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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: FTSE ends week on sour note as stocks plunge - FTSE ends 80.27 higher at 6,561.70
- Poor weather hits Feb UK construction
- Osborne says economic recovery vindicates his approach
- MPs to move ahead with proposals for all-female short-lists
techMARK 2,670.02 -1.82%
FTSE 100 6,561.70 -1.21%
FTSE 250 15,898.37 -1.55%
UK stocks ended Friday's session having suffered steep losses as technology stocks dragged on the back of a significant sell-off in the US last night and continued early in today's trading.
The FTSE 100 ended the day 80.27 points lower at 6,561.70, down 133.85 points, or 2%, on the week.
UK construction output declined in February as poor weather held back work, according to data released today.
Construction output fell 2.8% in February following a 2.1% rise in January, the Office for National Statistics revealed. It marked the biggest drop since November last year.
Year-on-year, output increased 2.8% in February, compared with 5.7% gain in January. Construction accounts for 6.3% of British gross domestic product.
Osborne hits back at economic critics
Meanwhile, Chancellor of the Exchequer George Osborne hit back at critics of his austerity policies on Friday, saying the UK's economic recovery vindicated his approach.
In excerpts of a speech he is due to deliver later in the day, Osborne was set to say healthier banks and a credible plan to fix public finances were essential to kick-start growth after the credit crunch.
Osborne, who is attending the International Monetary Fund's spring meetings in Washington this week, said the UK economy had grown faster than any other in the G7 in the last year and the IMF was forecasting it to do the same in 2014.
MPs move ahead with proposals for all-female short-lists for business roles
UK MPs have taken a step forward with proposals to gain legal clarification on all-female short-lists for business positions in a bid to boost the number of women in Britain's boardrooms.
A letter has reportedly been sent to the government's equality body calling for a ruling on whether the proposal would be legal, according to Sky News.
Fresnillo escapes the storm after JP Morgan hikes target
JPMorgan Cazenove has lifted its price target for Fresnillo from 965p to 1,030p and kept an 'overweight' rating, saying it continues to favour the Mexican precious metals producer over sector peer Hochschild ('neutral').
"We estimate Fresnillo should continue to enjoy lower average costs, aided by the high-quality Saucito II and San Julian projects. Over the next 10 years, we estimate an average all-in sustaining cost of $13.5/oz for Fresnillo, versus $19.2/oz for Hochschild."
Meanwhile, Hargreaves Lansdown was hit by comments from Morgan Stanley, reducing their target on the back of pricing pressure and concerns over its net interest income.
Airline rivals easyJet and IAG were flying lower after Heathrow's monthly traffic statistics revealed that 5.8m passengers passed through the London airport in March, down 2.8% on the year before.
Sports Direct led the retail sector lower, which sank despite a positive set of results from upmarket department store John Lewis. |
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| | FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 201.20p +1.98%
Fresnillo (FRES) 908.50p +1.00%
Resolution Ltd. (RSL) 278.90p +0.58%
Unilever (ULVR) 2,635.00p +0.50%
Burberry Group (BRBY) 1,413.00p +0.43%
Centrica (CNA) 334.90p +0.36%
BG Group (BG.) 1,113.50p +0.04%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 392.10p -5.27%
Hargreaves Lansdown (HL.) 1,257.00p -5.06%
Sports Direct International (SPD) 771.00p -4.81%
Ashtead Group (AHT) 880.00p -4.71%
ARM Holdings (ARM) 958.50p -4.53%
London Stock Exchange Group (LSE) 1,803.00p -4.35%
ITV (ITV) 183.00p -3.73%
easyJet (EZJ) 1,700.00p -3.46%
Travis Perkins (TPK) 1,769.00p -3.12%
Weir Group (WEIR) 2,496.00p -2.77%
FTSE 250 - Risers
ITE Group (ITE) 208.30p +3.63%
Genus (GNS) 960.50p +2.18%
Ferrexpo (FXPO) 154.50p +1.91%
KCOM Group (KCOM) 101.10p +1.61%
Jardine Lloyd Thompson Group (JLT) 1,068.00p +1.23%
Phoenix Group Holdings (DI) (PHNX) 644.00p +1.10%
Hansteen Holdings (HSTN) 110.40p +1.10%
African Barrick Gold (ABG) 260.90p +1.08%
Domino's Pizza Group (DOM) 537.50p +0.94%
Hays (HAS) 152.80p +0.92%
FTSE 250 - Fallers
Pace (PIC) 404.70p -7.09%
Workspace Group (WKP) 570.00p -5.94%
Imagination Technologies Group (IMG) 199.70p -5.85%
IP Group (IPO) 200.00p -4.99%
Grainger (GRI) 222.90p -4.99%
Jupiter Fund Management (JUP) 386.00p -4.67%
Perform Group (PER) 238.60p -4.64%
Beazley (BEZ) 250.70p -4.57%
Worldwide Healthcare Trust (WWH) 1,217.00p -4.32%
Greencore Group (GNC) 255.50p -4.24% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Tech stocks provide drag on markets - Tech stocks drag on market
- Inflation data out in China, Germany and Spain
- Russian-Ukraine tensions continue to escalate
FTSE 100: -1.21%
DAX: -1.47%
CAC 40: -1.08%
FTSE MIB: -1.07%
IBEX 35: -1.37%
Stoxx 600: -1.40%
European stocks ended the week lower as technology stocks tumbled following heavy falls on the Nasdaq Composite the previous session.
