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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 finish in the red as miners, banks, Crimea drag - FTSE closes 16.98 points lower at 6,588.32
- Feb UK retail sales rise by more than expected
- US jobless claims fall more than expected
techMARK 2,763.04 -0.70%
FTSE 100 6,588.32 -0.26%
FTSE 250 16,202.17 -0.31%
Stocks ended Thursday's session broadly lower as both the banking and mining sectors weighed heavily and attentions returned to the situation surrounding Crimea.
The FTSE 100 closed 16.98 points lower at 6,588.32.
In the latest news out from Ukraine, it was announced today that the country will $27bn in aid following an agreement with the International Monetary Fund.
The financial lifeline follows Russia's annexation of Crimea from Ukraine, which prompted Western leaders to impose targeted sanctions against senior officials responsible for the destabilisation.
The IMF agreement is on a $14-18bn standby credit for Ukraine, in return for tough economic reforms that will unlock further aid from the European Union, the US and other lenders over a two-year period.
This latest development comes after US President Barack Obama denounced Russia's actions in Crimea.
Speaking in Brussels, Obama last night warned that the US would impose "more sanctions" on Russia if it continues to escalate the crisis in Ukraine following last week's annexation of Crimea. "If Russia stays on its current course the costs for the Russian economy will continue to grow," he said.
UK retail sales rise by more than expected in February
UK retail sales rose by more than expected last month, according to official out earlier today.
Sales volumes lifted 3.7% in February against the same month a year ago, the Office for National Statistics (ONS) said. That was better than economists' forecasts of 2.5%. Retail sales rose 1.7% against January, when they fell 2%, topping economists' hopes of 0.5%, the ONS said.
US jobless claims fall more than expected
US jobless claims dropped to their lowest levels in nearly four months last week, according to the Labor Department.
Initial claims for unemployment benefits fell by 10,000 to a seasonally-adjusted 311,000 in the seven days to March 22nd, from a revised 321,000 the week before, which was the lowest since November and surprised analysts who had expected claims to rise to 323,000.
The four-week moving average, often seen as a more reliable measure of underlying conditions in the labour market, fell by 9,5000 to 317,750. This was the "lowest reading since computer issues artificially lowered claims in September of last year", according to Analyst Cooper Howes from Barclays.
Aberdeen slides after target cut
Aberdeen Asset Management declined on the back of Credit Suisse's decision to cut its target on the stock from 470p to 415p, reiterating its 'neutral' rating.
SABMiller was also a notable faller, alongside fellow drinks giant Diageo. The former on Wednesday had its price target reduced by Nomura from 2,600p to 2,500p.
Engineering group Babcock was a heavy faller after agreeing to buy helicopter services provider Avincis for £920m. The company, which will also assume Avincis' net debt of £705m through a new debt facility of its own, will fund the purchase with a £1.1bn rights issue, though some analysts raised concerns with the price of the deal.
Miners were also out of favour as stocks tracked metal prices lower. Jefferies also dampened sentiment after cutting commodity forecasts and targets across the sector. Fresnillo, Glencore Xstrata and Randgold Resources were among the worst performers.
IG Group noted that UK banks were "shaken by President Obama's message to Vladimir Putin that tougher sanctions could be imposed on Russia".
"Even though UK banks have less exposure to Russian assets than Eurozone banks, they are feeling the pinch as a war of words could lead to frozen assets," it added.
Meanwhile, UK Chancellor George Osborne has been asked by the parliamentary treasury committee if he or other ministers put pressure on the Co-operative Group or Lloyds Banking Group over the sale of 632 Lloyds branches.
