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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 lower after Yellen comments, budget impact - FTSE down 30.69 points, weighed by Yellen comments
- Mortgage lending falls six per cent
- Broker comment lifts SSE
techMARK 2,800.23 -0.66%
FTSE 100 6,542.44 -0.47%
FTSE 250 16,217.35 -0.74%
UK stocks finished in the red today as investors digested hawkish comments from Fed Chairwoman Janet Yellen, the impact of yesterday's Budget, and a fall in monthly mortgage lending.
The FTSE 100 closed down 30.69 points at 6,542.44, coming off a low of 6,494 this morning.
Yellen, speaking last night after the Federal Open Market Committee voted to taper its asset purchase programme by another $10bn a month to $55bn, signalled that the first rate hike could come six months after quantitative easing (QE) ends.
If the central bank continues to taper at the same rate, QE should come to an end in October or November, which means that interest rates could rise as soon as April or May. Ahead of this week's meeting, analysts had widely expected a rate hike to come towards the end of 2015.
While the unexpected hawkishness from the new Fed chair came as a surprise to many, the message delivered about the economy was upbeat, as policymakers lowered their forecasts for unemployment which is set to fall to between 6.1% and 6.3% by the year-end.
In other global news, US President Barack Obama announced sanctions against Russia over the crisis in Crimea.
Obama's remarks come after Russian President Vladimir Putin signed a treaty on Tuesday accepting Crimea as a sovereign state. It followed a referendum on Sunday which showed an overwhelming support for the region to leave Ukraine.
Obama said there would be visa bans and asset freezes in Russia and sanctions against senior officials of the country's government.
"In addition, we are today sanctioning a number of other individuals with substantial resources and influence who provide material support to the Russian leadership, as well as a bank that provides material support to these individuals," he said.
UK mortgage lending down 6% in February
Total gross mortgage lending decreased by 6% in February month-over-month to $15.2bn, according to the Council of Mortgage Lenders (CML).
Against the year-ago period, mortgage lending rose 43% from £10.6bn to its highest since February 2008.
Elsewhere, the Confederation of British Industry's total orders index for the three months to March rose to a balance of six points, from three in the month before, well above the historical average of -17.
The consensus estimate was for a reading of five. The business lobby described the reading as "robust".
SSE rises on rating upgrade
Electricity provider SSE was in the top spot after receiving a ratings upgrade from Morgan Stanley.
Next was on the up after the High Street retailer reported annual profit that met the top end of its guidance, driven by growth in online sales. The company achieved an 11.8% rise in pre-tax profit to £695m in the year through January 2014, reaching the upper range of the company's forecast of £684m-700m.
Standard Life climbed after Deutsche Bank retained its 'buy' rating.
Meanwhile, Resolution dropped after saying that changes in the Budget have a "negative implication" for new business flows in the individual annuity market.
Hargreaves Lansdown shares retreated from yesterday's highs when they were at the top of the leaderboard.
Paper and packaging giant Mondi dragged its sector lower, as the shares fell 2.5% in what was most likely profit taking after the company received positive analyst support after results in late February and strong long-term run in the stock. |
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FTSE 100 - Risers
SSE (SSE) 1,486.00p +3.34%
Standard Life (SL.) 362.70p +2.46%
Next (NXT) 6,730.00p +2.28%
Tullow Oil (TLW) 780.00p +1.76%
Anglo American (AAL) 1,411.50p +1.66%
ARM Holdings (ARM) 990.50p +1.43%
Royal Bank of Scotland Group (RBS) 305.30p +1.26%
Petrofac Ltd. (PFC) 1,393.00p +1.24%
Carnival (CCL) 2,450.00p +1.24%
Smiths Group (SMIN) 1,317.00p +1.23%
FTSE 100 - Fallers
Resolution Ltd. (RSL) 318.10p -5.04%
Hammerson (HMSO) 545.00p -3.63%
Hargreaves Lansdown (HL.) 1,455.00p -3.26%
British Land Co (BLND) 659.50p -2.37%
ITV (ITV) 197.50p -2.32%
International Consolidated Airlines Group SA (CDI) (IAG) 423.40p -2.10%
Land Securities Group (LAND) 1,037.00p -2.08%
Coca-Cola HBC AG (CDI) (CCH) 1,488.00p -1.98%
Mondi (MNDI) 1,051.00p -1.87%
BP (BP.) 468.25p -1.82%
FTSE 250 - Risers
Bank of Georgia Holdings (BGEO) 2,347.00p +5.96%
Diploma (DPLM) 775.00p +4.80%
Savills (SVS) 638.50p +3.65%
