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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: Negative finish amid profit taking - FTSE closes 48 points lower
- Ongoing concerns about Ukraine
- Poor corporate earnings weigh heavily
techMARK 2,899.18 -0.76%
FTSE 100 6,775.42 -0.71%
FTSE 250 16,614.35 -0.51%
It was another negative finish in the City today, as investors engaged in a round of profit taking amid the ongoing crisis in Ukraine, a disappointing result from Melrose and a number of stocks going ex-dividend.
Acting as a backdrop, there was negative market-chatter to be heard surrounding the potential risks from what may soon turn into China´s first default of an onshore bond and analysts modestly lowering their forecasts for Friday´s non-farm payrolls report Stateside.
To take note of as well, overnight, at China´s National People´s Congress, authorities in that country seemed to leave themselves some room for manouvre should gross domestic product not meet this year´s target for growth of 7.5%.
The FTSE 100 closed 48.35 points lower at 6,775.42.
Meanwhile, tensions still remain high about the situation in Ukraine given the Western condemnation of recent actions by Moscow to step up its military presence in the Crimea region.
"We have not been short of countries condemning the position of Russia but no one has gone as far as to actually react with any meaningful talk of sanctions against Russia. However, sanctions could cause huge issues for not only Russia but for the rest of Europe and the world," said James Hughes, Chief Market Analyst at Alpari UK.
UK February services PMI reveals capacity under pressure
A reading on levels of activity in the UK service sector slipped in February but was nevertheless indicative of a sharp pace of growth, while confidence in the outlook strengthened to its highest in four-and-half years.
The Markit service sector purchasing managers´ index fell to 58.2 from 58.3 in the month before. It was the slowest pace on record since June, but nevertheless came in ahead of the 58 points expected.
In other macro news, UK shop prices dropped for a 10th consecutive month in February, declining by 1.4% after a fall of 1% in January, according to the British Retail Consortium. This is the deepest level of deflation since December 2006, when the business group began recording data.
Friday´s US non-farm payrolls report may be modestly weaker than expected
The US ISM non-manufacturing purchasing managers' index dropped to a reading of 51.6 in February from 54 in the month before, its lowest level since February 2010. The main drag came from a steep fall in the employment gauge, which slid to 47.5 from 56.4.
"The uneven moves in the sub-indices suggest that weather was not the only cause of the headline decline," Barclays Research commented following the report.
Admiral climbs on profit jump, Melrose slumps
Investors cheered an in-line set of full-year results from insurance giant Admiral, as the group increased profits by 7%, despite revenues falling 8%.
Randgold Resources rose after Nomura raised its target from 4,600p to 6,000p and upgraded the stock to 'buy'.
Meanwhile, industrial conglomerate Melrose saw profits almost double in 2013, but shares dropped sharply after the company said that sales growth in 2014 remained "challenging". Both Numis and Investec downgraded their ratings on the stock this morning.
Meggitt was a big faller after Deutsche Bank cut its target on the stock from 510p to 485p.