The Co-op was in talks with Lloyds to buy its branches but the deal was scrapped last year following the discovery of a £1.5bn capital shortfall at the Co-op's banking division. |
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FTSE 100 - Risers
Aberdeen Asset Management (ADN) 396.90p +2.48%
SABMiller (SAB) 2,992.50p +1.85%
British American Tobacco (BATS) 3,287.00p +1.61%
British Sky Broadcasting Group (BSY) 930.00p +1.53%
Diageo (DGE) 1,864.00p +1.47%
Royal Mail (RMG) 564.00p +1.08%
RSA Insurance Group (RSA) 88.65p +0.97%
Unilever (ULVR) 2,505.00p +0.93%
Whitbread (WTB) 4,252.00p +0.78%
BG Group (BG.) 1,111.00p +0.68%
FTSE 100 - Fallers
Babcock International Group (BAB) 1,275.00p -6.66%
Fresnillo (FRES) 837.50p -4.01%
Standard Life (SL.) 386.30p -3.42%
Mondi (MNDI) 1,042.00p -3.25%
Next (NXT) 6,745.00p -2.88%
Randgold Resources Ltd. (RRS) 4,486.00p -2.65%
Tullow Oil (TLW) 759.00p -2.32%
Group (VOD) 218.00p -2.31%
International Consolidated Airlines Group SA (CDI) (IAG) 413.00p -2.27%
Sage Group (SGE) 418.30p -2.11%
FTSE 250 - Risers
Cairn Energy (CNE) 173.30p +3.71%
Brewin Dolphin Holdings (BRW) 331.90p +3.40%
WH Smith (SMWH) 1,216.00p +2.96%
Micro Focus International (MCRO) 819.00p +2.89%
Man Group (EMG) 101.90p +2.88%
Evraz (EVR) 70.85p +2.38%
Laird (LRD) 304.80p +2.14%
EnQuest (ENQ) 130.10p +2.12%
Carphone Warehouse Group (CPW) 331.30p +2.10%
Dechra Pharmaceuticals (DPH) 672.50p +1.82%
FTSE 250 - Fallers
Afren (AFR) 143.00p -5.17%
Alent (ALNT) 305.20p -4.24%
Just Retirement Group (JRG) 134.60p -4.13%
888 Holdings (888) 152.50p -3.79%
ITE Group (ITE) 190.30p -3.25%
African Barrick Gold (ABG) 240.70p -3.06%
Telecity Group (TCY) 689.50p -2.96%
Ted Baker (TED) 2,176.00p -2.90%
Centamin (DI) (CEY) 50.80p -2.87%
RPS Group (RPS) 319.00p -2.45% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed following slate of economic data - UK retail sales rise
- US jobless claims fall
- US GDP revised higher
- Ukraine, Greek to receive financial aid
FTSE 100: -0.26%
DAX: 0.03%
CAC 40: -0.14%
FTSE MIB: 0.10%
IBEX 35: 0.57%
Stoxx 600: 0.14%
European stocks were little changed as investors weighed economic data in the UK and US.
UK retail sales rose by 3.7% in February against the same month a year ago, the Office for National Statistics (ONS) said. It beat economists' forecasts of a 2.5% gain and compared to a 4.4% year-on-year increase in January.
In the US, jobless claims dropped to their lowest levels in nearly four months last week, according to the Labor Department. Initial claims for unemployment benefits fell by 10,000 to a seasonally-adjusted 311,000 in the seven days to March 22nd, from a revised 321,000 the week before.
It was the lowest since November and surprised analysts who had expected claims to rise to 323,000.
Meanwhile, US gross domestic product growth in the fourth quarter was revised higher to an annualised rate of 2.6%, from the initial 2.4% estimate. However, the consensus estimate was for a revision to 2.7%.
US pending home sales declined 0.8% in February, falling short of expectations for a 0.2% increase. In January sales fell 0.2%.
Ukraine, Greece aid
Ukraine will secure $27bn in aid following an agreement with the International Monetary Fund IMF on Thursday.
The financial lifeline comes amid Russia's annexation of Crimea from Ukraine, which prompted Western leaders to enact targeted sanctions against senior officials responsible for the destabilisation.
Separately the IMF said it was in talks to give further aid to Greece. Officials familiar with the negotiations told Bloomberg the IMF is considering an aid payment of €3.6bn as its contribution to the next tranche.
The country is set to receive a commitment from euro-region authorities as soon as mid-April for a payment of €8.3bn.
Euro-area finance ministers will meet in Athens next week.
H&M, Cairn Energy
H&M declined as the European fashion retailer reported a rise in first quarter net income that missed market predictions.
Cairn Energy jumped after Goldman Sachs raised the oil explorer to 'buy' from 'neutral'.
Babcock International Group dropped as the engineering-services company agreed to buy private equity-owned Avincis for £920m to expand in helicopter servicing.
Deutsche Lufthansa slipped as Europe's second-largest airline cancelled one in three flights scheduled for today following a labour strike in Germany.
Marine Harvest rallied as Oslo-based company said the enterprise value of the farming operations on the Shetland and Orkney Islands is £122.5m.
The UK's Royal Bank of Scotland and Spain's Santander slumped after their US units failed the Federal Reserve's stress test.
