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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 hit by Ukraine concerns, G4S sinks - FTSE closes down 64.62 points at 6,620.90
- Banks, G4S drag, copper price boosts miners
- Minimum wage increased by 19p
techMARK 2,817.28 -1.20%
FTSE 100 6,620.90 -0.97%
FTSE 250 16,326.70 -0.94%
The City ended on a downbeat note today, as banks and G4S dragged, multiple big names went ex-dividend, and the situation in Ukraine rumbled on.
The FTSE 100 ended the day 64.62 points lower at 6,620.90 - a decline of 91.77 on the week.
As IG Group's Chris Beauchamp said: "Equity markets have come under pressure around the world as copper prices continue to fall following weak economic data from China. Although copper prices have bounced slightly today, the drop through three-year lows yesterday unnerved markets.
"Throw in some headlines about Russian movements in Crimea, and you have the recipe for a continuing sell-off."
Following data released earlier this week from China which revealed a surprise trade deficit in February as exports slumped, worries over credit conditions were ignited by reports of a possible second onshore debt default by another solar power firm in the country.
Investors are also looking ahead to data due tomorrow which is likely to show that Chinese industrial output growth eased slightly last month.
Ukraine also continued to be a focal point for markets today as Prime Minister Arseniy Yatsenyuk met with US President Barack Obama in Washington ahead of the looming Crimea referendum on March 16th on whether or not to split from Ukraine and join Russia. The G7 leaders have said they will not recognise the results of the referendum.
“What we’re seeing now is markets on the whole being driven by investor sentiment and as long as we don’t see anything positive to act as a distraction from Ukraine and China, sentiment is likely to remain low, as we’re seeing again today,” said Market Analyst Craig Erlam from Alpari.
Late in the afternoon Interfax reported that US Secretary of State John Kerry will meet his Russian counterpart in London, this Friday, to discuss the Ukrainian crisis.
Back in the UK...
As many as a quarter of payday lenders are expected to quit the business as regulators gear up to impose tighter rules on the market from the beginning of next month.
The Financial Conduct Authority FCA, which is due to take over as the UK's financial regulator on April 1st, has prioritised the much criticised short-term, high-interest lending market as one of the first things on its agenda.
In other news, minimum wage has been increased to £6.50, up 19p from its previous level.
G4S disappoints with 'extremely challenging year'
G4S failed to impress with its 2013 results after an 'extremely challenging year' which saw the security solutions provider swing to a statutory pre-tax loss of £170m, from a profit of £313m in 2012.
A number of heavyweight FTSE 100 stocks were lower after going ex-dividend, including Hammerson, Meggitt, British American Tobacco, and Standard Chartered.
Meanwhile, insurance giant Prudential was in positive territory after reporting a 17% rise in operating profit to £2.96m and a 15% increase in the full-year dividend after a “strong performance in 2013”.
Miners rose from earlier losses as metal prices bounced back, with copper in particular stabilising, prompting Antofagasta, Fresnillo, and Rio Tinto to all rise strongly. The price of copper climbed 0.68% to $2.97 a pound on the May futures contract.
In addition to weak Chinese data, the rising price was attributed to a tightening of supply levels, with Commerzbank saying it may have been oversold.
Shares of single price value general retailer Poundland performed well on their first morning of trade, with shares rising to their best level of the day, at 392p, by early afternoon.
Looking ahead to Thursday
Morrison Supermarkets will be in the spotlight tomorrow as the UK grocer is expected to report its lowest annual profit in five years.
The company may report a pre-tax profit of £783m in the year to February 2nd 2014, down 13% on the £901m it made a year earlier, according to the consensus forecast.
