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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 open: Markets flat as miners fall after poor data from Asia - China registers surprise trade deficit, CPI eases
- Japan GDP revised lower
- Mining stocks limit upside for FTSE
- Mondi upgraded to ‘buy’ by Citigroup
techMARK 2,863.34 +0.12%
FTSE 100 6,716.76 +0.06%
FTSE 250 16,578.93 +0.12%
UK markets opened broadly flat on Monday morning after a surprise trade deficit in China and downward revisions to growth estimates in Japan limited upside on the FTSE 100.
Mining stocks were capping gains on the resource-heavy Footsie, which was trading just 0.1% higher at 6,717 in early trading. This follows a 1.4% fall for the index last week.
Markets across Asia fell overnight after China’s trade balance fell to a deficit of $22.98bn in February, compared with a revised surplus of $32.87bn in January and expectations for a surplus of $14.5bn.
This was China’s first trade deficit in 11 months and comes after exports slumped at an annual rate of 18.1%, though analysts believe this largely reflects seasonal factors such as the Chinese Lunar New Year holiday, during which many factories remained shut. Imports grew by a slightly stronger-than-forecast 10.1% during the month.
Other data also showed that the annual rate of Chinese consumer price inflation fell to a 13-month low of 2% in February, down from 2.5% the month before and below forecasts.
Over in Japan, revised government figures show that Japanese gross domestic product expanded by just 0.7% on an annualised basis in the final three months of last year, down from the initial estimate of 1% growth.
Meanwhile, the current account deficit hit a record 1.5trn yen around £8.7bn in January, which comes ahead of a planned tax increase on sales next month - a move that had been expected to prompt higher spending in the lead up to it.
On a positive note closer to home, the British Chambers of Commerce revised its estimate for UK GDP growth to 2.8% for 2014, up from its prior forecast of 2.7%.
Mining stocks drop on China data
Miners fell sharply this morning as investors reacted to disappointing data from top metals consumer China. Antofagasta, Fresnillo and Anglo American were registering heavy falls early on, along with FTSE 100 BHP Billiton, Glencore Xstrata and Rio Tinto.
FTSE 250 resource stocks such as Kazakhmys, African Barrick Gold, Centamin, EVRAZ and Polymetal were also under the weather.
Paper and packaging group Mondi was among the best performers after Citigroup analysts upgraded the stock from ‘neutral’ to ‘buy’ and raised their target from 1,110p to 1,260p, saying they see “another strong year ahead”.
Tobacco giant British American was also benefitting after comments from Citigroup, which added the stock to its ‘Focus List’.
Manufacturing company Senior jumped after confirming that it has entered into an agreement to buy Malaysian based UPECA Technologies for £75.5m. Investec also lifted its recommendation for the shares from ‘reduce’ to ‘hold’. |
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| | FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 1,059.00p +3.22%
Mondi (MNDI) 1,109.00p +1.65%
Centrica (CNA) 329.30p +1.45%
Bunzl (BNZL) 1,596.00p +1.40%
Lloyds Banking Group (LLOY) 82.15p +0.98%
Aviva (AV.) 513.50p +0.98%
United Utilities Group (UU.) 794.00p +0.89%
London Stock Exchange Group (LSE) 2,028.00p +0.80%
HSBC Holdings (HSBA) 624.50p +0.79%
Kingfisher (KGF) 404.10p +0.75%
FTSE 100 - Fallers
Antofagasta (ANTO) 848.00p -3.31%
Fresnillo (FRES) 905.00p -2.43%
Anglo American (AAL) 1,427.50p -2.39%
