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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: Traders look through slight weakness in data - Aberdeen, Babcock, BHP Billiton and GKN provide a lift
- Insurers gain as Osborne calls for inquiry into leak
- UK PMI falls to eight-month low
techMARK 2,783.94 +0.70%
FTSE 100 6,652.61 +0.82%
FTSE 250 16,407.56 +0.82%
Stocks rose sharply on Wednesday as investors chose to look through what at first glance might have appeared to be slightly weaker than forecast global manufacturing data.
As Barclays Research put it to clients in an afternoon note "despite the broad-based slowdown, manufacturing activity remains well in expansionary territory in many key manufacturers, including the US, euro area, UK, Japan and some emerging markets."
No less important, many market observers are convinced that policymakers in Beijing will, sooner or later, move to prop up growth.
Acting as a backdrop, markets were tracking gains made on Wall Street on Monday evening after Federal Reserve Chair Janet Yellen pledged continued "extraordinary support" for the US economy. She said there is "considerable slack" in the labour market and that the Fed would continue to support the recovery "for some time to come".
The FTSE 100 ended the day 0.82% higher at 6,653, slightly underperforming indices across Europe.
The UK manufacturing purchasing managers' index (PMI) fell from a revised 56.2 to an eight-month low of 55.3 in March, disappointing analysts who had expected a figure closer to 56.7.
Analyst Armela Mancellari from Barclays Research pointed out that despite the growth slowdown, the PMI was still above the long-term average of 51.4. "However, this outcome supports our view that growth will be somewhat slower this year after the strong rebound experienced since the second quarter of 2013," she said.
For its part, the Bank of England's Financial Policy Committee warned that the eventual shift in the central bank's policy stance "could pose challenges in some sectors of the financial markets, particularly if global monetary policy stances were to adjust more abruptly than expected".
Aberdeen, Babcock and Legal&General gain
Asset manager Aberdeen surged this morning after saying that net outflows were just £0.2bn in March, compared with £3.9bn over the first two months of the year, helped by "encouraging inflows to emerging market debt, high yield bonds and property".
Sports Direct rose sharply after Liberum Capital said that it could expand its "limited scale" in many of the 19 European markets in which it already operates. Analyst Sanjay Vidyarthi said that organic growth alone is not viable, but identified "potential [acquisition] targets which equate to over 1,000 stores across Europe and around €2bn of sales".
Miner BHP Billiton responded to market speculation about a potential de-merger of non-core operations, saying that a "simplification of our portfolio is a priority". Shares rose after the company did not dismiss recent reports that it is considering a $20bn spin-off of its less-profitable assets of aluminium, manganese, thermal coal and nickel.
Prudential and Legal&General clambered up the leaderboard after George Osborne said he was "profoundly concerned" about the behaviour of the City regulator, the Financial Conduct Authority (FCA), after news of a review into the insurance sector was leaked. The Chancellor called for an inquiry into the leak.
Babcock rose after it was named preferred bidder on a 21-year contract with the London Fire Brigade. Panmure Gordon upgraded the stock to 'buy' on the back of last week's acquisition of helicopter services provider Avincis and yesterday's announcement of a potential nuclear decommissioning project.
Weir, the mining, oil and gas engineer, recovered towards the end of the trading session. Early in the day the company confirmed media speculation that it has made an indicative all-share merger proposal to Finnish rival Metso. No financial details were given but press reports suggest that it could pay £4bn for its rival.
Analysts at Canaccord Genuity said that the deal would need a "substantial equity element".