Also on the agenda will be a number of economic reports due out in the US, including Bloomberg consumer confidence, business inventories
continuing claims, import and export price indexes, initial jobless claims, manufacturing inventories, and retail sales. |
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| | FTSE 100 - Risers
Prudential (PRU) 1,398.00p +2.72%
Fresnillo (FRES) 900.00p +2.04%
Antofagasta (ANTO) 853.50p +1.61%
Vodafone Group (VOD) 229.55p +1.46%
William Hill (WMH) 381.40p +1.41%
Randgold Resources Ltd. (RRS) 4,927.00p +1.17%
Mondi (MNDI) 1,102.00p +1.01%
Kingfisher (KGF) 402.90p +0.98%
Morrison (Wm) Supermarkets (MRW) 233.00p +0.95%
TUI Travel (TT.) 432.20p +0.63%
FTSE 100 - Fallers
G4S (GFS) 232.50p -5.26%
Hammerson (HMSO) 549.50p -3.93%
Standard Chartered (STAN) 1,203.00p -3.68%
Meggitt (MGGT) 449.50p -3.56%
British American Tobacco (BATS) 3,218.00p -3.49%
Hargreaves Lansdown (HL.) 1,339.00p -3.32%
Land Securities Group (LAND) 1,032.00p -3.28%
Melrose Industries (MRO) 288.00p -3.10%
HSBC Holdings (HSBA) 599.20p -2.82%
Intertek Group (ITRK) 2,959.00p -2.57%
FTSE 250 - Risers
African Barrick Gold (ABG) 260.00p +4.00%
Hikma Pharmaceuticals (HIK) 1,527.00p +3.67%
Ferrexpo (FXPO) 144.20p +3.59%
Foxtons Group (FOXT) 384.50p +2.26%
Riverstone Energy Limited (RSE) 920.00p +2.22%
Restaurant Group (RTN) 697.50p +2.20%
Intermediate Capital Group (ICP) 437.10p +1.89%
Hiscox Ltd (HSX) 674.00p +1.74%
Interserve (IRV) 644.00p +1.42%
TalkTalk Telecom Group (TALK) 305.20p +1.26%
FTSE 250 - Fallers
Kenmare Resources (KMR) 13.55p -6.55%
Ocado Group (OCDO) 539.00p -5.77%
Spirent Communications (SPT) 100.10p -4.76%
Direct Line Insurance Group (DLG) 254.90p -4.60%
Oxford Instruments (OXIG) 1,330.00p -4.32%
Domino Printing Sciences (DNO) 763.00p -3.78%
Serco Group (SRP) 445.00p -3.76%
RPS Group (RPS) 329.10p -3.46%
St. Modwen Properties (SMP) 386.70p -3.33%
Savills (SVS) 595.00p -3.25% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks fall on Ukraine, China concerns - Ukraine crisis continues
- Copper prices under pressure as Chinese yuan falls
- Eurozone industrial output falls on the month
- Europe faces risk of stagnation, says Soros
FTSE 100: -0.97%
DAX: -1.28%
CAC 40: -1.00%
FTSE MIB: -0.25%
IBEX 35: -0.88%
Stoxx 600: -1.07%
European stocks slumped as the Group of Seven Nations called on Russia to end efforts to occupy Ukraine's Crimea region.
France, Germany, Italy, the US, Canada, the UK and Japan said they would take further action if Russia annexes Crimea following the plebiscite.
The G7 leaders also said they would not recognise the results of a referendum in Crimea this weekend on whether to split from Ukraine and join Russia.
The Russian Foreign Ministry said US aid to the acting government in Kiev would violate American law due to the ousting of Viktor Yanukovych as Ukraine’s president last month. Yatsenyuk was scheduled to meet with US President Barack Obama today.
Meanwhile, European Union member states have reportedly agreed the wording on sanctions on Russia, including travel bans and asset freezes on those responsible for violating the sovereignty of Ukraine. A draft document, obtained by Reuters, describes the measures to be taken against Moscow if it refused to withdraw troops from Crimea and begin talks with Western leaders to resolve the turmoil in Ukraine.
Markets were also jittery following data earlier this week from China which included a surprise trade deficit in February.
Investors were also looking ahead to data due tomorrow which is likely to show that Chinese industrial output growth eased slightly last month.
In parallel, forward contracts on the Chinese yuan have dropped to five-month lows. The unexpected depreciation in the currency places pressure on the use of commodities like copper as collateral for credit and financing costs for the lowest rated firms more generally.
Europe at risk of Japanese-style stagnation, says Soros
Europe is at risk of Japanese-style stagnation unless policymakers take more ‘radical’ action, according to US billionaire tycoon George Soros.
He said Europe’s immediate financial crisis has come to an end, but the region still faces a political crisis.
The bloc "may not survive 25 years of stagnation", Soros told Bloomberg.
"You have to go further with the integration. You have to solve the banking problem, because Europe is lagging behind the rest of the world in sorting out its banks."
In other Eurozone news, industrial production fell 0.2% on the month in January after a revised drop of 0.4% in December. Analysts expected a 0.5% increase. However, on a year-on-year basis, industrial production grew by 2.1%, beating the consensus forecast of a 1.9% increase and almost doubling the 1.2% rise registered in December.
Maersk, Tod's
Tod's declined after the Italian luxury-goods maker reported 2013 net that missed analysts’ estimates.
Maersk dropped after the estate of the shipping company’s former Chairman Maersk Mc-Kinney Moller, who died in 2012, sold a 1.4% stake to pay taxes.
Valeo edged lower after Bpifrance Financement SA sold about 1.98m shares in France’s second-biggest auto-parts maker to institutional investors for €200m.