BHP Billiton (BLT) 1,808.50p -2.16%
Glencore Xstrata (GLEN) 317.85p -2.15%
Rio Tinto (RIO) 3,141.50p -1.83%
Vodafone Group (VOD) 235.20p -1.45%
Experian (EXPN) 1,034.00p -1.15%
Petrofac Ltd. (PFC) 1,389.00p -1.14%
Aberdeen Asset Management (ADN) 378.20p -0.86%
FTSE 250 - Risers
Senior (SNR) 299.80p +3.49%
Savills (SVS) 614.00p +2.59%
Wetherspoon (J.D.) (JDW) 843.00p +2.37%
Perform Group (PER) 288.10p +2.13%
Millennium & Copthorne Hotels (MLC) 588.00p +1.99%
Pennon Group (PNN) 750.50p +1.97%
Genus (GNS) 1,173.00p +1.82%
Diploma (DPLM) 775.00p +1.71%
Foxtons Group (FOXT) 379.50p +1.44%
Keller Group (KLR) 1,090.00p +1.40%
FTSE 250 - Fallers
Kazakhmys (KAZ) 280.30p -4.17%
Essar Energy (ESSR) 69.60p -3.67%
African Barrick Gold (ABG) 288.90p -3.25%
Centamin (DI) (CEY) 56.20p -3.02%
Evraz (EVR) 62.05p -2.51%
Polymetal International (POLY) 551.50p -2.39%
Ferrexpo (FXPO) 139.00p -1.84%
Vedanta Resources (VED) 848.50p -1.62%
BlackRock World Mining Trust (BRWM) 474.50p -1.35%
Kentz Ltd. (KENZ) 749.00p -1.25% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks little changed after Chinese data - China reports trade deficit
- Japan's account deficit hits record
- Eurozone investor confidence report out
FTSE 100: 0.17%
DAX: -0.25%
CAC 40: 0.60%
FTSE MIB: 0.53%
IBEX 35: 0.47%
Stoxx 600: 0.07%
European stocks were little changed as investors weighed Chinese data and awaited the release of a report on the Eurozone's investor confidence.
China reported an unexpected trade deficit for February after exports slumped 18.1%, fuelling concerns that the world's second-largest economy is suffering a serious slowdown.
Separately, the National Bureau of Statistics showed China's consumer prices rose at their slowest rate in 13 months in February as pork prices fell by their most in over a year. The consumer price index rose 2% in February from a year earlier, slightly missing analysts’ expectations of 2.1%.
“A miss on trade and inflation data from the world’s second largest economy will put pressure on the mining sector this morning, many of which are significant components of the FTSE 100,” said David White, Trader at Spreadex.
In Japan, the current account deficit hit a record 1.5trn yen (around £8.7bn) in January, which comes ahead of a planned tax increase on sales next month - a move that had been expected to prompt higher spending in the lead up to the release.
In Europe this morning, a report on Eurozone investor confidence for March will be released. The sentiment index is expected to increase to 14 from 13.3 the previous month.
Later on in the US, Federal Reserve official Charles Plosser will speak at a panel in Paris as the central bank’s next policy meeting looms. The Fed meets on March 18th and 19th when it is anticipated to announce another round of monetary stimulus tapering.
Meanwhile, concerns over the ongoing unrest in the Ukraine continue to escalate as Moscow refused to bow to pleas from Western leaders to withdraw its troops from Crimea. “Indeed, the market is notoriously bad at pricing in geopolitical risk and has a tendency to overcharge for volatility, presenting binary outcomes through sometimes chaotic price shocks,” White said.
Miners slide on China fears
A gauge of miners declined including Antofasgasta and Fresnillo as weak Chinese data pushed the price of commodities, including copper, lower.
Bouygues SA edged higher following reports it is in talks to sell its network and some spectrum to Iliad SA for as much as €1.8bn.
SGS dropped after the Swiss testing and inspection firm said its Finance Chief Geraldine Matchett was resigning, effective July 2014.
The euro climbed 0.07% to $1.3885.
