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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 end higher after choppy session - FTSE ends session up 27.26 at 6,615.58
- Insurance slide, miners climb
- UK Q4 current account deficit bigger than expected
techMARK 2,762.30 -0.03%
FTSE 100 6,615.58 +0.41%
FTSE 250 16,181.71 -0.13%
The week ended on a positive note for UK stocks as they tracked gains seen Stateside and a positive performance amongst miners managed to offset a slump across the insurance sector.
The FTSE 100 closed up 27.26 points at 6,615.58, up 58.41 or 0.89% on the week.
It was something of a turbulent day for the UK market, which rose early on before dipping around lunchtime after it was widely reported that the Financial Conduct Authority (FCA) is planning to look into 30m insurance policies sold between the 1970s and 2000 on the back of concerns that they may have contained 'unfair' terms.
However, stocks recovered on the back of a strong start over in the US, which came after personal spending and incomes increased last month, while markets shrugged off a gauge of consumer confidence that marginally missed expectations.
Personal spending increased at a month-on-month rate of 0.3% in February, up from a revised 0.2% rise the month before and in line with analysts' forecasts. Personal incomes already rose by 0.3%, as expected.
Senior US Economist Paul Dales from Capital Economics said that the rise in expenditure was due to another large increase in medical spending: "This is because those people who are now covered by Medicaid for the first time or who have recently signed up for a private policy have started to consume medical services. With more people having enrolled this month, the effects of the Affordable Care Act will boost spending in March too."
Meanwhile, the final reading for the Thomson Reuters/University of Michigan index of consumer sentiment was revised to 80 in March, up from the initial estimate of 79.9 but under the previous month's reading of 81.6. This was the lowest level since November.
UK Q4 current account deficit comes in bigger than expected
Back in the UK, question marks grew over the durability of the UK economic recovery after the country's fourth quarter current account deficit came in much higher than expected.
The deficit between October and December was £22.4bn, the second largest deficit on record after an all-time high of £22.8bn in the third quarter, according to the Office for National Statistics (ONS). Economists had expected a deficit of about £14bn.
As expected, the ONS confirmed that the economy expanded at 0.7% in the fourth quarter, but 2013 annual GDP was revised down to 1.7% from the previously estimated 1.8%.
In other UK news, National Energy Action (NEA) warned that unless the UK government and devolved administrations take urgent action in stopping the cold-homes crisis, then targets to remove fuel poverty will be missed.
The UK Fuel Poverty Monitor claims that current government measures to tackle fuel poverty are "inadequate to mitigate the effect of rising energy costs and the impacts of the economic situation and changes to welfare benefits".
Insurers and miners at polar ends of index
Insurance groups were hit by the news the FCA news, which also prompted RBC Capital to lower its target on a number of stocks in the sector, including Resolution (from 400p to 390p), Standard Life (from 450p to 440p), and Aviva (from 500p to 495p).
Meanwhile, shares in mining stocks delivered a strong performance amid hopes of stimulus measures in China, which would lead to growth in demand for commodities. Glencore Xstrata, Fresnillo, Anglo American and BHP Billiton were all on the rise.
Randgold Resources was also a top performer after saying that gold production would top 1m ounces in 2014, compared with the 910,364 ounces produced last year.
