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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 closes in positive territory, pharma stocks lead - FTSE closes up 56.51 points at 6,681.76
- Easter weekend retail sales disappoint
- Monthly US existing home sales down 0.4 per cent
techMARK 2,738.48 +2.18%
FTSE 100 6,681.76 +0.85%
FTSE 250 16,082.24 +1.10%
The FTSE 100 closed on an upbeat note today, having touched 6,700 earlier in the session as large returns in the pharmaceutical sector drove sentiment higher on the back of a mix of major deals and M&A speculation.
The top tier index closed up 56.51 points at 6,681.76, after having been shut since Thursday following the long Bank Holiday weekend.
IG's Chief Market Strategist, Brenda Kelly, said: "The UK market has come back to the fray in fine form today, rising on the back of merger and acquisition activity as it strains to put the volatility of April behind it. However, those with a longer-term view will be carefully eyeing the top end of the current trading range.
"Since mid-March we have bounced between 6500 and 6700 without establishing any real direction. The activity in the pharma sector is perhaps the first real sign of activity for a number of weeks, but even now 6700 is proving to be quite the hurdle."
Indeed, it is certainly not all good news, with UK retail numbers for the long weekend coming in notably worse than even 2013's cold and wet Easter, with analysts blaming the still-fragile nature of consumer confidence. Retail footfall was below 2013 figures across all destinations, with average footfall on Good Friday down 7.6%, and 8.7% on Easter Saturday, according to data from retail data company Springboard.
"People are clearly still very nervous about spending and these figures reveal the fragility of the recovery," said Springboard's Marketing and Insights Director, Diane Wehrle.
However, although High Street shops were competing with one of the coldest and wettest Easter weekends ever recorded in the country in 2013, numbers still fell 8.4% and 10.7% across the two days.
Over in the States the news was a bit more positive, with existing home sales down 0.4% month-on-month in March, to an annualised pace of 4.59m, dropping from the 4.6m clip observed in the month before, according to the National Association of Realtors (NAR). The consensus estimate had been for a print of 4.55m.
The lobby group pointed to rising prices and severe winter weather as the main causes behind the slip.
Reflecting on the broadly positive corporate earnings reports coming out from the US, Kelly predicted that we are now "only another modestly positive session away from seeing 16,600 once again on the Dow Jones", which she believes is "an indication perhaps that this remains a market that wants to go up".
Broker comment drives Shire into the top spot
Jefferies gave Shire a boost after it raised its target for the pharmaceuticals group from 3,400p to 3,550p and kept a 'buy' rating, saying that the recent share-price weakness has presented an "attractive buying opportunity". The broker trimmed its estimates due to "sluggish" first-quarter ADHD prescriptions trends in the States, but still believes that group earnings will growth at a "robust" 13% rate over 2013-2018.
GlaxoSmithKline (GSK) also jumped after announcing a massive three-part deal with Swiss pharmaceuticals peer Novartis, which will see shareholders receive a £4bn capital return. Killik maintained a 'buy' recommendation on GSK, saying that the deal will accelerate growth, provide cost savings and generate large returns.
AstraZeneca was rising strongly on speculation that Pfizer could make a takeover approach for the company, in a transaction valued in the region of £60bn, representing the biggest deal ever in the industry's history and the largest foreign takeover of a UK business on record.
While AstraZeneca reportedly rejected the informal offer, Analyst Andrew Baum from Citigroup said he expected Pfizer to "push aggressively ahead with a second approach".
US companies Eli Lilly and Allergan were also making headlines on the back of M&A speculation today.
Meanwhile, Babcock fell despite an upgrade from 'hold' to 'buy' from Investec.
Randgold, Fresnillo, Rio Tinto and Anglo American were all firmly in the red, hit by concerns about the Chinese economy, which suffered a slowdown in first quarter growth.