Supermarket stocks were among the fallers with Tesco in the red after Espirito Santoretained a 'sell' rating, saying that operationally the group had "not addressed its core offer on quality or pricing architecture". These "ongoing concerns will be reflected at the full-year results on April 16th", it said. |
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FTSE 100 - Risers
Aberdeen Asset Management (ADN) 416.50p +6.71%
ARM Holdings (ARM) 1,047.00p +4.91%
Sports Direct International (SPD) 892.50p +4.75%
Prudential (PRU) 1,317.00p +3.82%
Legal & General Group (LGEN) 211.70p +3.42%
easyJet (EZJ) 1,773.00p +3.38%
Aviva (AV.) 492.10p +3.17%
Babcock International Group (BAB) 1,387.00p +2.97%
CRH (CRH) 1,721.00p +2.75%
Ashtead Group (AHT) 975.50p +2.58%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 309.50p -2.09%
Pearson (PSON) 1,044.00p -1.79%
Morrison (Wm) Supermarkets (MRW) 210.80p -1.03%
Mondi (MNDI) 1,041.00p -0.76%
Weir Group (WEIR) 2,518.00p -0.71%
Tesco (TSCO) 293.40p -0.68%
Hargreaves Lansdown (HL.) 1,450.00p -0.55%
Diageo (DGE) 1,851.50p -0.51%
Burberry Group (BRBY) 1,388.00p -0.50%
Intertek Group (ITRK) 3,059.00p -0.42%
FTSE 250 - Risers
AL Noor Hospitals Group (ANH) 1,165.00p +8.47%
Heritage Oil (HOIL) 254.00p +6.95%
Intermediate Capital Group (ICP) 435.20p +5.20%
Bank of Georgia Holdings (BGEO) 2,610.00p +4.69%
Amec (AMEC) 1,171.00p +4.37%
Go-Ahead Group (GOG) 1,943.00p +4.29%
Halfords Group (HFD) 481.40p +4.24%
Rathbone Brothers (RAT) 1,890.00p +4.19%
Phoenix Group Holdings (DI) (PHNX) 684.50p +3.79%
Synergy Health (SYR) 1,430.00p +3.62%
FTSE 250 - Fallers
FirstGroup (FGP) 139.00p -4.73%
Xaar (XAR) 899.00p -4.16%
IP Group (IPO) 201.00p -3.27%
Senior (SNR) 300.00p -2.44%
Betfair Group (BET) 1,080.00p -2.35%
Jardine Lloyd Thompson Group (JLT) 1,042.00p -2.07%
Restaurant Group (RTN) 700.00p -1.82%
Provident Financial (PFG) 1,950.00p -1.66%
Tate & Lyle (TATE) 657.00p -1.57%
EnQuest (ENQ) 122.10p -1.53%
FTSE TechMARK - Risers
Skyepharma (SKP) 233.00p +9.36%
Consort Medical (CSRT) 980.00p +4.59%
Ricardo (RCDO) 678.00p +4.39%
Torotrak (TRK) 21.25p +3.66%
Wolfson Microelectronics (WLF) 137.75p +2.80%
Kofax Limited (DI) (KFX) 507.50p +2.53%
Innovation Group (TIG) 35.50p +2.16%
RM (RM.) 151.50p +2.02%
E2V Technologies (E2V) 158.75p +1.76%
Sepura (SEPU) 141.25p +1.44%
FTSE TechMARK - Fallers
XP Power Ltd. (DI) (XPP) 1,571.00p -4.79%
Promethean World (PRW) 31.00p -3.12%
NCC Group (NCC) 182.50p -2.67%
Vectura Group (VEC) 149.75p -2.28%
SDL (SDL) 333.25p -2.27%
Dialight (DIA) 900.00p -0.83%
Phoenix IT Group (PNX) 122.38p -0.51%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 185.96 -0.10%
Market Movers
techMARK 2,783.94 +0.70%
FTSE 100 6,652.61 +0.82%
FTSE 250 16,407.56 +0.82%
FTSE 100 - Risers
Aberdeen Asset Management (ADN) 416.50p +6.71%
ARM Holdings (ARM) 1,047.00p +4.91%
Sports Direct International (SPD) 892.50p +4.75%
Prudential (PRU) 1,317.00p +3.82%
Legal & General Group (LGEN) 211.70p +3.42%
easyJet (EZJ) 1,773.00p +3.38%
Aviva (AV.) 492.10p +3.17%
Babcock International Group (BAB) 1,387.00p +2.97%
CRH (CRH) 1,721.00p +2.75%
Ashtead Group (AHT) 975.50p +2.58%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 309.50p -2.09%
Pearson (PSON) 1,044.00p -1.79%
Morrison (Wm) Supermarkets (MRW) 210.80p -1.03%
Mondi (MNDI) 1,041.00p -0.76%
Weir Group (WEIR) 2,518.00p -0.71%
Tesco (TSCO) 293.40p -0.68%
Hargreaves Lansdown (HL.) 1,450.00p -0.55%
Diageo (DGE) 1,851.50p -0.51%
Burberry Group (BRBY) 1,388.00p -0.50%
Intertek Group (ITRK) 3,059.00p -0.42%
FTSE 250 - Risers
AL Noor Hospitals Group (ANH) 1,165.00p +8.47%
Heritage Oil (HOIL) 254.00p +6.95%
Intermediate Capital Group (ICP) 435.20p +5.20%
Bank of Georgia Holdings (BGEO) 2,610.00p +4.69%
Amec (AMEC) 1,171.00p +4.37%
Go-Ahead Group (GOG) 1,943.00p +4.29%
Halfords Group (HFD) 481.40p +4.24%
Rathbone Brothers (RAT) 1,890.00p +4.19%
Phoenix Group Holdings (DI) (PHNX) 684.50p +3.79%
Synergy Health (SYR) 1,430.00p +3.62%
FTSE 250 - Fallers
FirstGroup (FGP) 139.00p -4.73%
Xaar (XAR) 899.00p -4.16%
IP Group (IPO) 201.00p -3.27%
Senior (SNR) 300.00p -2.44%
Betfair Group (BET) 1,080.00p -2.35%
Jardine Lloyd Thompson Group (JLT) 1,042.00p -2.07%
