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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: Concerns over Ukraine and Russia send stocks lower - FTSE closes down 25.89 at 6,527.89
- Ukraine and China give lower sentiment
- UK construction output 1.8 per cent in January
techMARK 2,765.31 -0.77%
FTSE 100 6,527.89 -0.40%
FTSE 250 16,124.92 -0.38%
Ongoing concerns about Ukraine and China ensured a poor finish to the week for UK stocks.
The FTSE 100 ended the final session of the week 25.89 below the opening bell, and down 184.78 points on the week - its worst since mid-2013 - at 6,527.89.
However, Capital Economics commented that, "given the twin threats from worries about a 'hard landing' in China and the crisis in Ukraine, it is perhaps surprising that global equities have not already fallen more than they have".
Speaking this afternoon, Russia's Prime Minister Sergei Lavrov said his country has no intention of putting "boots on the ground" in eastern Ukraine. These remarks lifted the main Wall Street benchmarks into the blue, but came too late for the Footsie, which had already finished trading.
His comments came as Russia's foreign ministry warned it could intervene in Ukraine to protect lives after at least one person died in clashes. A pro-Kiev demonstrator was stabbed to death and dozens of people were injured on Thursday following violent protests in the Ukrainian city of Donetsk.
Russia's foreign ministry said it showed the "leadership in Kiev does not control the situation in the country".
"Russia is conscious of its responsibility for the lives of compatriots and citizens in Ukraine and reserves the right to take these people under its protection," it added.
Russia has accused right-wing protesters of starting the violence.
The negotiations come ahead of a referendum in Crimea on Sunday to vote on whether the region stays in Ukraine or joins Russia.
Capital Economics added: "We think that markets would be right to be sanguine about China's economic slowdown and that neither Russia nor the West will allow events in the Crimean peninsula to spiral out of control. Nonetheless, there is ample scope for the crisis in Ukraine, in particular, to undermine sentiment further in the coming weeks."
Meanwhile, over in the US, the University of Michigan's preliminary reading on consumer confidence slipped to 79.9 in March, from 81.6 in the month before. The consensus estimate had been for a reading of 82.
In other news, producer prices fell by 0.1% month-on-month in February after a rise of 0.2% in the month before consensus: 0.2%.
UK construction output bounces back further in January
UK construction output grew by 1.8% month-on-month to reach £170m in January and 5.4% over the year, according to the Office for National Statistics.
That follows a 2% monthly increase in December and shows that the surprise 4.1% fall seen in November was just a "temporary blip", Dr Howard Archer, Chief UK and European economist at IHS Global Insight said.
UK trade deficit widens by more than expected in January
The British trade deficit in January widened by more than economists expected, casting further doubt over UK government efforts to re-balance the country's economy.
The deficit on goods and services rose to an estimated £2.6bn in January, against a deficit of £700m in December, according to data from the Office for National Statistics.
Economist Samuel Tombs at Capital Economics said January's deficit of £2.6bn was bigger than the fourth quarter's average of £1.8bn and 2013's average of £2.2bn, which he said signalled there was still no underlying improvement in the UK's trade position.
In other macro news, the Bank of England today noted that some of its market contacts see a risk of the pound falling due to the UK's current account deficit.
In the BoE's Quarterly Bulletin, the central bank said: "Some commentators suggested that there was a risk of sterling depreciation due to the UK's sizeable current account deficit.
"The views of contacts on this were mixed. Some believed that market participants typically do not enter speculative trades on the basis of developed-economy current account positions, while others thought that markets had begun to look at such data more closely."
Supermarkets recover after Morrison-inspired sell-off
Supermarket chains J Sainsbury and Tesco were bouncing back from Thursday's losses which came after disappointing profit guidance and a shake-up at sector peer WM Morrison, which reignited concerns about the rising threat from discount grocery chains.
A jump in the price of gold to a six-month high helped push Fresnillo and Randgold into positive territory today. The climb was being driven by events in Ukraine, as tension mounted over its between the troubled country and neighbouring Russia.
IMI also gained after Societe Generale increased its target from 1,530p to 1,690p, whilst upgrading the stock to 'buy'.
Meanwhile, IAG was in the red following the news it had agreed a pay deal with ground staff at its Spanish arm, Iberia, whereby pay will be cut by 7% and frozen until 2015. The company also announced that an additional 4% pay reduction will be eliminated once productivity measures are implemented.
On the second tier, Spirent Communications was higher on reports it has launched a new piece of technology which is used to address the ultra-high bandwidth requirements of modern communication networks.
Ocado continued to fall following this week's disappointing results, which came on the back of a poor set of full-year figures from partner Morrison.
