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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: FTSE ends marginally lower on Ukraine fears, retail figures - FTSE closes down 3.93 at 6,685.52
- Ukraine tensions cause further concern
- UK retail sales disappoint
- Industrial production rises
techMARK 2,851.60 +0.23%
FTSE 100 6,685.52 -0.06%
FTSE 250 16,481.45 +0.18%
UK stocks eased back from earlier losses to end today's session only just in the red, amid concerns over Ukraine, banking woes, and poor UK retail sales data.
The FTSE 100 closed down 3.93 points at 6,685.52.
Geopolitical tensions were ongoing today after Ukraine boosted its defence forces ahead of a meeting between its Prime Minister Arseniy Yatsenyuk and US President Barack Obama taking place tomorrow.
US Secretary of State John Kerry has rejected offers to negotiate with Russian President Vladimir Putin until Moscow considers US proposals on the turmoil in Ukraine.
Russia is reportedly drafting a counter offer to a US proposal to "de-escalate" the crisis. Washington has demanded that Moscow pull back its troops from Crimea and end attempts to annex the region. Kerry said Moscow's military intervention in Crimea had made any negotiations extremely difficult.
Carney says BoE will never fully unwind QE
In their testimony before the Treasury Select Committee members of the Monetary Policy Committee apparently implicitly indicated that the central bank may never fully unwind its quantitative easing or, at least, that it might be a very drawn out affair.
The governor said that he did not expect the BoE to begin scaling back QE until there had been "several adjustments" in interest rates, signalling that it could take years.
February UK retail sales shift into reverse gear
In other macro news, British retail sales went into reverse last month, casting fresh doubt over consumers' ability to keep driving the economic recovery.
Like-for-like sales in February fell 1% versus the same month a year ago, when they rose 2.7%, according to monthly figures from the British Retail Consortium (BRC) and accountants KPMG.
Total sales rose 0.7% against a 4.4% increase in February last year and online non-food sales rose 14.3%.
Meanwhile, UK industrial production expanded by 0.1% month-on-month (2.9% year-on-year) during January, according to the Office for National Statistics (ONS).
The consensus estimate had been for a reading of 0.2% (2.9% on year).
Sports Direct in top spot as banks head lower
Sports Direct was the day's top riser, gaining strongly after shareholders approved a huge £65m bonus plan for founder Mike Ashley. The payout is dependent on the company achieving earnings before interest, tax, depreciation and amortisation (EBITDA) of £330m in 2014 and £410m in 2015 - the latter being higher than the figures currently predicted by analysts.
International Consolidated Airlines Group climbed after Jefferies raised its target from 410p to 510p and retained a 'buy' recommendation.
Aviva continued higher after last week's upbeat results, with today's gains driven by RBC Capital, which upped its target from 400p to 550p and upgraded the stock to 'neutral', and Nomura, which increased its target from 489p to 625p and reiterated a 'buy' recommendation.
Meanhile, banking stocks including Barclays and RBS were under the weather as alleged forex manipulation continued to make headlines today amid a Treasury Select Committee grilling of Bank of England Governor Mark Carney.
Johnson Matthey fell after Liberum Capital reduced its target from 3,500p to 3,340p, downgrading the stock to 'hold'.
Looking ahead to Wednesday
Strong investor interest in Poundland means the British discount chain is likely to be valued near the top end of its flotation price range tomorrow.
Institutional investors are thought to have been queuing up to buy shares in the group, which has about 500 stores in the UK selling items for £1.
Economic announcements due out include US Crude Oil Inventories, MBA Mortgage Applications, the Treasury Budget Statement and EU Industrial Production. |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed on German trade data, Ukraine crisis - German imports and exports rise
- Russia rebuffs US proposal to end Ukraine crisis
- BoE indicates QE exit to be drawn out affair
- EU finance ministers work on bank deal
FTSE 100: -0.06%
DAX: 0.46%
CAC 40: -0.48%
FTSE MIB: 0.39%
IBEX 35: -0.31%
Stoxx 600: 0.03%
European stocks ended the session mixed as German imports and exports rose and as Ukraine tensions persisted.
German exports jumped 2.2% in January, well above the 1.5% forecast, the Federal Statistics Office revealed today. Overseas shipments had fallen 1% in December. Imports advanced 4.1% in January, compared to a drop of 1.4% the previous month and the consensus estimate of a 1.4% increase.
As a result, the seasonally-adjusted trade surplus narrowed to €17.2bn from a revised €18.3bn in December.
Meanwhile, markets remained jittery over tensions between the Ukraine and Russia.
US Secretary of State John Kerry has rejected offers to talk with Russian President Vladimir Putin until Moscow considers US proposals to end the turmoil in Ukraine.
Russia is reportedly drafting a counter offer to a US proposal to "de-escalate" the crisis. Washington has demanded that Moscow pull back its troops from Crimea and end attempts to annex the region.
BoE sees no end in sight for QE
In their testimony before the Treasury Select Committee members of the Monetary Policy Committee apparently implicitly indicated that the central bank may never fully unwind its quantitative easing or, at least, that it might be a very drawn out affair.
The Bank's £375bn monetary easing programme started five years ago during the height of the financial crisis.
Governor Mark Carney said he did not expect the BoE to begin scaling back QE until there had been "several adjustments" in interest rates, signalling that it could take years.
In other UK news, the Office for National Statistics (ONS) revealed industrial production expanded by 0.1% month-on-month and 2.9% year-on-year in January.