The Nasdaq dropped 3.1% yesterday, led by a technology sell-off amid valuation concerns.
A gauge of technology stocks posted the worst performance on the Stoxx 600 today as investors continued to rotate out of so-called 'momentum' stocks – high-growth names in the technology sectors, particularly - which have done well over recent months.
ARM Holdings and Infineon Technologies were among the biggest fallers.
Inflation in Germany, Spain and China
German consumer prices rose by 0.9% year-on-year last month in European harmonised terms, the first time they have dropped under 1% in June 2010. On the month, prices increased 0.3%. The figures were in line with forecasts.
In Spain, revised figures showed inflation decreased 0.1% year-on-year in March, compared to the initial estimate of a 0.2% decline. Prices rose by 0.2% month-on-month after staying flat a month earlier.
The European Central Bank, which is targeting inflation of just below 2%, has faced mounting pressure to tackle falling inflation in the euro-area.
The ECB is expected to ease policy in June, according to a Bloomberg survey of economists released yesterday.
In China, inflation rose 2.4% year-on-year following a 2% increase in February. However, consensus had forecast an increase of 2.5%. On a monthly basis, consumer prices in the world's second largest economy dropped 0.5% from the prior month, in line with consensus. In February inflation had risen by 0.5% on the month.
It fuelled concerns of a slowdown in China and followed weak trade figures, slower credit issuance and big declines in property sales.
Ukraine tensions
Ukraine said today it would turn to Europe for its gas supply as the turmoil between the nation and Russia escalated.
Russia warned it could cut supplies over Kiev's refusal to pay Moscow's "political, uneconomic price" for natural gas supplies.
According to NATO, Russian military units deployed in more than 100 makeshift bases just across the Ukraine border are in a state of high readiness.
Travel stocks fall
A gauge of travel and leisure companies slid on the Stoxx 600, including International Consolidated Airlines (IAG), after a statement from Heathrow Airport Holdings showed the number of passengers passing through the UK airport fell by 2.8% in March from a year earlier.
Bauer AG slumped after the construction group posted a 2013 net loss of €19.4m, compared with a profit of €25.8m year earlier.
German steelmaker Salzgitter AG rallied after Citigroup upgraded the shares to 'buy' from 'neutral', citing construction-related demand in Europe.
Firstgroup declined after Nomura Holdings downgraded the bus-and-rail operator to 'neutral' from 'buy', citing increased costs and poor weather in the US in the first quarter.
Thales retreated after JPMorgan Chase downgraded the French defence-electronics maker to 'neutral' from 'overweight' following weaker-than-expected forecasts for sales and cost reduction through 2017-18.
Givaudan edged lower as comparable sales at its flavour division rose 5.8% in the first quarter, missing the 6.5% increase estimated by analysts.
Mediaset Espana slipped as it was suspended for the first hour of trading after Credit Suisse Group AG sold a 3.7% stake in the Spanish media company on behalf of Promotora de Informaciones SA.
The euro rose 0.06% to $1.3895.
Brent crude futures increased $0.241 to $107.720 per barrel, according to the ICE. |
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| | US Market Report | | US open: Sell-off continues as JPMorgan misses forecasts - JPMorgan reports 19 per cent drop in profits, misses forecasts
- Wells Fargo beats estimates as earnings rise
- US PPI picks up, confidence data rises
Dow Jones: -0.66%
Nasdaq: -0.87%
S&P 500: -0.60%
US stocks slipped on Friday after disappointing results from financial bellwether JPMorgan Chase & Co dampened stocks in the heavyweight banking sector.
