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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 fall on China concerns, ex-div stocks weigh - Chinese concerns hammer copper prices
- Ex-div stocks weigh on markets
- Poundland, Pets at Home in focus
- Prudential gains, G4S slumps
techMARK 2,837.07 -0.51%
FTSE 100 6,637.18 -0.72%
FTSE 250 16,390.10 -0.55%
UK stocks opened with heavy losses on Wednesday as ongoing concerns surrounding China hammered copper prices.
Mining and banking stocks were among the worst performers in London, pushing the FTSE 100 down 0.7% to 6,637 in early trading.
"Over the past two weeks, fears of a significant slowdown in Chinese economic growth have clearly re-emerged as credit conditions in the country have tightened and commodity prices have sharply declined," explained analysts at Jefferies this morning.
Copper futures for three-month delivery on the London Metal Exchange were little changed $6,469 a metric ton after falling to a low of $6,411 early on, their lowest intraday level since July 2010.
Investors were also continuing to digest the latest developments in Ukraine ahead of the looming Crimea referendum on March 16th. With the Crimea region set to vote on whether or not to split from Ukraine and join Russia, Western leaders have threatened more sanctions on Russia.
Meanwhile, emerging fears about new protests in Turkey were also a cause for concern this morning with the Borsa Istanbul 100 index trading down 1% early on. Clashes have erupted in the aftermath of the death of a boy nine months after he was injured in the Istanbul protests last year.
Ex-div stocks weigh, IPOs in focus
A number of heavyweight FTSE 100 stocks were lower this morning after going ex-dividend, including British American Tobacco, Hammerson, Standard Chartered, Meggitt, Hargreaves Lansdown and Land Securities.
On the FTSE 250, Direct Line, Costain, Domino's Pizza, Al-Noors Hospitals and Serco all went ex-div today.
Precious metals producer Randgold also went ex-dividend today but inched upwards as the stock tracked gold prices higher which rose to a 19-week high on safe-haven demand.
The wider mining sector was in the red with Kazakhmys, Anglo American and BHP Billiton registering losses. Banks such as HSBC, Barclays and RBS were also trading lower.
UK retailers Poundland and Pets at Home were being closely watched today as they listed on the UK stock market, with both pricing their initial public offerings (IPOs) at the top of their expected ranges. Poundland jumped instantly after the open, while Pets at Home fell, but was still within the indicative price range set out by the company.
"Taken together, both IPO debuts will be seen as a success, as retail investors were given the opportunity to be involved in the IPOs. Both these companies are consumer facing, so highly popular in the UK," said Market Strategist Ishaq Siddiqi from ETX Capital.
Insurance giant Prudential was in positive territory after reporting a 17% rise in operating profit and a 15% increase in the full-year dividend after a "strong performance in 2013".
Security solutions provider G4S, however, failed to impress with its 2013 results after an "extremely challenging year". |
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| FTSE 100 - Risers
Prudential (PRU) 1,418.00p +4.19%
Sainsbury (J) (SBRY) 336.50p +0.81%
Group (VOD) 227.95p +0.75%
Coca-Cola HBC AG (CDI) (CCH) 1,501.00p +0.67%
Tesco (TSCO) 315.90p +0.40%
Morrison (Wm) Supermarkets (MRW) 231.40p +0.26%
Centrica (CNA) 327.80p +0.24%
SSE (SSE) 1,430.00p +0.21%
William Hill (WMH) 376.90p +0.21%
BT Group (BT.A) 400.90p +0.10%
FTSE 100 - Fallers
G4S (GFS) 235.30p -4.12%
Standard Chartered (STAN) 1,202.00p -3.76%
British American Tobacco (BATS) 3,215.50p -3.57%
Hammerson (HMSO) 556.00p -2.80%
Meggitt (MGGT) 454.80p -2.42%
HSBC Holdings (HSBA) 605.10p -1.87%
Land Securities Group (LAND) 1,048.00p -1.78%
Melrose Industries (MRO) 291.90p -1.78%
Aggreko (AGK) 1,513.00p -1.75%
Anglo American (AAL) 1,411.50p -1.67%
FTSE 250 - Risers
Ferrexpo (FXPO) 143.10p +2.80%
Perform Group (PER) 280.00p +1.82%
WH Smith (SMWH) 1,194.00p +1.70%
Hikma Pharmaceuticals (HIK) 1,495.00p +1.49%
esure Group (ESUR) 268.40p +1.44%
Hiscox Ltd (HSX) 671.00p +1.28%
Micro Focus International (MCRO) 784.50p +0.97%
Brewin Dolphin Holdings (BRW) 335.00p +0.90%
KCOM Group (KCOM) 98.95p +0.76%
Amlin (AML) 477.80p +0.70%
FTSE 250 - Fallers
African Barrick Gold (ABG) 236.30p -5.48%
Direct Line Insurance Group (DLG) 255.90p -4.23%
Brown (N.) Group (BWNG) 555.50p -4.14%
RPS Group (RPS) 328.70p -3.58%
Serco Group (SRP) 446.60p -3.42%
Barratt Developments (BDEV) 409.90p -2.45%