Restaurant Group (RTN) 700.00p -1.82%
Provident Financial (PFG) 1,950.00p -1.66%
Tate & Lyle (TATE) 657.00p -1.57%
EnQuest (ENQ) 122.10p -1.53%
FTSE TechMARK - Risers
Skyepharma (SKP) 233.00p +9.36%
Consort Medical (CSRT) 980.00p +4.59%
Ricardo (RCDO) 678.00p +4.39%
Torotrak (TRK) 21.25p +3.66%
Wolfson Microelectronics (WLF) 137.75p +2.80%
Kofax Limited (DI) (KFX) 507.50p +2.53%
Innovation Group (TIG) 35.50p +2.16%
RM (RM.) 151.50p +2.02%
E2V Technologies (E2V) 158.75p +1.76%
Sepura (SEPU) 141.25p +1.44%
FTSE TechMARK - Fallers
XP Power Ltd. (DI) (XPP) 1,571.00p -4.79%
Promethean World (PRW) 31.00p -3.12%
NCC Group (NCC) 182.50p -2.67%
Vectura Group (VEC) 149.75p -2.28%
SDL (SDL) 333.25p -2.27%
Dialight (DIA) 900.00p -0.83%
Phoenix IT Group (PNX) 122.38p -0.51%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 185.96 -0.10% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Growth in US, China factory activity boosts stocks - US and Chinese factory activity grows
- German and Eurozone jobs data beat forecasts
- Danske Bank sees further ECB easing
FTSE 100: 0.82%
DAX: 0.50%
CAC 40: 0.80%
FTSE MIB: 1.03%
IBEX 35: 1.19%
Stoxx 600: 0.61%
European stocks edged higher after a report showed growth in US and Chinese manufacturing activity.
The ISM's US manufacturing index rose to 53.7 from 53.2 in February, but came in slightly under the consensus forecast of 54. A reading above 50 signals expansion.
The data follows China's official manufacturing purchasing managers' index (PMI) which revealed an improvement in the sector in March. China's PMI gauge for manufacturing activity rose to 53 last month from 50.2 in February, in line with analysts' expectations.
In the Eurozone, a revised manufacturing PMI report came in at 53 in March, matching the initial estimate and the consensus forecast.
The UK's PMI dropped to 55.3 last month from 56.2 in February, surprising analysts who had expected a reading of 56.7.
German and Eurozone unemployment
The Eurozone's unemployment rate was 11.9% in February, unchanged from the prior month. Analysts had expected it to rise to 12%.
In Germany, the unemployment rate remained stable at 6.7% in March, after February's reading was revised down from 6.8%. Consensus had been looking for a jobless rate of 6.8%.
The number of jobless in Europe's biggest economy dropped by 12,000 in March, compared to the consensus forecast for a decline of 10,000. February's decrease was revised to 15,000 from the prior reading of a 14,000 fall.
The reports come ahead of Thursday's European Central Bank (ECB) policy meeting. The ECB has been under pressure to find ways to tackle high unemployment and falling inflation in the euro-area.
The International Monetary Fund has called on monetary stimulus measures to boost the recovery.
Analysts at Danske Bank say they see "the odds slightly in favour of further ECB easing this week" .
"The Governing Council has discussed more easing at the latest ECB meetings and we think the balance will tilt this time. Our main scenario is a small refi rate cut to 0.15%," they said.
"If the ECB once again abstains from easing, we expect Draghi to sound dovish, but there will initially be a small disappointment and rates will inch higher. The markets will at some point get enough of soft words and instead demand action," Danske Bank added.
UK insurers rally
Insurance stocks, such as Prudential, received a boost from news that UK Chancellor George Osborne called for an inquiry into a leak by the Financial Conduct Authority on a planned review into part of the insurance sector.
Aberdeen Asset Management increased after the money manager announced £1.2bn in new funds for March and more plans to cut costs.
ICAP advanced as the interbroker dealer forecast full-year profit in line with analysts' estimates, despite a decline in sales at the broking unit.
BHP Billiton jumped after saying that it is planning to simplify its operations to focus on iron ore, copper, coal and petroleum.
Alstom climbed after the French maker of trains and power-generation equipment agreed to sell an auxiliary components unit to Triton for about €730m.