Even Wells Fargo & Co was trading in the red despite beating estimates with its quarterly earnings.
The Dow Jones Industrial Average and S&P 500 fell 0.7% and 0.6% in early trading, respectively, while the Nasdaq was 0.9% lower as it continues to trade at levels not seen since early February.
The tech-heavy index slumped 3.1% on Thursday, its worst single-day percentage loss since late 2011, as investors continued to dump so-called 'momentum' stocks which have performed well over recent months. Concerns about steep valuations going into the new earnings season prompted traders to scale back their appetite for risk.
In economic news today, the annual rise in US producer prices picked up to 1.4% from 0.9% in February, compared with the 1.2% gain expected. Paul Dales, Senior US Economist at Capital Economics, said that this "could mark the start of a gradual upward trend that would eventually filter through into higher consumer price inflation".
Meanwhile, the University of Michigan consumer confidence index jumped to 82.6 in April from 80 last month, ahead of the 81 consensus forecast.
JPMorgan disappoints as Q1 earnings drop 19%
JPMorgan Chase & Co kicked off the bank earnings season on Wall Street by missing forecasts with its quarterly report, revealing that profits fell 19% due to lower revenue from its fixed-income trading and mortgage divisions. JPMorgan, the largest bank in the States, said earnings per share (EPS) totalled $1.28, down from $1.59 previously and well below the consensus forecast for EPS of $1.46. The stock was down around 4% in early trading.
Sector peer Wells Fargo & Co also fell, but fared a little better with losses of just 0.3% after unveiling a better-than-estimated 14% jump in first-quarter profits. EPS rose to $1.05 cents, up from 92 cents previous and ahead of the 97 cents prediction.
High-growth tech and internet stocks such as Google, Yahoo! and Netflix continued to fall today, extending losses after their recent sell-off. Facebook, however, inched higher as bargain hunters stepped in following a 15% slump over the past month as the stock retreated from a record high.
Corning retreated as the maker of glass for televisions and mobile devices was lowered to 'neutral' from 'buy' at UBS.
Zynga advanced as the social-games developer appointed David Lee, Senior Vice President of Corporate Finance at Best Buy, as Chief Financial Officer from April 14th.
West Texas Intermediate futures were up 0.05% at $103.45 a barrel on the NYMEX.
The yield on a 10-year US Treasury was down three basis points at 2.62%. |
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| | Broker Tips | | Broker tips: Fresnillo, WH Smith, Cairn Energy, Gambling stocks JPMorgan Cazenove has lifted its price target for Fresnillo from 965p to 1,030p and kept an 'overweight' rating, saying it continues to favour the Mexican precious metals producer over sector peer Hochschild ('neutral').
"We estimate Fresnillo should continue to enjoy lower average costs, aided by the high-quality Saucito II and San Julian projects. Over the next 10 years, we estimate an average all-in sustaining cost of $13.5/oz for Fresnillo, versus $19.2/oz for Hochschild."
Numis Securities has downgraded its rating on stationery and books retailer WH Smith from 'add' to 'hold', saying that it sees a "misty horizon" despite the company's broadly in-line first-half report.
"Visibility beyond [18 months] is perhaps less clear-cut and, given the significant (and deserved) re-rating of the stock in recent months, we move from 'add' to 'hold'," they said.
UBS has kept a 'neutral' rating on Scottish oil and gas group Cairn Energy after the "somewhat unexpected" departure of two high-level executives.
UBS said that the stock is now in "urgent need of frontier drilling success" ahead of the upcoming drilling of its two wells in Senegal, 'North Fan' and 'L' prospects, and the 'Gargaa' prospect in Morocco. "These offer company making upside, but well control is limited, the basins frontier, and likelihood of success low as a result."
It's hard to see any positive catalysts in the European gambling sector, according to JPMorgan Cazenove, which retained its cautious stance on stocks in light of regulatory risks. JPMorgan lowered its price targets for the majority of gambling stocks under its coverage.
The bank said that despite significant negative share prices moves since the start of the year - Ladbrokes and William Hill have dropped 25% and 18%, respectively – the European gambling sector still trades well above its long-term average on a price-to-earnings basis. "With UK regulatory uncertainty set to continue well into the second half of 2014 and minimal/negative earnings per share growth in 2015, we remain cautious," JPMorgan said. | | |
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