Investec gave Smith & Nephew a lift after upping its rating on the stock from 'add' to 'buy' and hiking its target by a third. The broker said that the medical equipment maker is "beginning to look like a growth stock again". |
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FTSE 100 - Risers
Smith & Nephew (SN.) 921.50p +2.39%
Standard Chartered (STAN) 1,259.50p +2.23%
G4S (GFS) 237.90p +2.19%
Unilever (ULVR) 2,557.00p +2.08%
Rexam (REX) 490.10p +2.06%
Glencore Xstrata (GLEN) 313.25p +2.00%
Persimmon (PSN) 1,364.00p +1.79%
Royal Bank of Scotland Group (RBS) 307.20p +1.76%
Antofagasta (ANTO) 841.50p +1.69%
BP (BP.) 484.15p +1.64%
FTSE 100 - Fallers
Resolution Ltd. (RSL) 296.30p -7.12%
Legal & General Group (LGEN) 205.00p -3.48%
Aviva (AV.) 470.20p -2.75%
Prudential (PRU) 1,280.50p -2.62%
ITV (ITV) 189.40p -1.61%
Standard Life (SL.) 380.30p -1.55%
Mondi (MNDI) 1,026.00p -1.54%
BT Group (BT.A) 374.10p -1.53%
Admiral Group (ADM) 1,434.00p -1.44%
Lloyds Banking Group (LLOY) 74.34p -1.38%
FTSE 250 - Risers
Xaar (XAR) 885.00p +6.37%
Ocado Group (OCDO) 466.60p +4.48%
Balfour Beatty (BBY) 298.90p +4.44%
Just Retirement Group (JRG) 140.00p +4.01%
Greencore Group (GNC) 274.70p +3.08%
Bank of Georgia Holdings (BGEO) 2,467.00p +2.79%
African Barrick Gold (ABG) 247.40p +2.78%
Bellway (BWY) 1,676.00p +2.76%
Imagination Technologies Group (IMG) 194.90p +2.58%
Kier Group (KIE) 1,647.00p +2.55%
FTSE 250 - Fallers
Phoenix Group Holdings (DI) (PHNX) 652.00p -11.53%
Millennium & Copthorne Hotels (MLC) 551.00p -3.25%
888 Holdings (888) 147.70p -3.15%
Petra Diamonds Ltd.(DI) (PDL) 146.20p -3.11%
EnQuest (ENQ) 126.10p -3.07%
ICAP (IAP) 377.00p -3.04%
Man Group (EMG) 98.95p -2.90%
AL Noor Hospitals Group (ANH) 1,036.00p -2.81%
Northgate (NTG) 521.50p -2.52%
Centamin (DI) (CEY) 49.60p -2.36% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks end higher on rise in euro-area confidence - Eurozone economic confidence rises
- German inflation slows
- US consumer confidence climbs
- Ukraine in talks for first tranche of IMF aid
FTSE 100: 0.41%
DAX: 1.44%
CAC 40: 0.74%
FTSE MIB: 1.53%
IBEX 35: 1.27%
Stoxx 600: 0.71%
European stocks ended the week higher as better-than-expected Eurozone economic confidence data pointed to pick-up in the region's recovery.
The European Commission's sentiment index increased to 102.4 in March from 101.2 a month earlier, beating expectations of 101.4.
It is the strongest monthly gain in nearly five years and is likely to ease the pressure on the European Central Bank (ECB) ahead of its policy meeting next week.
The ECB has been urged to take greater measures to tackle a stagnant recovery amid falling consumer prices and high unemployment.
A report today which showed German inflation slowed in March could boost the case for further action by the ECB.
Consumer prices, calculated using a harmonised European Union method, was 0.9%, down from 1% in February, as expected.
US data
The University of Michigan's US consumer confidence index climbed to 80 in March from 79.9 in February, falling short of the 80.5 forecast.
US personal spending increased at a month-on-month rate of 0.3% in February, up from a revised 0.2% rise the month before and in line with analysts' forecasts. Personal incomes rose by 0.3%, as predicted.
Ukraine and IMF hold talks on aid
Ukraine's Finance Minister Oleksander Shlapak said the government was in talks with the International Monetary Fund (IMF) for the first tranche of a $14-18bn bailout package.
The first tranche will include $3bn under a deal, announced on Thursday, to help the heavily-indebted stabilise its economy after months of political turmoil.
The agreement comes amid Russia's annexation of Crimea from Ukraine.
Copper miners rise, insurers fall
A gauge of copper miners rose, including Aurubis and Glencore Xstrata, as the price of the metal rose on hopes China will introduce new stimulus measures.