Cap Gemini slumped after Bank of America Corp. cut the French tech firm to 'underperform' from 'neutral'.
Osram Licht declined after the lighting manufacturer said sales of traditional lamps are falling faster than anticipated.
Metso Oyj was higher after The Times reported Weir Group may be willing to pay as much as €30 a share for the Finnish company.
Babcock rose for a second day after the engineering firm was named preferred bidder for a 21-year contract to manage London Fire Brigade's vehicle fleet and Panmure Gordon & Co. raised its rating to 'buy' from 'hold'. The company yesterday announced it was also chosen as preferred bidder to manage UK nuclear sites.
The euro was up 0.27% to $1.3806.
Brent crude futures fell $0.842 to $106.8690 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks gain as ISM manufacturing data improves - ISM manufacturing rises, but misses forecasts
- Construction spending improves
- Yellen comments continue to lift sentiment
Dow Jones: 0.62%
Nasdaq: 1.26%
S&P 500: 0.68%
US stocks climbed strongly on Tuesday after data showed a pick-up in domestic manufacturing growth and higher construction spend.
The ISM's US manufacturing index rose to 53.7 from 53.2 in February, but came in slightly under the consensus forecast of 54.
Meanwhile, construction spending unexpectedly improved by 0.1% in February after a revised 0.2% contraction the previous month.
The data follows China's official manufacturing purchasing managers' index (PMI) which revealed an improvement in the sector in March. China's purchasing managers index (PMI) gauge for manufacturing activity rose to 53 last month from 50.2 in February, in line with analysts' expectations.
In another lift to stocks, Chair Janet Yellen yesterday pledged continued "extraordinary support" for the US economy during a speech at a conference in Chicago.
Yellen emphasised that there is still significant room for improvement and "considerable slack" in the labour market. She said that the Fed would continue to aid the recovery "for some time to come".
"This commitment is strong, and I believe the Fed's policies will continue to help sustain progress in the job market," she said.
Last month Yellen surprised markets by saying that the Fed will consider raising interest rates about six months after end of quantitative easing but she made no mention of matter yesterday.
Meanwhile, soothing fears of the turmoil in Crimea was news that Russia had withdrawn some of its troops from eastern border of Ukraine. Nato is set to hold talks on how to discuss ways to support Ukraine following Russia's takeover of Crimea.
Yahoo, United Continental
Search engine giant Yahoo gained on reports that it could buy online video service News Distribution Net.
Airline group United Continental was higher in early morning trade after UBS upgraded the stock from 'neutral' to 'buy', saying that revenue growth could pick up in the second quarter.
Computer group Hewlett-Packard fell after paying $57m to settle a lawsuit amid claims that management defrauded shareholders by abandoning its business model. |
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| | Broker Tips | | Broker tips: Weir, Lloyds, SABMiller, Babcock Canaccord Genuity has retained its 'buy' recommendation for engineer Weir Group on the back of a possible merger with Finnish peer Metso, saying that "this deal has the potential to be very exciting".
"Our first thoughts are on a strategic basis, a deal would make considerable sense with scope for substantial synergies, but it would also need a substantial equity element to get the deal done whether it be through a merger or a rights issue to fund the transaction," said Canaccord analysts Harry Phillips and Rob Ellis.
The recent weakness in Lloyds' shares has prompted Numis Securities to upgrade its rating on the stock to 'buy'.
Numis pointed out that the bank's share price performance has been particularly weak since the government's share sale on March 26th and the stock now provides 30% upside to its 97p target. "We upgrade to buy' (from 'add') and highlight Lloyds Banking Group in our UK monthly 'top-picks' published today," said Analyst Mike Trippitt.
Fourth-quarter trading at beverages giant SABMiller could be "challenging", according to Credit Suisse, which retained its 'neutral' rating on the stock on Tuesday morning. The bank said it has kept a "cautious short-term stance" on the shares with a target of 3,100p.
"Whilst longer term we still expect SABMiller to outperform peers, in the immediate future we expect a deceleration in organic revenue growth to circa 3% in the fourth quarter (from 4% year-to-date and circa 7% over the past decade), which we believe could disappoint, particularly considering the stock's recent re-rating back to its circa 10% premium valuation versus its consumer staples peers," Credit Suisse said.
Panmure Gordon has raised its recommendation for engineering group Babcock from 'hold' to 'buy' after the recent acquisition of Avincis and a potential nuclear decommissioning project. The broker has hiked its target from 1,350p to 1,525p.
"While the current valuation is at the upper end of its historic trading range, we believe Babcock is in a strong position to outperform our forecast assumptions given its enhanced margin structure and improving levels of visibility in a number of different areas," Panmure said. | | |
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