TUI Travel traded lower after going ex-dividend. |
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| | FTSE 100 - Risers
Admiral Group (ADM) 1,526.00p +7.54%
Randgold Resources Ltd. (RRS) 5,050.00p +3.46%
RSA Insurance Group (RSA) 97.80p +1.98%
British American Tobacco (BATS) 3,325.00p +1.17%
Anglo American (AAL) 1,520.00p +1.16%
Antofagasta (ANTO) 911.50p +1.00%
Centrica (CNA) 322.30p +0.97%
IMI (IMI) 1,548.00p +0.91%
United Utilities Group (UU.) 793.00p +0.83%
Whitbread (WTB) 4,435.00p +0.82%
FTSE 100 - Fallers
Melrose Industries (MRO) 302.40p -7.78%
Meggitt (MGGT) 486.60p -3.93%
Rio Tinto (RIO) 3,269.00p -3.33%
TUI Travel (TT.) 435.10p -3.31%
CRH (CRH) 1,723.00p -3.04%
Experian (EXPN) 1,071.00p -2.81%
Persimmon (PSN) 1,433.00p -2.45%
BHP Billiton (BLT) 1,883.00p -2.28%
William Hill (WMH) 388.20p -2.22%
Schroders (SDR) 2,590.00p -2.12%
FTSE 250 - Risers
COLT Group SA (COLT) 140.90p +6.74%
Perform Group (PER) 295.00p +6.50%
Pace (PIC) 474.50p +6.01%
African Barrick Gold (ABG) 301.70p +5.49%
Vedanta Resources (VED) 857.50p +3.81%
Imagination Technologies Group (IMG) 188.60p +3.29%
Fisher (James) & Sons (FSJ) 1,485.00p +3.20%
Greencore Group (GNC) 286.00p +2.88%
Northgate (NTG) 607.50p +2.71%
International Personal Finance (IPF) 555.00p +2.68%
FTSE 250 - Fallers
Devro (DVO) 247.50p -10.65%
Playtech (PTEC) 737.50p -9.40%
Soco International (SIA) 422.10p -9.17%
Jupiter Fund Management (JUP) 405.80p -5.34%
Vesuvius (VSVS) 440.70p -4.17%
Alent (ALNT) 307.50p -3.73%
Carphone Warehouse Group (CPW) 336.70p -3.41%
Electra Private Equity (ELTA) 2,670.00p -3.37%
Millennium & Copthorne Hotels (MLC) 572.50p -3.05%
Halfords Group (HFD) 466.30p -2.91% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed as traders weigh euro-area data - Eurozone GDP, PMI, retail sales released
- ECB policy meeting looms
- EU offers Ukraine bailout
FTSE 100: -0.71%
DAX: -0.49%
CAC 40: -0.11%
FTSE MIB: 1.38%
IBEX 35: 0.87%
Stoxx 600: -0.03%
European stocks were mixed as investors weighed a slate of economic data and prepared for tomorrow's European Central Bank meeting.
The Eurozone's economy grew by 0.5% in the fourth quarter compared to a year earlier, in line with expectations, Eurostat confirmed today.
A separate report showed Eurozone retail sales increased by a seasonally adjusted 1.6% in January, surprising analysts who had predicted a 0.8% gain. In December sales fell by a revised 1.3%.
Markit's Eurozone composite purchasing managers' index, which measures manufacturing and services activity, came in at 53.3 in February, revised up from the flash estimate of 52.7, an improvement from the prior reading of 52.9.
The data comes a day ahead of the ECB's policy meeting. Economists are split on whether the ECB will change its policy at tomorrow's meeting to tackle high unemployment and low inflation.
ECB President Mario Draghi has said the current rate of inflation, at 0.8%, was well below the 2% target and remain low for a "protracted period of time". Unemployment also remains at 12%.
Last month Draghi hinted at the possibility of enacting greater measures, saying he was awaiting more comprehensive data in March before making a decision.
Economists are mixed on whether the ECB will take action.
IMF calls on ECB to cut interest rates
International Monetary Fund officials believe the ECB should cut interest rates and either inject more liquidity into the banking system via its Long-Term Refinancing Operations or start public and private asset purchases.
The IMF's European Department said in a blog that low inflation was thwarting efforts to reduce debt, regain competitiveness and tackle unemployment.
"The ECB must be sure that policies are equal to the tasks of reversing the downward drift in inflation and forestalling the risk of a slide into deflation," they said.
In other European news, the EU has put Italy on its watch list due the country's very high debt and warned France that it will miss agreed budget deficit targets unless it addresses the issue.
The European Commission said that Belgium, Bulgaria, Germany, Ireland, Spain, France, Croatia,Italy, Hungary, the Netherlands, Slovenia, Finland, Sweden, and the United Kingdom all had imbalances in their economies.
EU offers Ukraine aid
The European Union has promised €1.6bn in emergency aid to help the Ukrainian government avert a default.
The European Commission, the EU's executive arm, said its proposed emergency funding would be available once Ukraine strikes a loan agreement with the International Monetary Fund.
US Secretary of State John Kerry met with Russian Foreign Minister Sergei Lavrov today in Paris to address the political crisis in Ukraine.
Kerry warned Russia against violating "very clear legal obligations" to uphold Ukraine's unity after the country's government was accused of sending troops into Crimea. Russian President Vladimir Putin denied the claims yesterday, saying they were local self-defence forces to protect citizens and insisting military action would be used as a last resort.