Imagination Technologies Group (IMG) 187.00p +3.49%
Ophir Energy (OPHR) 260.00p +3.30%
Kenmare Resources (KMR) 14.69p +3.16%
Cobham (COB) 307.80p +2.60%
Essar Energy (ESSR) 66.00p +2.33%
Henderson Group (HGG) 255.80p +2.28%
Premier Farnell (PFL) 225.00p +2.27%
FTSE 250 - Fallers
Partnership Assurance Group (PA.) 124.00p -13.29%
Hellermanntyton Group (HTY) 307.00p -4.95%
Perform Group (PER) 248.00p -4.62%
Intu Properties (INTU) 308.30p -4.61%
Xaar (XAR) 825.00p -4.51%
Ladbrokes (LAD) 134.10p -4.49%
Tullett Prebon (TLPR) 284.60p -3.95%
PZ Cussons (PZC) 347.40p -3.85%
Booker Group (BOK) 160.10p -3.26%
Bovis Homes Group (BVS) 875.00p -3.21% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed as US unveils sanctions against Russia - Obama announces sanctions against Russia
- Fed's Yellen indicates interest rate increase
- US jobless claims rise, existing home sales fall
- Spanish bond yields hit pre-crisis lows
FTSE 100: -0.47%
DAX: 0.21%
CAC 40: 0.46%
FTSE MIB: 0.56%
IBEX 35: -0.13%
Stoxx 600: 0.01%
European stocks ended the session mixed as US President Barack Obama announced sanctions against Russia over the crisis in Crimea.
Obama's remarks come after Russian President Vladimir Putin signed a treaty on Tuesday accepting Crimea as a sovereign state. It followed a referendum on Sunday which showed an overwhelming support for the region to leave Ukraine.
Obama said there would be visa bans and asset freezes in Russia and sanctions against senior officials of the country's government.
"In addition, we are today sanctioning a number of other individuals with substantial resources and influence who provide material support to the Russian leadership, as well as a bank that provides material support to these individuals," he said.
European Union leaders also gathered in Brussels today to consider imposing their own further sanctions on Moscow.
Meanwhile, the International Monetary Fund said negotiations with the Ukrainian authorities on a programme of economic reforms had made "significant progress".
"Our cooperation with the Ukrainian authorities has been excellent," the IMF's Nikolay Gueorguiev said in a statement today.
"The authorities' comprehensive reform program covers a wide range of issues and additional work needs to be completed to advance program discussions. The mission plans to conclude its work on March 25th."
US Fed and economic data
Federal Reserve Chair Janet Yellen has said interest rates would increase "in the order of around six months" after the central bank ends it ends quantitative easing. Analysts had widely expected a rate hike to come towards the end of 2015.
Yellen spoke after the Federal Open Market Committee (FOMC) voted to scale back its asset purchase programme by another $10bn a month to $55bn, its third staged reduction of stimulus, as expected by analysts.
Bond purchases should come to an end in October or November if the Fed continues to taper at the same rate at each meeting.
Today in the US was the release of weekly jobless claims and existing home sales.
Jobless claims rose by 5,000 to 320,000 in the week ended March 15th but came in below the consensus forecast of 322,000.
The Philadelphia Fed regional manufacturing index surged from -6.3 in February to 9.0 this month, well ahead of the 3.2 consensus forecast.
Meanwhile, existing-home sales fell by 0.4% to 4.6m in February, as expected by analysts, easing from the 5.1% drop the previous month.
Spanish and French auctions
Spain's borrowing costs over five and 15 years fell to their lowest at an auction since the economic crisis began.
The Treasury sold €5bn of three year bonds on Thursday, the top end of the target range of between €4bn and €5bn. Spain has now raised a third of the debt it aimed to sell in the whole of 2014.
France allotted €3.7bn in May 2019 at an average yield of 1.06%, in line with a previous auction on Feb. 20. The Treasury also sold debt due in 2016 and 2017 as well as €1.5bn of inflation-linked bonds maturing between 2018 and 2024.
Both auctions seemed to have gone off without a hitch.
Intu Properties, GSK
Intu Properties retreated as the UK's largest shopping-mall owner agreed to buy three retail centres from Westfield Group for £867.8m.
GlaxoSmithKline declined after saying its experimental lung-cancer drug failed to meet its objectives in a clinical study.
Munich Re gained after the reinsurer announced it will buy back shares worth €1bn before its 2015 shareholder meeting.
Rheinmetall slumped after Germany's Economy and Energy Minister Sigmar Gabriel stopped the company from building a military training centre in Russia's Volga region, Focus magazine reported.
