars above private
In UK news today, it was revealed that public sector pay has risen above private sector pay, with workers in the former paid an average 14.5% more, according to the Office of National Statistics.
It said: "Average pay levels vary between the public and private sectors because of the different jobs and characteristics of the people within each sector. The average pay difference in favour of the public sector has narrowed since the year 2010, which in part reflects the restraints on public sector pay over this period."
BCC predicts Q2 growth to exceed early-2008 levels
The British Chambers of Commerce (BCC) has forecast an increase in the size of the UK economy that will take it above the levels seen in early 2008.
It predicted economic growth for the year would be 2.8%, 0.1% higher than its previous estimate.
Meanwhile, in another interesting report out today, it was claimed that although the UK economy is set to outstrip pre-recession growth levels this year, it could falter unless the country embraces immigrant workers to ease a shortage of home-grown talent.
The economy, which is currently growing at about 0.7%, is set to surpass mid-2008 levels of economic growth of about 2.1% by July this year, the Business Trends report by accountants and business advisers BDO said.
However, it also waded into the controversy over immigration in the UK by warning that a skills shortage could worsen unless the country becomes more positive about migrant workers.
Rolls-Royce jumps on Daimler JV deal, broker comments
Rolls Royce was in the top spot today after a host of analysts lifted their targets following the engine group's move last week to buy-out Daimler in their 50-50 joint venture, Rolls-Royce Power Systems (RRPS). After the close of trade on Friday, Rolls-Royce said that it is to buy the remaining 50% stake in RRPS for £1.9bn. RRPS was formed in 2011 after Rolls-Royce and Daimler bought German engine maker Tognum.
Tobacco giant British American was benefitting from comments from Citigroup, which added the stock to its 'Focus List'.
GlaxoSmithKline (GSK) was also higher after it increased its stake in its pharmaceuticals subsidiary in India from 50.7% to 75% following an open offer. The transaction was valued at approximately £625m. The group said the move would increase its exposure to a "strategically important market".
At the other end of the index, Persimmon was firmly in the red, most likely due to readacross from sector peer Taylor Wimpey which Numis Securities downgraded from 'add' to 'hold'.
Mining stocks were also in the red as investors digested economic data from Asia. Fresnillo, Glenore Xstrata, Anglo American, Antofagasta and Rio Tinto were all trading lower by the close.
Looking ahead to Tuesday
Tomorrow's agenda includes economic data releases on UK industrial and manufacturing production, UK gross domestic product estimates and German trade balance.
Company wise, car dealership Inchcape is expected to unveil record annual results, with Numis predicting pre-tax profit of £268m, up 8.5% from £247m in 2012, driven by a strong second half. |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed on Eurozone, Asia economic data - Eurozone investor confidence grows
- Industrial output grows in Italy, falls in France and Spain
- Chinese exports decline, inflation eases
- Japan's GDP revised downward
- Russian forces advance in Ukraine
FTSE 100: -0.35%
DAX: -0.91%
CAC 40: 0.10%
FTSE MIB: 0.58%
IBEX 35: 0.30%
Stoxx 600: -0.50%
European stocks were little changed following the release of a slate of Eurozone and Asia data.
A report this morning from Sentix showed Eurozone investor confidence rose in March to the highest level since April 2011. The composite confidence index climbed to 13.9 this month from 13.3 in February, missing forecasts for a reading of 14.0.
Separately Italy's statistics office ISTAT revealed industrial production in the nation, excluding construction, grew by 1% month-on-month in January, its largest monthly increase in more than two years. The consensus estimate had been for an increase of 0.5%.
French industrial output fell 0.2% month-on-month in January, the country´s statistics office, INSEE said. Analysts had expected a rise of 0.3%. The previous month was revised to show a drop of 0.6% over the month instead of the 0.3% initially calculated.
Spain's industrial production was unchanged in January versus the prior month, according to the country´s statistics office, INE. Economists had predicted a rise of 1.8% year-on-year.
In other euro-area news, European finance ministers met in Brussels today to thrash out a deal on how to handle failing banks.
They said an agreement would be the final step in their effort to create a banking union that would stabilise the financial system.
"We all have to make an effort to reach a compromise," French Finance Minister Pierre Moscovici insisted upon his arrival for the meeting.
Chinese and Japanese data
China reported an unexpected trade deficit for February after exports slumped 18.1%, fuelling concerns that the world's second-largest economy is suffering a serious slowdown.
The country's National Bureau of Statistics also showed consumer prices rose at their slowest rate in 13 months in February as pork prices fell by their most in over a year. The consumer price index rose 2% in February from a year earlier, slightly missing analysts' expectations of 2.1%.
In Japan, the current account deficit hit a record 1.5trn yen (around £8.7bn) in January, which comes ahead of a planned tax increase on sales next month - a move that had been expected to prompt higher spending in the lead up to the release.
Japan's fourth quarter gross domestic product grew just 0.7% on an annualised basis, a downward revision from the initially projected 1% growth rate.
Fed needs to speed up tapering, says Plosser
Philadelphia Fed policymaker Plosser said the central bank may need to accelerate the pace of cuts to its bond buying programme in light of an improving economy.
