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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: Strong performance by stocks as Ukraine tensions ease - Stocks soar as sentiment improves over Ukraine
- Fresnillo dives as Ashtead leads risers
- UK construction PMI below forecasts
techMARK 2,921.25 +2.42%
FTSE 100 6,823.77 +1.72%
FTSE 250 16,698.90 +1.98%
UK stocks soared back into positive territory in today's session, erasing all of yesterday's losses after Russian President Vladimir Putin ordered forces to return to their bases, calming the backlash from international leaders after Russia's increased military presence near the border of Ukraine.
The FTSE 100 ended the day up 115.42 points at 6,823.77, equal to a climb of 1.72%.
IG Group's Chris Beauchamp commented: "The strong open was solidified after a press conference from Russia's president Vladimir Putin, which he conducted in his own unique style, speaking without notes and looking like a man who was in control of events (and knew it).
"Mr Putin seemed to hint that he was determined to avoid a military confrontation, and his calming words did much to reassure jittery markets. Thankfully for all concerned, the situation seems calmer than it did 24 hours ago."
Speaking about the potential impact the crisis could have on the UK, Capital Economics assured traders that not even a major and sustained rise in commodity prices would pose a large risk for the economy, predicting that "only a major and sustained rise would cause UK inflation to rise much above the 2% target this year".
UK construction PMI slightly below forecasts
The UK's construction sector slipped in February, according to Markit, which reported that its purchasing managers' index (PMI) registered a reading of 62.6 last month, down from the 77-month high of 64.6 recorded in January, although this was only slightly below consensus forecasts.
This came on the back of further sharp increases in both employment and purchasing activity across the sector, despite the impact of recent wet weather on both output and new orders.
In other UK news, a government review into retail business rates may receive a greater shake-up after a report from Parliament's Business, Innovation and Skills Committee demanded the current system be completely reformed.
The committee, which is made up of a group of MPs, called for the Chancellor George Osborne's review to look at completely overhauling the current system and recommended that retail taxes should be based on sales instead of the value of a property.
These reforms would hit online retailers such as Amazon and ASOS, but benefit smaller High Street and local retailers.
Eurozone producer prices drop by 0.3% in January
The Eurozone's producer price index fell by 0.3% over the month (1.4% year-on-year) during January, according to Eurostat. The consensus estimate had been for a reading of -0.1% (-1.3% year-on-year).
"A marked dip in producer prices in January will do little to ease concerns over persistently very low Eurozone inflation and maintains pressure for ECB action at its March 6th policy meeting," wrote Dr Howard Archer, Chief European and UK Economist at IHS Global Insight.
Fresnillo hit by profit drop, Ashtead soars
The picture on the FTSE was almost the reverse image of yesterday, with Fresnillo and Randgold Resources firmly lower as they tracked metal prices back into the red. Fresnillo in particular was lower, sliding after it reported a worse-than-expected 64% drop in 2013 profits, reflecting a decline in gold production and a fall in precious metal prices.
Postal group Royal Mail was lower after Credit Suisse initiated coverage of the stock with an 'underperform' rating.
Meanwhile, equipment rental business Ashtead surged after reporting a bumper set of third-quarter earnings, driven by a strong performance from its two main divisions. The group now expects full-year results to come in ahead of previous expectations.
Jefferies upped its target from 1,000p to 1,050p, while Panmure Gordon raised its from 971p to 1,047p. Both brokers maintained a 'buy' recommendation.