Brent crude futures fell $0.973 to $107.950 per barrel, according to the ICE. |
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| | US Market Report | | US close: Stocks rise after jobs data, but Ukraine concerns limit gains - Non-farm payrolls rise 175k, ahead of forecast
- Jobless rate rises to 6.7 per cent
- Trade deficit widens
- Ukraine in focus amid Crimea intervention
Dow Jones: 0.19%
Nasdaq: -0.37%
S&P 500: 0.05%
US stocks finished mostly higher on Friday with the S&P 500 hitting another record high after a strong February employment report, though gains were only modest in the face of ongoing concerns over geopolitical developments in Ukraine.
The S&P 500 closed up just 0.1% but still managed to reach an all-time high of 1,878 after swinging between gains and losses in afternoon trade. The Dow Jones Industrial Average gained 0.2% while the Nasdaq fell 0.4%.
Non-farm payrolls 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.
Chris Beauchamp, Market Analyst at IG, said that the market's perception of the data is that it was "just right", suggesting both strength and weakness in the economy given the rise in unemployment.
"This means the Fed is less likely to accelerate tapering, and for equity markets that is a very cheery thought on a Friday," he said.
Other data released showed that 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
Investors were keeping an eye on tensions in Ukraine after Russian President Vladimir Putin disregarded a warning from US President Barack Obama over Moscow’s military intervention in Crimea. 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 Crimea, 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.
Gap, H&R Block
Gap finished higher after an earlier fall 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.
Safeway Inc. fell 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.
Financials were performing well on Friday including JPMorgan Chase & Co, Goldman Sachs, Bank of New York Mellon, SunTrust Banks and Regions Financial Corporation.
GT Advanced Technologies gained after Credit Suisse upgraded the shares to ‘outperform’ from ‘neutral’. |
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| | Newspaper Round Up | | Crimea, Malaysian Airlines, Zero-hours The situation in Crimea does not pose a risk to Britain´s energy security as natural gas is imported from Norway. Also, power providers hedge their supplies 18 months in advance. Hence, there would be no excuse for them to raise prices on consumers. However, Ed Davey also told the BBC that an escalation of tensions, to the extent that a military conflict came about, and if it dragged on for months and months, could have an impact on prices, The Times reports.
International investigators continue to be at a loss regarding what provoked the crash of a Malaysian Airlines Boeing 777 this past weekend. The crew did not notify of any problems nor did any of the aircraft´s transponders warn of any signs of distress before the plane disappeared from radar scopes. In recent weeks US authorities had been tracking several “airline plots” but the Chairman of the House Intelligence Committee told media that the US military had not detected any signs of a mid-air explosion, according to The Wall Street Journal Europe.
On Sunday evening, Labour claimed that there was a rising tide of insecurity in the UK labour market. Shadow business secretary Chuka Umunna attacked the coalition for the tripling in so-called 'zero-hours' contracts since they won the last elections. Revised data from the Office for National Statistics revealed that 583,000 employees had no other option but to sign up to such agreements last year, twice the government´s estimate, The Guardian writes.
Following a decade at Asos, Labour peer Lord Waheed Alli is looking to take advantage of the strong growth forecast for e-commerce in India. Online retail sales on the sub-Continent are forecast to grow at a 25% per year clip over the next five years thanks to the take up of smartphones. Alli is the Chairman of Koovs, the Indian outfit which is now raising £22m through a listing on AIM. The initial public offering has been twice oversubscribed, The Daily Express reports.
When it releases its full-year results this Thursday Morrison will unveil aggressive price cuts aimed at discounters such as Aldi and Lidl, who have continued to snap up market share even in the midst of the economic recovery. The supermarket operator is also expected to announce that it will sell approximately £500m of property assets, less than the £800m which some parties are calling for, some of which may be returned to shareholders, The Times says.
High Street retailer Marks & Spencer is winning plaudits from experts before the launch this summer of its “mass market” current account with no monthly fees when in credit. Amongst the other enticing features of the new account are an overdraft deal, a rewards scheme, no minimum monthly funding requirement, and lower-than-average charges when using cash machines overseas, The Guardian says. | | |
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