Alstom retreated following reports the French maker of trains and power equipment is facing a US bribery case.
United Internet gained after the German provider of phone and internet services posted a rise in 2013 earnings before interest, taxes, depreciation and amortisation on an increase in sales.
The euro fell 0.26% to $1.3745.
Brent crude futures rose $0.530 to $107.600 per barrel, according the ICE. |
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| | US Market Report | | US open: Stocks flat after sell-off, Citi fails stress tests - Banks in focus as Fed reveals stress test results
- Jobless claims fall to four-month low, better than estimates
- US GDP revised higher, but under forecasts
Dow Jones: 0.04%
Nasdaq: 0.06%
S&P 500: 0.02%
US equities opened more or less flat on Thursday after some mixed economic data, as markets paused for breath following some heavy falls the previous session.
The banking sector was in focus today after five out of 30 lenders failed the Federal Reserve's stress tests, including Citigroup and the US units of European counterparts RBS, HSBC and Santander.
Markets suffered steep losses made on Wednesday after comments from President Barack Obama sparked a sell-off in afternoon trade as he warned that Russia faces further sanctions if it continues to take steps to further destabilise Ukraine.
The Dow Jones Industrial Average, Nasdaq and S&P 500 were all little changed in the opening hour of trade.
US jobless claims dropped to their lowest levels in nearly four months last week, according to the Labor Department. Initial claims for unemployment benefits fell by 10,000 to a seasonally-adjusted 311,000 in the seven days to March 22nd, from a revised 321,000 the week before.
This was the lowest since November and surprised analysts who had expected claims to rise to 323,000.
Meanwhile, US gross domestic product growth in the fourth quarter was revised higher to an annualised rate of 2.6%, from the initial 2.4% estimate. However, the consensus estimate was for a revision to 2.7%.
Banks in focus
Citi fell sharply after the opening bell as the Fed rejected the bank's capital plans to lift dividends and increase share buybacks. The central bank said that it had concerns about Citi's "overall reliability of Citigroup's capital planning process".
Other banks including JPMorgan Chase, Bank of America and Goldman Sachs managed to pass the stress tests.
Gaming group King Digital Entertainment extended losses after a disappointing stock-market debut on Wednesday in which the Candy Crush maker's shares dropped 15%. The stock was down a further 4% this morning.
The yield on a 10-year benchmark US Treasury was up one basis point at 2.70%.
West Texas Intermediate crude futures for May delivery were up 2.1% at $101.23 a barrel. |
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| | Broker Tips | | Broker tips: Miners, Babcock, Compass... Jefferies has lowered its earnings forecasts and targets across the UK-listed mining sector and cut its rating for Glencore Xstrata, recommending investors to stick with top picks Rio Tinto and BHP Billiton.
"Chinese demand growth for commodities is unlikely to accelerate without aggressive stimulus, and commodity prices should therefore remain rangebound near current levels," the broker said on Thursday.
Panmure Gordon has retained its 'hold' recommendation and 1,350p target for Babcock, highlighting the pros and cons of the engineering group's acquisition of helicopter services provider Avincis.
Analysts Mike Allen and Paul Jones said that the deal, which values Avincis at 14 times operating profits, is "clearly not cheap". They added: "This business is also quite different to Babcock's current model, with short-term synergies unlikely to be found easily and will take time to execute."
Investec has reiterated its 'buy' stance and 1,050p target for catering giant Compass, saying that the stock remains a "key sector pick" after its second-quarter trading update.
Meanwhile, Killik & Co believes Compass' profits will get tastier as it benefits from more outsourcing and growth in emerging markets. The broker, which retained its 'buy' recommendation on Compass, said the update was very reassuring and showed it was still trading well.
Credit Suisse expects a "tough start to the year" for asset manager Aberdeen and has reduced its target for the stock from 470p to 415p, keeping a 'neutral' rating.
The bank admitted that the shares – trading at 11 times earnings for the 2015 calendar year – are "not expensive" but sees a lack of catalysts for the share price in the near term.
UBS has lifted its target for housebuilder Bellway from 1,930p to 2,030p and maintained a 'buy' rating, saying that the valuation discount to others in the sector is too wide.
"Bellway trades on an 18% discount to the sector on a price-to-tangible net asset value basis and an 8% discount to the sector on a price-to-earnings basis. We think this discount is unwarranted," said analysts Gregor Kuglitsch and Elliott Miley. | | |
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