Devro (DVO) 258.20p -2.20%
Rightmove (RMV) 2,615.00p -2.17%
Tullett Prebon (TLPR) 325.00p -2.11% |
| | UK Event Calendar | | Wednesday March 12
INTERIMS
Brooks Macdonald Group
INTERIM EX-DIVIDEND DATE
Centaur Media, Dechra Pharmaceuticals, Foresight 3 VCT, Harbourvest Senior Loans Europe Ltd., Hargreaves Lansdown, ISG, Standard Life UK Smaller Companies Trust, Wilmington Group
QUARTERLY PAYMENT DATE
Unilever
QUARTERLY EX-DIVIDEND DATE
British Assets Trust, Land Securities Group, XP Power Ltd. (DI)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (14:30)
Industrial Production (EU) (10:00)
MBA Mortgage Applications (US) (11:00)
Treasury Budget Statement (US) (18:00)
Interest rate decision (Thailand)
GMS
Impact Holdings, Telfonica Czech Republic A.S. GDR (144A/REG S)
FINALS
Access Intelligence, Cloudbuy, Ferrexpo, French Connection Group, G4S, Hikma Pharmaceuticals, Kenmare Resources, MirLand Development Corporation, Servelec Group , StatPro Group, Telecom Egypt SAE GDS (Regs), Hochschild Mining, Modern Water
ANNUAL REPORT
Man Group
SPECIAL EX-DIVIDEND PAYMENT DATE
Direct Line Insurance Group, Plus500 Ltd (DI)
EGMS
Third Point Offshore Investors Limited
AGMS
C A Sperati
UK ECONOMIC ANNOUNCEMENTS
Balance of Trade (09:30)
FINAL DIVIDEND PAYMENT DATE
Income & Growth VCT
FINAL EX-DIVIDEND DATE
AL Noor Hospitals Group, Avesco Group, British American Tobacco, British Polythene Industries, CareTech Holding, Costain Group, CQS Rig Finance Fund Ltd., Crest Nicholson Holdings, Direct Line Insurance Group, Domino's Pizza Group, FBD Holdings, Hammerson, Hellermanntyton Group, Meggitt, MTI Wireless Edge Ltd., Paddy Power, Plus500 Ltd (DI), Polar Capital Global Financials Trust, Randgold Resources Ltd., RM, Safestore Holdings, Serco Group, Standard Chartered, Temple Bar Inv Trust
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Chinese and Ukraine worries weigh on shares - Chinese yuan at five month lows
- Ukrainian Prime Minister to meet Obama
FTSE 100: -0.72%
Dax-30: -0.79%
Cac-40: -1.04%
FTSE Mibtel: -0.42%
Ibex 35: -0.64%
European equities have begun the session moderately lower as the tensions in Ukraine continue to build up, with traders also warily eyeing what may be a second onshore debt default in China involving another solar power outfit.
A second Chinese solar company, Baoding Tianwei Baobian, has attracted traders' attention after its debt was suspended from trading last Monday and the firm announced a second year of losses. That may draw attention to the finances of a sector in China - renewable energies - which some market commentary has seen as undergoing a bit of a bubble. Such companies are often the most prone to poor finances.
In parallel, forward contracts on the Chinese yuan have dropped to five-month lows. The unexpected depreciation in the country's currency places pressure on the use of commodities like copper as collateral for credit.
Acting as a backdrop, Ukraine's interim Prime Minister Arseniy Yatsenyuk is to meet US President Barack Obama and Secretary of State John Kerry in Washington. Yatsenyuk is scheduled to address the United Nations Security Council tomorrow.
Utilities weak
Germany's E.On has cut its dividend after announcing that it expects core profit to decline in 2014.
Italian peer Enel has said it sees core earnings slowing down compared to last year, as its main markets continue to suffer
Within the DJ Stoxx 600 the worst performance was seen in the following industrial groups: personal and household goods (-1.56%), automobiles and parts (-1.37%) and basic resources (-1.16%).
Light day expected on the economic front
Eurostat will release its latest industrial production figures for the Eurozone at 10:00.
Spain's index of harmonised consumer prices was flat in year-on-year terms during the month of February (consensus: -0.1%).
Crude futures slip
The euro/dollar is now only slightly off, by 0.03% at 1.3855.
Front month Brent crude futures are falling 0.686% to $107.81/barrel on the ICE. |
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| | US Market Report | | US close: Markets finish lower as S&P 500 pulls back from record - China, Ukraine concerns weigh on stocks
- S&P pulls back from Friday's record
- Fannie Mae, Freddie Mac to wind down
- Cash return hopes boost McDonald's
Dow Jones: -0.41%
Nasdaq: -0.63%
S&P 500: -0.51%
US stocks finished with moderate losses on Tuesday after a choppy session as lingering concerns over the Chinese economy and tensions in Ukraine weighed on sentiment.
After hitting another record high of 1,878.04 on Friday after a strong non-farm payrolls report and treading water on Monday, the benchmark S&P 500 ended Tuesday down 0.5%.