Melrose, Lonmin
Melrose dropped after reporting fourth quarter profit that fell short of projections.
Lonmin slumped as the platinum producer said it won't meet its full-year sales target due to strikes in South Africa.
Carrefour advanced after France's largest retailer reported an increase in 2013 earnings and said it will lift spending this year.
Admiral Group jumped as the owner of the confused.com website posted profit and sales that exceeded forecasts.
Subsea 7 slumped as the offshore oil-services provider reported fourth quarter net income that missed analysts' estimates.
The euro fell 0.8% to $1.3732.
Brent crude futures dipped $0.970 to $108.250 per barrel, according to the ICE. |
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| | US Market Report | | US open: Analysts marking down forecasts for non-farm payrolls report - ISM services gauge surprises on the downside
- Estimates for non-farm payrolls report coming down
- Fed Beige book due out
- Crude futures slip
Dow Jones Industrials: -0.09%
Nasdaq Composite: 0.14%
S&P 500: 0.11%
The main US stock benchmarks dipped following the release of a surprise drop in the ISM services index ahead of Thursday´s European Central Bank policy meeting and Friday´s non-farm payrolls report.
"The uneven moves in the sub-indices suggest that weather was not the only cause of the headline decline," Barclays Research commented following those figures.
Nevertheless, the same analysts added that "Commentary from respondents suggests that some of this effect could be due to the implementation of the Affordable Care Act. but we do not yet think that it marks a significant slowdown in the pace of nonmanufacturing activity growth."
Downwards revisions to analysts´ estimates for growth in non-farm payrolls started to trickle in the wake of the release.
Equities jumped yesterday after comments from Russian President Vladimir Putin, who said he saw no need yet to send troops into Ukraine after the situation had "dissipated", adding that soldiers would only be deployed in an extreme case.
The Federal Reserve's Beige Book, which surveys economic conditions across different regions of the US, was due for release later in the evening.
In corporate news, US industrial conglomerate Honeywell advanced ahead of the bell after targeting sales of over $50bn by 2018, compared with $39.1bn generated in 2013. The company also said that earnings should grow at a double-digit percentage rate over the next five years.
Oil futures move lower
Front month West Texas crude futures were down by 1.08% to the $102.22/barrel mark on NYMEX.
10-year US Treasury yields were moving lower by one basis point to the 2.68% mark. |
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| | Broker Tips | | Housebuilders, Melrose, Intertek, SOCO International Credit Suisse has downgraded its rating for the UK housebuilding sector from 'overweight' to 'market weight', telling investors that it is time to take profits.
"To be absolutely clear we are not calling the top of the UK housing cycle, rather we are calling the top of the equity story, as we believe current valuations already factor in substantial future growth in the next two years," said Research Analyst Harry Goad.
Credit Suisse has cut its recommendations for Barratt Developments, Bellway, Persimmon and Taylor Wimpey from 'outperform' to 'neutral', and left both Berkeley and Bovis Homes at 'neutral'.
Numis Securities has downgraded its rating for industrial conglomerate Melrose from 'hold' to 'reduce', saying it sees downside risk to the current share price despite the company's strong annual results on Wednesday.
Analysts said that the market's focus is now on the next acquisition and the stock's already "heady" rating "appears to already be discounting the next deal".
Numis Securities has reiterated its 'buy' rating for Intertek despite the testing and quality control firm missing estimates with its 2013 results, saying that it remains upbeat about its long-term structural growth prospects and returns potential.
"While 2013 results were impacted by a slowdown in growth in the second half, management provided a more optimistic scenario for recovery progression in 2014," said analysts Steve Woolf and Mike Murphy.
Canaccord Genuity has cut its stance on oil and gas firm SOCO International from 'hold' to 'sell', saying the valuation is 'challenging' given that the shares trade at a hefty premium to the sector.
"SOCO trades at 121% of our central net asset value forecast, a substantial premium to the sector which trades at 82% on average," said analysts Thomas Martin and Charlie Sharp. "We would need to assume a 6.5% discount rate to see our central NAV rise to around our current target of 385p ." | | |
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