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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: Ukraine concerns drive stocks firmly lower - FTSE closes down 76 points
- Ukraine continues to dent confidence
- Copper prices hit by China worries
techMARK 2,859.92 -0.95%
FTSE 100 6,712.67 -1.12%
FTSE 250 16,559.45 -0.67%
UK stocks ended the week on a sour note, dragged lower by concerns surrounding Ukraine and Russia, together with falling copper prices and a dearth of company releases from the City's biggest players.
As a result, the top tier index closed down 75.82 points on the day, and 97.03 on the week, at 6,712.67.
Russian President Vladimir Putin today disregarded a warning from US President Barack Obama over Moscow’s military intervention. Following a phone call with Obama, Putin released a statement saying Russia could not ignore calls for help from Russian citizens in Ukraine.
Russia now has an estimated 30,000 troops in Ukraine’s Crimea region, Ukrainian border guards told Reuters. That compares to 11,000 permanently based with the Russian Black Sea fleet in the port of Sevastopol before the crisis.
Moscow has said it will “not accept the language of sanctions and threats" after the European Union and US told Russia of the repercussions on Thursday.
Chris Beauchamp, Market Analyst at IG, said: "Memories of last week, when no one even dreamed of the possibility of a Russian intervention into Ukraine, are driving markets.
"It seems a further stand off is developing, with the west edging tentatively towards sanctions and the Ukrainian government denouncing the planned Crimean referendum. However, the wily Russian president still holds the strongest hand, with his ace being the 30,000 Russian troops now reputed to be on the ground in the Crimea."
Meanwhile, the US non-farm payrolls report showed jobs increased by 175,000 in February, compared with a revised 129,000 a month earlier, surprising analysts who had predicted 150,000. Revisions to the previous two months of data added a further 25,000 jobs.
The jobless rate increased to 6.7% from 6.6% although this largely reflected a rise in the labour force.
Senior US Economist Paul Dales from Capital Economics said that the data “pretty much guarantees that the Fed will taper its asset purchases further at the mid-March meeting, especially as payrolls would have been stronger if it wasn’t for the unusually severe weather”.
Copper prices hit by China worries
Fears over a decline in the rate of growth in China prompted copper futures to register their biggest decline in more than two years today. China, which is the biggest industrial metal consumer in the world, has issued a raft of negative data in recent times. It was reported today that the country's first company had defaulted on a mainland-traded bond.
Beauchamp added: "Non-farm payrolls euphoria wore off quickly this afternoon in London, as gains made in the wake of the US employment number were quickly given back. It appears that no one wants to be particularly long heading into the weekend, with the risk of another development in the Ukraine crisis still an eminent possibility.
"The mining sector was given a hefty push lower as falling copper prices and a corporate bond default in China put the wind up investors. The news raises the uncomfortable prospect of more companies potentially following suit, which would have nasty effects on mining companies as growth slows in the world’s second largest economy."
UK inflation expectations fall, rise in Bank rate expected earlier
The median expectation for inflation over the coming year in the UK fell to 2.8% in February from 3.6% in November, according to the Bank of England/GfK's latest quarterly Inflation Attitudes Survey.
In terms of how they see inflation behaving in the 12 months after that, respondents predicted a 2.8% rate of increase in prices, down from 3.6% in November.
In other UK news, a survey showed UK permanent job placements rose at the fastest pace in almost four years in February.
A monthly index measuring permanent job placements from consultancy KPMG and the Recruitment and Employment Confederation climbed to 65.2 in February, its highest level since March 2010, compared with 62.1 in January.
Quiet day for company news
G4S moved higher, ahead of the release of the scandal-hit security giant's annual results on Wednesday. Investors will be looking for a more positive outlook with a clear strategy in place after what is set to be a disappointing set of figures for 2013.
Meanwhile, mining groups Fresnillo, Antofagasta, Anglo American and Randgold were registering losses today, tracking metals prices lower, apparently on worries that the first onshore bond default in China would weigh on the price of copper as it is often used as collateral for loans.
Telecoms firm Vodafone was also down after Bank of America Merrill Lynch reportedly removed the stock from its ‘Europe 1’ list. Sentiment in the sector was also dampened after Telecom Italia scrapped its dividend as it reported a full-year net loss of €674m.