Speaking in Paris, he said: "Reducing the pace of asset purchases in measured steps is moving in the right direction, but the pace may leave us well behind the curve if the economy continues to play out according to the FOMC forecasts."
Fed Chair Janet Yellen has indicated that the bank will continue to wind back quantitative easing until ending it all together later this year.
The Fed next meets on March 18th to 19th.
Ukraine tensions flare
Russian forces advanced in Ukraine's Crimea region today after rebuffing diplomacy efforts by Western leaders. The US estimates the Kremlin now has 20,000 troops confronting a smaller Ukrainian force in Crimea.
Crimeans will vote in a referendum on March 16th whether to join Russia.
Germany's Angela Merkel yesterday said the Moscow-backed referendum was illegal and violated Ukraine's constitution.
Mining stocks decline on China fears
A gauge of mining stocks declined, including Aurubis and Fresnillo, as a report showing weak Chinese exports pushed down the price of commodities.
Aryzta slid as the supplier of bakery products said its first-half margin on earnings before interest, taxes and amortisation (EBITA) remained at 12.3% for its food unit, missing analysts' estimates.
Rolls-Royce advanced on news Daimler is selling its holding in Rolls-Royce Power Systems.
Vodafone Group dropped following news the company could offer as much as €7.5bn for Grupo Corporativo Ono SA.
Hochtief rallied after Germany's largest builder offered AU$1.16bn to raise its stake in Leighton Holdings to as much as 74% from 59%.
The euro fell 0.01% to $1.3874.
Brent crude futures dipped $0.833 to $108.100 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks fall after Fed official hints at accelerated tapering US stocks declined after weak data in Asia and after Federal Reserve official Charles Plosser said the central bank may have to speed up stimulus tapering.
China reported an unexpected trade deficit for February after exports slumped 18.1%, fuelling concerns that the world's second-largest economy is suffering a serious slowdown.
Separately, the National Bureau of Statistics showed China's consumer prices rose at their slowest rate in 13 months in February as pork prices fell by their most in over a year. The consumer price index rose 2% in February from a year earlier, slightly missing analysts' expectations of 2.1%.
In Japan, fourth quarter gross domestic product grew just 0.7% on an annualised basis, a downward revision from the initially projected 1% growth rate.
The current account deficit hit a record 1.5trn yen (around £8.7bn) in January, which comes ahead of a planned tax increase on sales next month - a move that had been expected to prompt higher spending in the lead up to the release.
In the US, Philadelphia Fed policymaker Plosser said the central bank may need to accelerate the pace of cuts to its bond buying programme in light of an improving economy.
Speaking in Paris, he said: "Reducing the pace of asset purchases in measured steps is moving in the right direction, but the pace may leave us well behind the curve if the economy continues to play out according to the FOMC forecasts."
Fed Chair Janet Yellen has indicated that the bank will continue to wind back quantitative easing until ending it all together later this year.
The Fed next meets on March 18th to 19th.
Boeing, 3D Systems
Boeing Co. declined after a 777-200 plane disappeared with 239 passengers and crew during a Malaysia Airlines flight to Beijing on March 8th.
3D Systems and Stratasys slumped after Barron's magazine said stocks of the 3D printer makers were overvalued.
Regado Biosciences Inc. advanced after saying the US Food and Drug Administration has designated its REG1 anticoagulant drug for fast-track development.
McDonald dropped after reporting a 0.3% fall in global same-store sales in February, with a 1.4% drop in US sales and a 2.6% fall in Asia Pacific, Middle East and Africa offsetting a 0.6% increase in Europe.
Food group Chiquita Brands surged after the company announced a merger deal with UK-listed fruit supplier Fyffes worth $1.07bn. |
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| | Broker Tips | | Broker tips: Mondi, AB Foods, Centrica, Taylor Wimpey Citigroup has upgraded its rating for Mondi from 'neutral' to 'buy' and raised the target from 1,110p to 1,260p, saying it sees "another strong year ahead" for the paper and packaging group.
"Mondi continues to deliver strong earnings driven by improvements in costs, acquisitions and volume growth. 2013 [results] showed again why Mondi's impressive share price performance over the past five years has been justified," Citi said.
UBS has hiked its target for food and retail company Associated British Foods from 2,890p to 3,300p and reiterated its 'buy' stance, saying that the Primark business is "still at an early chapter".
"We believe AB Foods should trade on a higher multiple because of the structural growth story at Primark," said Analyst Alan Erskine. "Whilst the share price might pause for breath after such a strong run, we see further upside on a 12-month view," he said.
Credit Suisse has raised its recommendation for British Gas owner Centrica from 'underperform' to 'neutral' after the stock's recent underperformance.
"Centrica has been the worst performing utility across the past six months, falling circa 18% versus the pan-euro sector up 22%. Our 2014 earnings per share estimates have fallen circa 16% since the November profit warning. We think the risks are now reflected in the share price, and forecast an end to negative momentum."
Numis Securities has downgraded house builder Taylor Wimpey from 'add' to 'hold' but has lifted its estimates after the company's 2013 results and cash return revealed last month.
"In our view [the cash return potential for 2016] makes the shares look attractive relative to the other housebuilders engaging in cash returns, but on our preferred valuation metric the shares look broadly fair value. On this basis we increase our target to 130p but move to a 'hold' rating." | | |
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