William Hill benefitted from a target upgrade by Barclays, from 375p to 393p, while Canaccord Genuity shifted its own target from 408p to 412p. |
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FTSE 100 - Risers
Ashtead Group (AHT) 956.00p +13.00%
Coca-Cola HBC AG (CDI) (CCH) 1,519.00p +5.34%
William Hill (WMH) 397.00p +4.89%
Shire Plc (SHP) 3,439.00p +4.31%
International Consolidated Airlines Group SA (CDI) (IAG) 439.90p +4.04%
Rolls-Royce Holdings (RR.) 1,038.00p +3.80%
CRH (CRH) 1,777.00p +3.80%
Kingfisher (KGF) 403.70p +3.43%
easyJet (EZJ) 1,731.00p +3.34%
ITV (ITV) 202.20p +3.11%
FTSE 100 - Fallers
Fresnillo (FRES) 924.50p -4.69%
Randgold Resources Ltd. (RRS) 4,881.00p -1.45%
Lloyds Banking Group (LLOY) 80.90p -0.46%
Tullow Oil (TLW) 785.50p -0.38%
BP (BP.) 491.50p -0.28%
FTSE 250 - Risers
Perform Group (PER) 277.00p +19.14%
Pace (PIC) 447.60p +10.90%
Bank of Georgia Holdings (BGEO) 2,234.00p +8.98%
Spirent Communications (SPT) 110.80p +8.31%
CSR (CSR) 806.50p +7.61%
Entertainment One Limited (ETO) 360.00p +7.46%
Redrow (RDW) 344.10p +7.23%
Greencore Group (GNC) 278.00p +6.64%
BBA Aviation (BBA) 353.40p +6.22%
IP Group (IPO) 218.00p +5.77%
FTSE 250 - Fallers
Devro (DVO) 277.00p -9.18%
African Barrick Gold (ABG) 286.00p -3.15%
Regus (RGU) 225.00p -2.22%
Amlin (AML) 453.00p -2.03%
Xaar (XAR) 1,031.00p -1.62%
Henderson Group (HGG) 239.00p -1.04%
Carphone Warehouse Group (CPW) 348.60p -0.97%
888 Holdings (888) 154.20p -0.77%
Electra Private Equity (ELTA) 2,763.00p -0.43%
Essar Energy (ESSR) 67.00p -0.37% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Russia's Putin soothes markets on Ukraine crisis - Ukraine concerns ease after Putin speaks
- UK construction PMI falls
- ECB policy meeting nears
FTSE 100: 1.68%
DAX: 2.46%
CAC 40: 2.45%
FTSE MIB: 3.62%
IBEX 35: 2.44%
Stoxx 600: 2.05%
European markets breathed a sigh of relief today after Russian President Vladimir Putin said there was no need to send troops into Ukraine.
In his first public announcement since former Ukraine President Victor Yanukovich was ousted, Putin said military action would be a last resort.
However, he warned that Moscow is prepared to protect its citizens in Ukraine.
His comments lifted global stocks after a panic sell-off on Monday when it was reported that Russian forces had invaded Ukraine.
Diplomatic efforts are taking place to resolve the escalating crisis.
US Secretary of State John Kerry has arrived in the Ukrainian capital, Kiev, offering a $1bn package to help ease its looming financial crisis.
"The economies of Central and Eastern European are the most exposed to spillovers from the crisis in Ukraine, but as things stand the economic impact is likely to be limited," Capital Economics said.
"Admittedly, the crisis has the potential to escalate – the key risk for the region is that Russia could restrict its gas exports. However, so long as this doesn't happen, the prospects for the economic recovery will hinge much more on developments to the region's west, not to its east."
Eurozone producer prices drop by 0.3% in January
The Eurozone's producer price index fell by 0.3% over the month (1.4% year-on-year) during January, according to Eurostat. The consensus estimate had been for a reading of -0.1% (-1.3% year-on-year).
"A marked dip in producer prices in January will do little to ease concerns over persistently very low Eurozone inflation and maintains pressure for ECB action at its March 6th policy meeting," wrote Dr Howard Archer, Chief European and UK Economist at IHS Global Insight.
Elsewhere in Europe it was a relatively quiet day, thin on economic data releases, although Markit released its purchasing managers´ index (PMI) for the UK´s construction sector in February this morning. The PMI slipped to a reading of 62.6 in February, from the 77-month high of 64.6 in January.
ECB meeting looms
Investors are beginning to look ahead to the European Central Bank (ECB) meeting on Thursday amid speculation over the next policy move.
Low inflation and high unemployment have piled pressure on the ECB to enact greater measures but analysts are mixed on their forecasts.
"A marked dip in producer prices in January will do little to ease concerns over persistently very low Eurozone inflation and maintains pressure for ECB action at its March 6th policy meeting," according to Howard Archer, Chief European and UK economist at IHS Global Insight.
However, analysts at Bank of America Merrill Lynch believe that the ECB is likely to hold fire until later meetings: "In our view, the ECB is not ready to fire a 'bazooka' in this week's meeting, despite very low inflation and rising deflation risks.
"[…] Looking ahead, we believe that the ECB is not worried about deflationary risks yet. However, the ECB might be pushed into action at the April meeting, or this summer, if inflation falls further," they said.
Glencore, Beiersdorf
Glencore advanced after increasing its 2014 forecast for cost savings following the miner's merger with Xstrata last year.
Germany's Beiersdorf, the maker of Nivea skin care products, jumped after reporting a near-10% rise in 2013 profit.
Ashtead Group gained after saying full-year profit will exceed the company's previous projections.
Bank of Ireland fell on reports billionaire investor Wilbur Ross and Fairfax Financial Holdings have started to sell a 6.4% stake in the lender at 32.5 cents to 33.3 cents per share.
Fresnillo declined after the miner reported a drop in annual profit due to weaker precious metal prices and lower gold production.