Burberry was a heavy faller as it looks set to record its biggest three-day drop in over a month on the back of concerns about the potential impact of sanctions that have been imposed by the US and the EU on Russia as a result of the Ukraine crisis. |
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| | FTSE 100 - Risers
G4S (GFS) 243.90p +3.57%
Pearson (PSON) 1,054.00p +2.03%
Petrofac Ltd. (PFC) 1,405.00p +1.96%
Legal & General Group (LGEN) 237.20p +1.54%
Sports Direct International (SPD) 822.00p +1.17%
Hargreaves Lansdown (HL.) 1,385.00p +1.09%
Severn Trent (SVT) 1,873.00p +0.97%
ITV (ITV) 200.50p +0.96%
Aviva (AV.) 508.50p +0.89%
Carnival (CCL) 2,396.00p +0.88%
FTSE 100 - Fallers
Anglo American (AAL) 1,462.50p -6.55%
Glencore Xstrata (GLEN) 324.85p -4.44%
Antofagasta (ANTO) 877.00p -4.15%
Randgold Resources Ltd. (RRS) 4,880.00p -3.65%
Vodafone Group (VOD) 238.65p -3.50%
Rio Tinto (RIO) 3,200.00p -3.34%
CRH (CRH) 1,695.00p -2.81%
Aberdeen Asset Management (ADN) 381.50p -2.20%
Fresnillo (FRES) 927.50p -2.16%
Experian (EXPN) 1,046.00p -2.15%
FTSE 250 - Risers
Shaftesbury (SHB) 650.00p +3.34%
BH Global Ltd. USD Shares (BHGU) 12 +3.27%
Ted Baker (TED) 2,152.00p +2.97%
Greencore Group (GNC) 301.00p +2.73%
Kenmare Resources (KMR) 16.00p +2.56%
Oxford Instruments (OXIG) 1,394.00p +2.50%
Serco Group (SRP) 482.50p +2.49%
Countrywide (CWD) 682.50p +2.40%
esure Group (ESUR) 270.70p +2.00%
Hunting (HTG) 891.50p +1.89%
FTSE 250 - Fallers
African Barrick Gold (ABG) 298.60p -6.69%
ITE Group (ITE) 234.00p -4.88%
Keller Group (KLR) 1,075.00p -4.53%
Polymetal International (POLY) 565.00p -4.40%
Carillion (CLLN) 366.80p -4.20%
Imagination Technologies Group (IMG) 173.10p -3.83%
Essar Energy (ESSR) 72.25p -3.67%
Vedanta Resources (VED) 862.50p -3.36%
Foxtons Group (FOXT) 374.10p -3.23%
Ferrexpo (FXPO) 141.60p -3.21% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks slide after US non-farm payrolls report FTSE 100: -1.12%
DAX: -2.01%
CAC 40: -1.15%
FTSE MIB: -0.98%
IBEX 35: -1.32%
Stoxx 600: -1.25%
European stocks declined as investors weighed data from the US Labor Department which revealed employers added more jobs than forecast, but the unemployment rate unexpectedly rose.
The US non-farm payrolls report showed jobs increased by 175,000 in February, compared with a revised 129,000 a month earlier, surprising analysts who had predicted 150,000. Revisions to the previous two months of data added a further 25,000 jobs.
The jobless rate increased to 6.7% from 6.6% though this largely reflected a rise in the labour force.
Senior US Economist Paul Dales from Capital Economics said that the data “pretty much guarantees that the Fed will taper its asset purchases further at the mid-March meeting, especially as payrolls would have been stronger if it wasn’t for the unusually severe weather”.
The report follows unofficial data earlier in the week from ADP which showed that private-sector payrolls rose 139,000 in February, falling short of economists’ estimates for a gain of 160,000 jobs. Meanwhile, claims for unemployment benefits dropped by 26,000 to a three-month low of 323,000.
The Federal Reserve is monitoring the labour market as it prepares for its next policy meeting on March 18th and 19th.
Fed Chair Janet Yellen has indicated that the central bank is likely to continue reducing monthly asset purchases at each meeting until ending it all together later this year.
In other US news on Friday, a report from the Commerce Department showed the US trade deficit widened slightly in January to $39.1bn from December’s revised $39bn deficit.
Exports climbed 0.6% to $192.8bn and imports also rose 0.6% to $231.6bn.
German industrial production
Germany's industrial production expanded at a 0.8% month-on-month in January, beating the consensus forecast for a 0.7% increase.
December's figure was also revised to a 0.1% rise from the prior reading of a 0.6% drop.
In year-on-year terms, January factory production rose by 5.0%, beating expectations for growth of 3.9%. December's data was also revised to 3.4% growth from the prior reading of a 2.6% advance.
Ukraine tensions
Russian President Vladimir Putin today disregarded a warning from US President Barack Obama over Moscow’s military intervention.
Moscow has said it will “not accept the language of sanctions and threats" from the US and the European Union.
The crisis escalated on Thursday when Ukraine’s Crimea region voted to join Russia. A referendum will be held on March 16th.
Ukraine's interim Prime Minister Arseniy Yatsenyuk said today that “no-one in the civilised world will recognise the decision of the so-called referendum of the so-called Crimean authorities".
Yatsenyuk also said Ukraine was open to talks with Russia as long as it withdrew its troops and abided by international agreements.
Miners slide
Mining groups Fresnillo, Antofagasta, Anglo American and Randgold were registering losses on fears that the first onshore bond default in China would weigh on the price of copper as it is often used as collateral for loans.
Airbus Group slumped as British Airways said one of its Airbus jets suffered an engine surge during a flight to France, forcing the pilot to return to London’s Heathrow airport.
FLSmidth & Co. gained as the Danish mining-equipment supplier named Lars Vestergaard as its new Chief Finance Officer to replace Ben Guren.