The consensus estimate had been for a reading of 0.2% (2.9% year-on-year).
Output from manufacturing rose by 0.4% over the month (3.3% year-on-year), as expected.
EU tackles bank-failure law
European Union finance ministers today claimed they made "good progress" on talks in Brussels to break a deadlock on a laws on failing banks in the euro-area.
Policymakers are working on a compromise deal on the Single Resolution Mechanism and a common fund to cover the cost of saving or closing banks.
However, German Finance Minister Wolfgang Schaeuble said today he sees little room to compromise with the European Parliament on the law.
The deadlock continues over how to make bank resolution decisions, how fast to create the new €55bn fund and how to ensure its liquidity.
ECB President Mario Draghi last week warned there would be severe consequences for the euro-area and its banking union should they fail to reach a deal before May's parliament elections.
Inchcape, Hannover
Inchcape surged after the car dealership delivered record annual results, driven by demand for luxury vehicles.
Hannover tumbled after the reinsurer reported a drop in fourth quarter earnings due to weakness in life and health reinsurance.
Geberit rallied after the maker of bathroom fittings and plumbing products said Christian Buhl will take over as Chief Executive from Albert Baehny at the beginning of 2015.
Galenica declined after the drugmaker said it forecasts 2014 profit to be at least at the same level as last year, below market estimates.
Close Brothers edged higher after the UK financial services company increased its interim payout to 16.5p, beating analysts' estimates.
African Barrick Gold slumped following reports that the company has started selling a 10% stake in its African unit.
The euro fell 0.13% to $1.3859.
Brent crude futures rose $0.074 to $108.160 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks lack direction amid Ukraine concerns - Ukraine fears limit upside for stocks
- Senate reaches deal on future of Fannie Mae, Freddie Mac
- Urban Outfitters falls on weather concerns
Dow Jones: -0.03%
Nasdaq: 0.09%
S&P 500: -0.03%
US stocks were trading broadly flat in early trading on Tuesday as investors focused on developments in Ukraine amid a lack of major economic data closer to home.
The S&P 500 was continuing to tread water after hitting another record high on Friday of 1,878.04. The benchmark index opened more or less unchanged this morning after finishing just 0.05% lower yesterday as market sentiment was dampened by weak export figures from China.
Geopolitical tensions, which weighed heavily on global equity markets last week, lingered today after Ukraine boosted its defence forces ahead of a meeting between its Prime Minister Arseniy Yatsenyuk and US President Barack Obama tomorrow.
US Secretary of State John Kerry has rejected offers to negotiate with Russian President Vladimir Putin until Moscow considers US proposals on the turmoil in Ukraine.
Russia is reportedly drafting a counter offer to a US proposal to "de-escalate" the crisis. Washington has demanded that Moscow pull back its troops from Crimea and end attempts to annex the region.
Kerry said Moscow's military intervention in Crimea had made any negotiations extremely difficult.
In other news, the NFIB's US small business optimism index for February fell to 91.4 from 94.1 a month earlier, missing analysts' estimates.
Fannie Mae, Freddie Mac
Shares in Fannie Mae and Freddie Mac were making gains on reports that a Senate bill draft to wind down the two federally controlled mortgage firms will be out in coming days.
"This agreement moves us closer to ending the five-year status quo and beginning the wind down of Fannie and Freddie, while protecting taxpayers with strong private capital, building the components for a stable secondary market," said Senator Mike Crapo from the Senate Banking Committee.
Fashion retailer Urban Outfitters declined as Chief Executive Richard Hayne said it expects poor weather to hurt sales and profit margins in the first quarter. The outlook came after the company beat earnings forecasts for the fourth quarter.
Sector peer JC Penney surged after Citigroup raised its recommendation on the stock to 'buy' from 'neutral', while department store Macy's rose after Wells Fargo lifted its rating from 'market perform' to 'outperform'.
FuelCell Energy advanced after reporting first quarter revenue that beat analysts' expectations. |
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| | Broker Tips | | Broker tips: IAG, African Barrick Gold, Foxtons, Fenner Jefferies has hiked its target for airline group IAG and retained its 'buy' rating, saying that the company 'continues to make encouraging, simultaneous progress' at British Airways, Iberia and Vueling.
The target for the stock has been raised from 410p to 510p, which is based on IAG trading on a 10% premium to the sector average, "justified by broad-based, ongoing restructuring progress". The stock currently trades in line with the average, Jefferies said.
Goldman Sachs believes that the sale of African Barrick Gold (ABG) shares by its parent company Barrick Gold could act as an overhang for the stock going forward and reduce the M&A upside currently built into the price. Barrick sold a 10% stake, lowering its holding to 63.9%.
"We believe some investors took the view that a with-premium offer for Barrick's entire 73% holding could be coming, which would automatically trigger a bid for the free-float on ABG due to London takeover panel rules."
Credit Suisse has lifted its target for London-focused estate agency chain Foxtons from 322p to 430p after upgrading its forecasts following the company's "impressive" fourth quarter. The bank maintained its 'outperform' rating on the stock.
"Foxtons is a structural growth story owing to its branch expansion program (another seven targeted for this year). We do not expect the London housing market to normalise within five years, owing to current high house price-to-income ratios."
Investec has lowered its target for Fenner from 380p to 375p and maintained a 'sell' recommendation, saying that the company took a "cautious" tone in its second-quarter update.
"We consider that the valuation is still too rich for a low-teens margin business with rising net debt and a recent history of downgrades, and a 5p cut to our […] target does not change our 'sell' stance." | | |
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