Shares of Boohoo.com were trading at 73.5p towards the end of the day following their stock market debut, well above their initial offer price of 50p, valuing the online fashion retailer at £807m. |
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FTSE 100 - Risers
Fresnillo (FRES) 925.50p +2.89%
Sainsbury (J) (SBRY) 313.60p +2.85%
IMI (IMI) 1,456.00p +2.75%
Rolls-Royce Holdings (RR.) 1,033.00p +2.28%
Tate & Lyle (TATE) 635.00p +1.76%
Tesco (TSCO) 303.70p +1.66%
British Sky Broadcasting Group (BSY) 927.50p +1.42%
Morrison (Wm) Supermarkets (MRW) 208.00p +1.36%
Experian (EXPN) 1,045.00p +1.26%
SABMiller (SAB) 2,803.00p +0.86%
FTSE 100 - Fallers
Aberdeen Asset Management (ADN) 365.00p -3.11%
International Consolidated Airlines Group SA (CDI) (IAG) 421.30p -2.68%
Glencore Xstrata (GLEN) 297.00p -2.53%
Coca-Cola HBC AG (CDI) (CCH) 1,433.00p -2.45%
BT Group (BT.A) 389.00p -2.24%
Prudential (PRU) 1,346.00p -2.04%
Barclays (BARC) 231.15p -1.91%
Aviva (AV.) 507.00p -1.74%
Hargreaves Lansdown (HL.) 1,294.00p -1.67%
AstraZeneca (AZN) 3,913.00p -1.66%
FTSE 250 - Risers
Rank Group (RNK) 144.00p +7.87%
Spirent Communications (SPT) 100.50p +3.50%
Kenmare Resources (KMR) 13.60p +3.42%
Savills (SVS) 604.00p +3.34%
esure Group (ESUR) 273.30p +2.94%
Hansteen Holdings (HSTN) 108.00p +2.86%
Hellermanntyton Group (HTY) 324.50p +2.53%
Telecom Plus (TEP) 1,843.00p +2.33%
Berkeley Group Holdings (The) (BKG) 2,642.00p +2.21%
Jardine Lloyd Thompson Group (JLT) 1,066.00p +2.21%
FTSE 250 - Fallers
Bank of Georgia Holdings (BGEO) 2,193.00p -7.27%
Pace (PIC) 460.10p -4.84%
Man Group (EMG) 101.70p -4.06%
Greencore Group (GNC) 267.60p -3.98%
Ocado Group (OCDO) 483.60p -3.76%
Home Retail Group (HOME) 208.40p -3.25%
ICAP (IAP) 391.30p -3.24%
Close Brothers Group (CBG) 1,407.00p -2.90%
Regus (RGU) 215.50p -2.84%
Evraz (EVR) 54.40p -2.60% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed as US and Russia discuss Ukraine crisis - US and Russia meet in London for Ukraine talks
- Economists downgrade China growth forecasts
- Eurozone employment rises
- US consumer confidence falls
FTSE 100: -0.40%
DAX: 0.43%
CAC 40: -0.80%
FTSE MIB: -1.19%
IBEX 35: -1.39%
Stoxx 600: -0.70%
European stocks were little changed as investors weighed economic data and awaited a referendum in Ukraine's Crimea region.
US Secretary of State John Kerry met with Russian foreign minister Sergei Lavrov for talks in London ahead of a Sunday vote on whether to annex Crimea from Ukraine.
President Vladimir Putin comment on the referendum in Crimea after the results are announced, Interfax reported.
He also warned that the referendum could prompt concerted US and European Union sanctions as Russia stepped up its military presence in Ukraine.
Russia's Prime Minister Sergei Lavrov, however, this afternoon said his country has no intention of putting "boots on the ground" in Eastern Ukraine.
Meanwhile, weighing on stocks today was the aftermath of weak Chinese data this week, including factory and retail reports, which prompted economists from Bank of America, JP Morgan and Nomura to lower their forecasts.
"Given the twin threats from worries about a "hard landing" in China and the crisis in Ukraine, it is perhaps surprising that global equities have not already fallen more than they have," said Capital Economics.
"We think that markets would be right to be sanguine about China's economic slowdown and that neither Russia nor the West will allow events in the Crimean peninsula to spiral out of control. Nonetheless, there is ample scope for the crisis in Ukraine, in particular, to undermine sentiment further in the coming weeks."
Eurozone employment
Eurozone employment increased by 0.1% quarter-on-quarter and declined 0.5% year-on-year in the last three months of 2013, Eurostat said.
German inflation last month climbed 0.5% on the month and 1.2% on the year, federal statistics office, Destatis, said, confirming preliminary estimates published in late February.
In the US, the Thomson Reuters/University of Michigan's preliminary reading on consumer sentiment in the month of March fell to 79.9 from 81.6 in February, surprising analysts who had expected a rise to 82.
The Federal Reserve has been monitoring economic data ahead of next week's policy meeting, when the central bank is widely expected to scale back monetary stimulus.
Pandora edges lower
Pandora fell after a number of funds who invested in the Danish maker of charm bracelets agreed to sell a stake worth 4.51bn kroner.
HeidelbergCement declined after Berenberg downgraded construction stocks, including the German company, to 'hold' from 'buy', citing share price rises over the past year. Holcim Ltd and Lafarge SA also slipped on the back of downgrades out of Berenberg.