G4S slumped after posting a drop in 2013 underlying earnings that fell short of market forecasts.
The euro rose 0.35% to $1.3909.
Brent crude futures fell $0.649 to $107.850 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks fall for third session amid China, Ukraine concerns - China, Ukraine concerns dampen sentiment
- Obama to meet with Yatsenyuk
- No major economic data on tap
Dow Jones: -0.29%
Nasdaq: -0.40%
S&P 500: -0.38%
US stocks were falling for a third straight day on Wednesday amid a lack of economic date, as investors showed concerns about the Chinese economy and tensions in Ukraine.
The S&P 500, which hit a record high of 1,878.04 on Friday, was trading 0.4% lower early on. The Dow Jones Industrial Average fell 0.3% while the Nasdaq lost 0.4%.
“What we’re seeing now is markets on the whole being driven by investor sentiment and as long as we don’t see anything positive to act as a distraction from Ukraine and China, sentiment is likely to remain low, as we’re seeing again today,” said Market Analyst Craig Erlam from Alpari.
The sole economic indicator scheduled for release today is the federal government’s Treasury statement for the month of February, due at 19:00.
China, Ukraine in focus
Following data earlier this week from China which revealed a surprise trade deficit in February as exports slumped, worries over credit conditions were ignited by reports of a possible second onshore debt default by another solar power firm in the country.
Investors were also looking ahead to data due tomorrow which is likely to show that Chinese industrial output growth eased slightly last month.
In parallel, forward contracts on the Chinese yuan have dropped to five-month lows. The unexpected depreciation in the currency places pressure on the use of commodities like copper as collateral for credit and financing costs for the lowest rated firms more generally.
Ukraine also continued to be a focal point for markets today as Prime Minister Arseniy Yatsenyuk meets with US President Barack Obama in Washington. The meeting comes ahead of the looming Crimea referendum on March 16th on whether or not to split from Ukraine and join Russia.
G7 leaders released a statement today, calling on Russia to “immediately halt” efforts to annex Crimea given that it is a violation of the UN Charter. They threatened to “take further action, individually and collectively” if Russia supports the referendum vote.
Express disappoints with Q4 results, 2014 outlook
Fashion retailer Express dropped sharply after the company admitted it has had an “extremely difficult” start to 2014 with falling in-store traffic leading to a decline in sales. The firm, which missed expectations with its fourth-quarter results, said that earnings would be between $1.03-1.23 a share this year, compared with the $1.59-a-share consensus forecast.
Fannie Mae and Freddie Mac were extending losses made yesterday after the government revealed plans to wind down the federally-controlled mortgage firms.
A number of heavyweight tech stocks were trading in the red today, including Apple, Google, Hewlett-Packard and Microsoft.
EPL Oil & Gas soared 29% after Energy XXI agreed to buy it for $1.5bn.
Front month West Texas crude futures were down by 1.4% at $98.67 a barrel in NYMEX trading.
10-year US Treasury yields were down four basis points at 2.73%. |
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| | Broker Tips | | Prudential, G4S, N Brown, African Barrick Gold Broker Hargreaves Lansdown highlighted Prudential's upbeat prospects after "sparkling" annual results and said the City regarded it as a 'strong buy'.
"Prudential's ability to capitalise on its financial strength and geographical diversity is self-evident and the market is equally buoyed by its prospects – the consensus has recently strengthened further and now comes in at a strong buy."
Analysts at Panmure Gordon have recommended investors ‘sell’ shares of security solutions firm G4S after the company’s annual results missed forecasts. The broker maintained its 200p target for the stock, which implies 18% downside from current levels.
“We anticipate further pressure on consensus estimates on the back of these results and maintain our cautious stance on the shares for now.”
UBS has downgraded its rating for N Brown, the online and catalogue home shopping group, from ‘neutral’ to ‘sell’, raising concerns with competition from some well-known High Street names.
The bank said that N Brown’s aim is to push clothes designed specifically for plus-sized customers into the larger end of mainstream clothing markets. “However, the size 16-18 women's clothing market is the stomping ground of some of the industry heavyweights, such as M&S, Next and Debenhams, and this move away from their differentiated, core niche increases the risk.”
The 17% share price slump of African Barrick Gold has created a buying opportunity, according to Canaccord Genuity on Wednesday. The broker kept a ‘buy’ recommendation and 315p target for ABG.
“We believe the magnitude of the price drop was exacerbated by the profit taking following the best performance among UK peers since mid-2013. The fall we think opens up a buying opportunity,” said analysts Dmitry Kalachev and Peter Mallin-Jones. | | |
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