"[The] sell off in US markets could well just be some cautious profit taking starting to kick on after last week's push to a new record high for the S&P500," said Michael Hewson, Chief Market Analyst at CMC Markets.
"Fears of a slowdown in China, which were exacerbated over the weekend, with those weak trade numbers, emerging market growth concerns, as well as the prospect of no imminent solution to what is going on in the Ukraine is perhaps prompting a more risk-averse scenario amongst some investors," he said.
Geopolitical tensions, which weighed heavily on global equity markets last week, lingered on Tuesday after Ukraine boosted its defence forces ahead of a meeting between its Prime Minister Arseniy Yatsenyuk and US President Barack Obama tomorrow.
US Secretary of State John Kerry has rejected offers to negotiate with Russian President Vladimir Putin until Moscow considers US proposals on the turmoil in Ukraine.
Russia is reportedly drafting a counter offer to a US proposal to "de-escalate" the crisis. Washington has demanded that Moscow pull back its troops from Crimea and end attempts to annex the region.
In other news, the NFIB's US small business optimism index for February fell to 91.4 from 94.1 a month earlier, missing analysts' estimates.
Fannie Mae, Freddie Mac
Common shares of Fannie Mae and Freddie Mac sunk on reports that a Senate draft bill to wind down the two federally controlled mortgage firms will be out in coming days.
"This agreement moves us closer to ending the five-year status quo and beginning the wind down of Fannie and Freddie, while protecting taxpayers with strong private capital, building the components for a stable secondary market," said Senator Mike Crapo from the Senate Banking Committee.
Fast-food giant McDonald's bounced strongly following a subdued performance on Monday after the company reported a 0.3% drop in global same-store sales for February. Sentiment recovered strongly on Tuesday, however, after comments from Chief Financial Officer Pete Bensen prompted speculation about a higher cash return to investors.
Fashion retailer Urban Outfitters declined as Chief Executive Richard Hayne said it expects poor weather to hurt sales and profit margins in the first quarter. The outlook came after the company beat earnings forecasts for the fourth quarter.
Sector peer JC Penney surged after Citigroup raised its recommendation on the stock to 'buy' from 'neutral', while department store Macy's rose after Wells Fargo lifted its rating from 'market perform' to 'outperform'.
Chemical company DuPont fell after saying that results will be "challenged" by the severe winter weather and disruptions in Ukraine.
Banking stocks were under the weather including Goldman Sachs, JPMorgan Chase & Co and Bank of America. Energy firms such as Exxon Mobil and Chevron were also providing a drag. |
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| | Newspaper Round Up | | Wednesday newspaper round-up: Co-op, Mortgage rates, Travelex On Tuesday evening the Co-op decided on a revamp of its governance structure to a two-tier system. There will be one group resembling the top of a public company which will in turn report to a more traditional Co-op-style board of members. The change will be voted on May 17th by the group's regional boards and independent societies. That follows the resignation of its reform-minded Chief Executive, which branded the company as ungovernable. He will be replaced by former Morrison Finance Director Richard Pennycook, The Times says.
Just as the house buying season is due to begin and millions of Britons are deciding where to invest this year's Isa savings, Bank Governor Carney told a parliamentary committee that interest rates may rise six-fold by 2017. In parallel, mortgage rates may increase to 6%. That means homebuyers will have to analyse whether they would still be able to afford their loans when borrowing costs increase. That is exactly what the Bank is doing now, carrying out more research into just how many people are "most vulnerable" to higher rates, The Daily Telegraph reports.
The world's largest non-bank foreign exchange business, Travelex, is considering a stockmarket flotation. Over the last year the company saw underlying profits rise by no less than 21% thanks to the rise of the middle classes in markets such as China and India and growing international travel. Helping that trend along is the increasing use of smartphones to obtain cash before trips. No indication was given regarding the possible timing of the initial public offering or on whether a sale of the group might be an alternative option, writes The Daily Express.
Responding to renewed criticism from the Treasury Select Committee that the Bank of England's governance was "opaque, complex and byzantine" Governor Carney announced that the central bank will soon announce a strategic review of its governance systems. That comes as he was forced to admit that allegations of rigging in foreign exchange markets could prove to be a bigger scandal than the manipulation of LIBOR. The aim of the above reforms is to reinforce compliance and make staff more accountable. Carney will also create the post of a fourth deputy governor, The Guardian writes.
A damning report from the Office of Fair Trading (OFT) says that there may be competition concerns in the market for alternative funding to small and medium-sized enterprises (SMEs). The OFT report says that banks may be hindering SMEs access to such lenders. The soon-to-be-created Competition and Markets Authority will decide by autumn if there is a need for a full investigation into this segment of the market, according to The Times.
Lloyds' decision to water down pension benefits for about 35,000 employees - a third of its staff - by £1bn has sparked their ire. That amounts to a cut to their lifetime pensions of about £29,000 in terms of today's money. In exchange, they have been offered a payment of 3% of their pensionable pay, on average that works out to about £880 for each member of staff. As well, the cap on pensionable pay has been reduced from 2% to 0%, The Times says. | | |
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