Getinge edged lower as the Swedish maker of sterilisation systems forecast first-quarter pre-tax profit that missed market expectations.
Air France advanced after reporting strong February traffic statistics and load factor.
Fugro dropped after the oil-field surveyor posted full-year revenue that fell short of analysts’ forecasts.
The euro rose 0.02% to $1.3864.
Brent crude futures climbed $0.643 to $108.800 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks mixed as investors digest strong jobs report - Non-farm payrolls rise 175k, ahead of forecasts
- Jobless rate rises to 6.7 per cent
- Gap sales unexpectedly fall
Dow Jones: 0.26%
Nasdaq: -0.42%
S&P 500: 0.05%
US markets were mixed in early trading on Friday after the Labor Department revealed employers added more jobs than forecast but the unemployment rate unexpectedly rose.
The US non-farm payrolls report showed jobs increased by 175,000 in February, compared with a revised 129,000 a month earlier, surprising analysts who had predicted 150,000. Revisions to the previous two months of data added a further 25,000 jobs.
The jobless rate increased to 6.7% from 6.6% though this largely reflected a rise in the labour force.
Senior US Economist Paul Dales from Capital Economics said that the data “pretty much guarantees that the Fed will taper its asset purchases further at the mid-March meeting, especially as payrolls would have been stronger if it wasn’t for the unusually severe weather”.
The report follows unofficial data earlier in the week from ADP which showed that private-sector payrolls rose 139,000 in February falling short of economists’ estimates for a gain of 160,000 jobs. Meanwhile, claims for unemployment benefits dropped by 26,000 to a three-month low of 323,000.
The Federal Reserve is monitoring the labour market as it prepares for its next policy meeting on March 18th and 19th.
Fed Chair Janet Yellen has indicated that the central bank is likely to continue reducing monthly asset purchases at each meeting until ending it all together later this year.
In other news on Friday, a report from the Commerce Department showed the US trade deficit widened slightly in January to $39.1bn from December’s revised $39bn deficit.
Exports climbed 0.6% to $192.8bn, led by increased sales of US-made machinery, aircraft and medical equipment. Imports also rose 0.6%to $231.6bn, driven by petroleum.
Ukraine tensions
Russian President Vladimir Putin has snubbed a warning from US President Barack Obama over Moscow's military intervention in Crimea.
Following a telephone conversation with Obama, Putin released a statement today saying that Russia could not ignore calls for help from Russian speakers in Ukraine.
Ukraine’s interim Prime Minister Arseniy Yatseniuk said the government is ready to talk to Russia, but only if Moscow pulls troop out of Crimea.
Crimea has voted to join Russia and a referendum will be held in nine days, which Obama and Western leaders said would violate Ukraine’s constitution.
Gap, H&R Block
Gap declined as the retailer said sales at stores open at least a year unexpectedly fell in February, partly due to the severe weather across the north-east and Midwestern regions of the States. The fashion group said that comparative sales were down 7% year-on-year, while analysts had expected a 1.1% rise.
H&R Block slipped as the tax-preparation company reported a third-quarter loss above what analysts had forecast.
GT Advanced Technologies gained after Credit Suisse upgraded the shares to ‘outperform’ from ‘neutral’.
Safeway Inc. dropped as Cerberus Capital Management LP’s Albertsons agreed to buy the grocery-store operator for about $40 a share in a $9bn deal that may face federal antitrust review. |
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| | Newspaper Round Up | | HSBC, Royal Mail, Aggreko, Aviva Goldman Sachs has removed HSBC from its ‘conviction buy’ list and reduced its profit forecasts following the bank’s 2013 results last week. Goldman maintained a ‘buy’ recommendation for the stock, but lowered its target to 740p from 900p.
Analysts have cut their estimates for 2014 to 2017 on the back of “weak operating trends” in the fourth quarter, accounting changes with regard to HSBC’s stake in Chinese lender Bank of Communications and uncertainties surrounding regulatory adjustments to capital requirements.
JPMorgan Cazenove has reiterated an ‘overweight’ recommendation for postal service giant Royal Mail Group and lifted its target by nearly a tenth after reassessing the group's pension liabilities.
The bank raised its target from 700p to 765p, which implies around 30% upside to current prices.
Temporary power and temperature control firm Aggreko was pulling back slightly on Friday after strong gains the day before as UBS lowered its price target for the stock on the back of currency movements following its 2013 results.
“Management expects 2014 trading profit in constant currency terms to be at a similar level to 2013, but given movements in FX, there is likely to be a marked translational impact on 2014 reported results,” the bank said, reducing its price target from 1,680p to 1,550p.
Barclays has lifted its target for insurance group Aviva from 380p to 415p after the company beat expectations with its annual results, though the bank still kept an ‘underweight’ recommendation on the stock on valuation concerns.
While the bank admitted that Aviva has “made much more progress over a reasonably short period of time than we had originally envisaged”, the stock trades at nearly 12 times earnings estimates for 2014, which is “no longer cheap” compared with the wider sector. | | |
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