GAM Holding was higher as the Swiss money manager lifted its dividend after annual profit rose.
The euro rose 0.02% to $1.3738.
Brent crude futures fell $1.683 to $109.360 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks recover strongly after Putin comments - Putin sees no need to send troops to Ukraine
- S&P eyeing another record high
- Industrials, financials recover
Dow Jones: 1.18%
Nasdaq: 1.48%
S&P 500: 1.24%
Easing concerns over tensions between Russia and Ukraine sparked a strong surge in US stocks on Tuesday morning as Wall Street erased the previous day's losses.
Sentiment recovered today after Russian President Vladimir Putin said he saw no need yet to send troops into Ukraine, helping the S&P 500 to rebound from its worst one-day loss in a month.
In fact, the US benchmark index was trading 1.2% higher early on at around 1,869, above the record closing high of 1,859.45 it reached on Friday.
Heavyweight blue chips in the industrial and financial sectors were helping markets to recover after the opening bell after being hit by a reduction in risk appetite on Monday.
Speaking for the first time since the ousting of former Ukraine President Viktor Yanukovych last month, Putin said that the situation in the Crimea had "dissipated" and he would only send soldiers to Ukraine in an extreme case.
He told reporters today that Yanukovych had asked Russia to send forces into Ukraine to protect Russian citizens within the country.
Secretary of State John Kerry was due to arrive today in Kiev as the US seeks diplomacy in the region.
"While traders will continue to keep an eye on events as they develop in the Ukraine, some more attention can now be paid to the markets themselves. Yesterday there was a number of economic data releases which were pretty much understandably overshadowed by the events in the Ukraine," said Market Analyst Craig Erlam from Alpari
No major economic data is due for release today in the States, though things are likely to pick on macro-wise in the coming days as investors await ISM services data, the Federal Reserve's Beige Book and the all-important non-farm payrolls report.
Blue chips recover, Facebook jumps
Industrial stocks such as Boeing and General Electric bounced this morning after a weak performance the previous session, along with financial giant Citigroup, Bank of America and Goldman Sachs.
Facebook rallied on reports the social-network site owner may buy Titan Aerospace for $60m, makers of solar-powered, high-altitude drones that can stay aloft for up to five years at a time.
Abercrombie & Fitch gained after Credit Suisse raised its recommendation on the company to 'outperform' from 'neutral', saying a more competitive pricing strategy and tighter cost controls will help bolster earnings.
Lorillard was higher on speculation Reynolds American will make a bid to buy the third-largest seller of cigarettes in the US.
SunEdison rose after Morgan Stanley raised the solar-energy technology developer to 'overweight', meaning investors should buy the shares.
Molycorp dropped as the owner of the largest rare-earth deposits outside of China reported fourth quarter revenue that fell short of analysts' estimates.
Electronics retailer Radioshack plummeted after missing analysts estimates with its quarterly results and saying that it will close a fifth of its stores. |
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| | Broker Tips | | Broker tips: Royal Mail, Glencore Xstrata, Fresnillo, Ashtead The share price of postal and delivery service firm Royal Mail was trading lower on Tuesday after Credit Suisse initiated coverage of the stock with an 'underperform' rating.
The Swiss bank has set a target of 530p, indicating 12% downside potential to current prices. "And for multiples in line with peers and a mid-range financial performance, we see better opportunities elsewhere in the sector," analysts said in a research report.
Prime Wealth Group has labelled Glencore Xstrata as a 'buy' after the company beat expectations with annual profits on Tuesday.
"Glencore shares have struggled to clear 350p since last summer, but with support now at the 20-day moving average at 329p, the shares are expected to return to the February intraday peak of 348p. Once this target is achieved, we expect shares to push on to the top of the July price channel as high as 380p."
Gold and silver miner Fresnillo was under heavy selling pressure on Tuesday after the company failed to meet analysts' forecasts with its annual results for last year.
Equity Analyst Charlie Long from Sanlam Securities said that after 2012, "2013 was a very difficult year with almost all metrics down significantly […] Despite the huge share price correction over the last 12 months or so, Fresnillo still trades on demanding [earnings] multiples."
Panmure Gordon has raised its target for Ashtead from 971p to 1,047p and retained its 'buy' rating, following "another sparkling update" from the equipment rental business.
"Great stuff from Ashtead here, despite tough comps, delivering third quarter results materially above expectations," said Panmure analysts Paul Jones and Mike Allen. "As one of the stronger players in the industry (both in terms of fleet size and financial firepower) Ashtead should continue to enjoy good levels of organic growth, no doubt supplemented by bolt-on acquisitions." | | |
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