Resolution and Aviva led insurers lower following report the UK regulator Financial Conduct Authority plans to conduct an investigation in whether charges levied on life-insurance policies were unfair on customers.
Pirelli & C. SpA gained after the Italian tyre maker reported 2013 earnings which beat analysts' estimates.
Intesa Sanpaolo advanced as Italy's second-biggest bank forecast dividend payouts of €1bn this year and €2bn next year.
Deutsche Wohnen climbed after the German residential landlord said annual profit jumped 68%.
The euro climbed 0.05% to $1.3747.
Brent crude futures rose $0.037 to $107.870 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks gain as consumer spending increases - Personal spending, incomes rise in line with estimates
- Uni of Michigan consumer sentiment misses forecasts
- BlackBerry gains after smaller-than-expected loss
Dow Jones: 0.87%
Nasdaq: 1.06%
S&P 500: 0.82%
US stocks rose strongly on Friday morning after personal spending and incomes increased last month, while markets shrugged off a gauge of consumer confidence that marginally missed expectations.
The Dow Jones Industrial Average was registering triple-digit gains early on, up 0.9%, the Nasdaq was 1.1% higher, while the S&P 500 rose 0.8%.
Personal spending increased at a month-on-month rate of 0.3% in February, up from a revised 0.2% rise the month before and in line with analysts' forecasts. Personal incomes already rose by 0.3%, as expected.
Senior US Economist Paul Dales from Capital Economics said that the rise in expenditure was due to another large increase in medical spending: "This is because those people who are now covered by Medicaid for the first time or who have recently signed up for a private policy have started to consume medical services. With more people having enrolled this month, the effects of the Affordable Care Act will boost spending in March too."
Dales estimated that annualised real consumption growth over the first quarter as a whole rose by just 1.5-2%, down from 3.3% in the fourth quarter of 2013. However, "a strengthening in jobs growth should allow it to accelerate in the second", he said.
The final reading for the Thomson Reuters/University of Michigan index of consumer sentiment was revised to 80 in March, up from the initial estimate of 79.9 but under the previous month's reading of 81.6. This was the lowest level since November.
BlackBerry
Struggling smartphone maker BlackBerry was making gains after the opening bell after its adjusted loss per share of eight cents in its fourth quarter came in much better than the 55 cents loss expected by analysts. Revenues, however, slumped from $2.68bn to $976m, worse than the Street's predictions.
Zynga edged higher after billionaire Steven Cohen raised his stake in the video game publisher to 5.3% from 2.2%.
Restoration Hardware rose after the home-furnishings retailer forecast quarterly earnings that surpassed analysts' forecasts.
Netflix was swinging between gains and losses following news that Amazon may begin advertising-supported streaming services. |
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| | Broker Tips | | easyJet shares to 'pause for breath', says Panmure Panmure Gordon has raised its earnings forecasts for easyJet after an 'encouraging' trading update from the budget airline this week, but has left its ‘hold’ rating and 1,800p target for the stock unchanged.
While it remains “hugely optimistic” about easyJet’s long-term prospects, the broker expects the shares to “pause for breath” in the near term.
easyJet on Wednesday improved guidance ahead of its half-year results in May and now expects the pre-tax loss to be £55-65m for the six months to March 31st, compared with the previous estimate of £70-90m.
Revenue per seat at constant currency is now estimated to have grown by 1.5% in the first half, compared with its earlier prediction of “very slightly up”. Expected cost per seat growth excluding fuel was also revised down.
Panmure said that due to “improved revenue numbers and with costs firmly under control”, it has upgraded its earnings per share forecasts for the full year ending September by 3.7% to 113.6p.
“Despite a likely increase in competition this summer, we have seen few signs of irrational behaviour of competitors, and we expect the revenue environment to remain relatively good,” the broker said.
“Increased yield management of allocated seating should in our view support modest yield improvements over the next couple of years. Our EPS forecasts have also benefited from the assumption of the lower tax rate, reflecting company guidance.”
The stock was down 0.35% at 1,705p by 11:28 on Friday. | | |
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