Gaming companies Ladbrokes and William Hill edged lower after UK Chancellor George Osborne raised the duty on in-store gaming machines.
Lanxess jumped as the chemical maker projected first-quarter earnings that was higher than analysts had expected.
Next advanced as the fashion retailer reported a rise in annual pre-tax profit that beat analysts' estimates.
The euro fell 0.33% to $1.3787.
Brent crude futures rose $0.264 to $106.120 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks erase early losses after upbeat data - Jobless claims, Philly Fed, Leading Indicators beat forecasts
- Existing-home sales fall 0.4 per cent, as expected
- Rate hike to come six months after QE ends, says Yellen
Dow Jones: 0.38%
Nasdaq: 0.32%
S&P 500: 0.32%
US stocks pushed into positive territory on Thursday after a string of better-than-expected economic data while investors continued to focus on hawkish comments from Federal Reserve Chair Janet Yellen.
After an initial fall after the opening bell, the Dow Jones Industrial Average, Nasdaq and S&P 500 were registering gains of around 0.3-0.4% by 10:15 in New York.
Markets had dropped sharply the previous session after Yellen signalled at a press conference that interest rates could rise sooner than expected following the Fed's decision to taper asset purchases by $10bn a month. She said that the first rate hike could come "around six months" after quantitative easing (QE) ends.
If the central bank continues to taper at the same rate, QE should come to an end in October or November, which means that interest rates could rise as soon as April or May. Ahead of this week's meeting, analysts had widely expected a rate hike to come towards the end of 2015.
Explaining Wednesday's losses on Wall Street, Senior Sales Trader Toby Morris from CMC Markets said: "Having been purposefully opaque with regards to guidance on rates previously, offering a timescale seems to have given the market a dose of reality at precisely the wrong time, having been fragile over the last few weeks already."
Economic data beats forecasts
Jobless claims rose by 5,000 to 320,000 in the week ended March 15th but came in below the consensus forecast of 322,000.
The Philadelphia Fed regional manufacturing index surged from -6.3 in February to 9.0 this month, well ahead of the 3.2 consensus forecast.
The Leading Indicators Index, a composite index of 10 economic indicators, increased by 0.5% in February, up from 0.3% previously and above the 0.2% rise expected.
Meanwhile, existing-home sales fell by 0.4% to 4.6m in February, as expected by analysts, easing from the 5.1% drop the previous month.
Lennar, Walter Energy, Guess
Homebuilder Lennar was subdued despite beating expectations with its first-quarter results. Chief Executive Stuart Miller said he is "optimistic that the housing market is continuing to recover, and that the fundamental drivers of that recovery remain intact".
Coal producer Walter Energy fell sharply after announcing a refinancing. Standard & Poor's kept a 'negative outlook' on the company's credit rating, reflecting its prediction that "operating results and credit measures will be weak for at least the next 12 months because of continued difficult coal market conditions that have pressured metallurgical (met) coal prices".
Fashion retailer Guess was also a heavy faller after its guidance for the first quarter and full year failed to meet analysts' forecasts. |
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| | Broker Tips | | Broker tips: RBS, GlaxoSmithKline, Bookmakers Investec has raised its rating for UK banking group Royal Bank of Scotland from 'sell' to 'hold' following the recent slump in its share price, but continues to recommend investors to avoid the stock.
With the stock now trading at just 0.8 times tangible net asset value (tNAV), compared with a then-premium multiple of 1.0 in February, the broker has upgraded its rating. "However, why own RBS when profitable, defensive and dividend-rich Barclays ('buy') trades on 0.8 times [tNAV] too?"
Panmure Gordon has retained a 'hold' recommendation on shares of GlaxoSmithKline after the pharmaceuticals group reported "another disappointment" for its therapeutic cancer vaccine, MAGE-A3.
"MAGE-A3 is a therapeutic cancer vaccine, the holy grail of the industry, but was identified as very high risk because it is an unproven area. Therefore, we believe consensus forecasts for this product are heavily risk adjusted and do not expect today's news to trigger major downgrades. Rather we view today's events as a missed upgrading opportunity."
Changes to gaming machine taxes and horse racing betting levies announced in the Budget have prompted Credit Suisse to cut its forecasts and targets for London-listed bookies Ladbrokes, William Hill and Paddy Power.
The bank said that Ladbrokes, rated 'underperform', has the highest exposure to UK retail and will be most affected by these changes. It reduced its earnings estimates by 14% and 17% in 2015 and 2016, respectively, leading to a cut in the target from 155p to 130p. | | |
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