Banca Monte dei Paschi di Siena SpA advanced following reports US private equity firm JC Flowers is considering buying a stake in Italy's third-biggest bank as a long-term investor.
Vivendi gained after confirming it is in talks to sell its SFR telecom unit to Altice, the owner of French cable group Numericable.
The euro rose 0.235% to $1.3916.
Brent crude futures advanced $0.977 to $108.450 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks edge higher but Ukraine fears limit upside - Ukraine concerns weigh on stocks ahead of referendum
- Consumer confidence misses forecasts
- Coach gains on M&A rumours
- Liberty Media drops Sirius XM bid
Dow Jones: 0.17%
Nasdaq: 0.15%
S&P 500: 0.20%
US stock markets opened tentatively on Friday following the worst sell-off in five weeks as investors turned cautious ahead of the weekend amid lingering concerns about the continuing crisis in Ukraine.
The S&P 500 dropped 1.2% to 1,846.34 on Thursday, turning negative for the year-to-date, while the Dow Jones Industrial Average fell 1.4%, with both registering their biggest declines since February 3rd.
Stocks edged higher this morning despite the University of Michigan's preliminary reading on consumer confidence slipping to 79.9 in March, down from 81.6 in the month before and under the consensus forecast of 82. The expectations sub-index fell to 69.4 from 72.7 (consensus: 73).
In other economic news, producer prices fell by 0.1% month-on-month in February after a rise of 0.2% in the month before (consensus: 0.2%).
Concerns over an economic slowdown in China were also dampening sentiment on global markets today as analysts from JPMorgan, Bank of America, UBS and Nomura moved to lower their growth forecasts for this year. The downgrades came after data yesterday showed that industrial production, retail sales and fixed asset investments growth all eased last month.
Ukraine
Geopolitical tensions in Ukraine have escalated on the back of reports that Moscow is stepping up its military presence on the country's borders ahead of the Crimea referendum on Sunday that could see the region vote to become part of the Russian Federation.
However, the US and Europe have warned Russia that "very serious" steps would be taken, including sanctions, if it attempts to annex Crimea given that the move would be unconstitutional.
Investors were keeping a close eye on a meeting between Secretary of State John Kerry and his Russian counterpart Sergei Lavrov in London today.
Coach gains on M&A rumours
Luxury handbag maker Coach Inc was making decent gains after the opening bell amid unconfirmed market chatter that the group could be susceptible to a takeover offer at around $57-59 a share, compared with last night's closing price of around $48.
Liberty Media surged after dropping plans to acquire the rest of satellite radio business Sirius XM it does not already own.
Retail firm Aeropostale fell 12% early on after reporting a worse-than-expected loss and a 16% fall in sales in the fourth quarter.
US yields flat, crude rises
US 10-year Treasury yields were flat at 2.65%.
Front month West Texas crude futures were up 0.57% at $98.76 a barrel on the NYMEX. |
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| | Broker Tips | | Broker tips: HSBC, BSkyB, Weir, Perform, Gulf Keystone Berenberg has maintained its 'buy' rating on global banking group HSBC, saying that its transformation has gone unrewarded by the market.
"We believe HSBC has transformed itself into a bank that is comparable to the one that outperformed its peers and the market between 1992 and 2003. This appears to have been ignored by the market, with HSBC trading at a 15-year relative low to the UK market and at a 10% valuation discount to the European banks, a 13-year low," the broker said.
UBS sees 'significant headroom for growth' at British Sky Broadcasting and identified a number of new opportunities for the broadband and pay-TV group. The bank reiterated its 'buy' recommendation and 1,100p target for the stock.
UBS believes that growth will be driven mainly by new products such as NowTV and Sky Go Extra. Operational gearing for a number of these products is "relatively high", the bank said. UBS also sees a "meaningful" opportunity in the company's new advertising product, Adsmart, and possibilities within mobile.
The outlook at industrial engineering firm Weir Group is 'fairly subdued', according to Investec, which has lowered its stance on stock from 'add' to 'sell'.
The broker admitted that downside to forecasts is now limited, but said that at current levels the stock is pricing in a strong recovery in oil and gas markets in 2015. "Yet for us, this is far from clear," it said.
Digital sports media firm Perform Group was trading with heavy losses on Friday after Credit Suisse downgraded the stock from 'outperform' to 'neutral'.
The bank has raised its target for the shares from 246p to 290p after the company's better-than-expected 2013 results reported last week. However, after a 50% rally in the share price since Perform's December pre-close trading update, it believes that the stock is now "fairly valued", trading at 27.3 times estimated earnings for 2014.
Canaccord Genuity has cut its rating for oil explorer Gulf Keystone Petroleum from 'hold' to 'sell' after an audit of its Shaikan project in Iraq found lower-than-expected reserves. The target has been nearly halved from 195p to just 100p.
The broker said that while Shaikan "remains the jewel" of GKP's portfolio, it looks "smaller and more complex than before and its other assets of Sheikh Adi, Akri Bijeel and Ber Bahr "provide only slender support to the resource figure". | | |
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