On the second tier index, telecoms provider Colt fell sharply after it said margin pressures chipped away at quarterly earnings as it warned full-year earnings before interest, taxes, depreciation, and amortisation (EBITDA) before restructuring charges are expected to range between 5% and 10% below current consensus estimates. |
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FTSE 100 - Risers
Shire Plc (SHP) 3,146.00p +7.56%
GlaxoSmithKline (GSK) 1,640.00p +5.20%
AstraZeneca (AZN) 3,960.00p +4.72%
Sports Direct International (SPD) 830.00p +3.88%
Hargreaves Lansdown (HL.) 1,247.00p +3.66%
William Hill (WMH) 332.40p +3.20%
Royal Mail (RMG) 522.00p +2.55%
Persimmon (PSN) 1,325.00p +2.55%
Weir Group (WEIR) 2,627.00p +2.50%
Experian (EXPN) 1,107.00p +2.41%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 4,605.00p -2.40%
Fresnillo (FRES) 848.00p -2.30%
Babcock International Group (BAB) 1,191.00p -2.06%
Standard Chartered (STAN) 1,311.50p -1.06%
Rio Tinto (RIO) 3,257.00p -0.96%
Ashtead Group (AHT) 900.50p -0.77%
Anglo American (AAL) 1,538.50p -0.55%
HSBC Holdings (HSBA) 614.90p -0.40%
Unilever (ULVR) 2,609.00p -0.31%
Tullow Oil (TLW) 865.00p -0.29%
FTSE 250 - Risers
Ocado Group (OCDO) 374.00p +6.80%
Worldwide Healthcare Trust (WWH) 1,288.00p +6.01%
Xaar (XAR) 900.00p +5.14%
Hikma Pharmaceuticals (HIK) 1,570.00p +4.95%
Moneysupermarket.com Group (MONY) 186.60p +4.89%
JD Sports Fashion (JD.) 1,817.00p +4.73%
Intermediate Capital Group (ICP) 450.80p +4.40%
Evraz (EVR) 94.90p +4.17%
BTG (BTG) 551.50p +4.15%
Heritage Oil (HOIL) 266.90p +4.01%
FTSE 250 - Fallers
COLT Group SA (COLT) 130.00p -10.16%
African Barrick Gold (ABG) 250.20p -3.44%
QinetiQ Group (QQ.) 217.50p -1.85%
Centamin (DI) (CEY) 52.90p -1.58%
EnQuest (ENQ) 126.60p -1.56%
PayPoint (PAY) 1,163.00p -1.44%
Spirent Communications (SPT) 96.60p -1.43%
Domino's Pizza Group (DOM) 516.00p -1.34%
Merlin Entertainments (MERL) 352.20p -1.15%
Britvic (BVIC) 739.00p -1.07% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks firm ahead of key manufacturing data - Stocks rise ahead of manufacturing data
- Market commentary downbeat on outlook for Ukraine
- Successful Spanish Treasury auction
- Nickel futures higher on Ukraine uncertainty
FTSE -100: 0.85%
Dax-30: 2.02%
Cac-40: 1.18%
FTSE Mibtel 30: 1.49%
Ibex 35: 1.41%
Stoxx 600: 1.38%
European stocks finished the session comfortably higher following a four-day break and ahead of tomorrow's Chinese and Eurozone manufacturing sector purchasing managers' indices.
Acting as a backdrop, travelling to Ukraine US Vice-President Joe Biden pledged his support for the Eastern European country. Although some analysts are sanguine, market commentary is insisting that the agreement reached last Thursday to de-escalate the situation in the country is now in danger after pro-Russian militants refused to abandon the government buildings which they have occupied in various cities.
An auction of Spanish T-Bills held early in the morning saw solid demand, with the country's Treasury selling €3.06bn in debt, slightly ahead of the €3bn which Madrid had been targeting.
France's Finance Minister reportedly stated that the latest set of growth forecasts due to be unveiled tomorrow will be in-line with the latest set of recommendations from the European Union.
As an aside, the European Central Bank's (ECB) Benoit Coeure told Le Monde that the monetary authority has further room to cut rates, with some market commentary interpreting the remarks as a sort of reiteration of previous 'forward guidance' from the ECB.
Notably, the US dollar/yen cross, widely accepted as a good gauge of risk appetite, rose and was changing hands at 102.74 by the end of trading.
Output in the Eurozone's construction sector recorded an expansion of 0.1% month-on-month in February, while the previous month's percentage variation was revised higher by a tenth of a percentage point to 1.6%, Eurostat reported.
Large returns on Healthcare Stocks
From a sector standpoint, the best performance was logged by companies in the following industrial groups: Healthcare (2.87%), Chemicals (2.31%) and Automobiles&Parts (2.15%).
Swiss drug-maker Novartis will purchase Glaxo's (GSK) oncology products unit for an aggregate cash consideration of $16bn. In parallel, it will sell a part of its vaccines business to GSK for $7.1bn. It will also hive off its animal health division to Eli Lilly for approximately $5.4bn.
Shares of Philips plummeted after the lighting company unveiled first-quarter earnings which came in well below forecasts due to the strength seen in the single currency.
Under an agreement reached on Saturday, Fiat Chrysler will begin to produce Jeep vehicles in China with partner Guangzhou Automobile Group.
Crude futures edge higher
The euro/dollar was edging higher by 0.03% to 1.3799.
Front month Brent crude futures were off by 1.085% to the $108.77/barrel mark on the ICE.
CAC 40 - Risers
Alstom (ALO) € 23.38 +3.50%
Renault (RNO) € 75.40 +2.77%
AXA (CS) € 18.93 +2.49%
Solvay (SOLB) € 115.50 +2.44%
Michelin (ML) € 93.62 +2.43%
Sanofi (SAN) € 77.29 +2.40%
Essilor International (EI) € 73.77 +2.30%
BNP Paribas (BNP) € 55.71 +2.24%
Air Liquide (AI) € 100.80 +2.09%
Cap Gemini (CAP) € 52.59 +2.02%
CAC 40 - Fallers
Publicis Groupe Sa (PUB) € 63.44 -0.70%
Danone (BN) € 52.58 -0.25%
EDF (EDF) € 28.97 -0.12%
Airbus Group N.V. (AIR) € 51.27 -0.12% |
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| | US Market Report | | - Large returns on Netflix corporate earnings impress
- Pharma M&A activity lifts sentiment
- US housing data slightly ahead of forecasts
Dow Jones: 0.43%
Nasdaq: 0.79%
S&P 500: 0.43%
US stocks opened positively on Tuesday on the back of upbeat corporate earnings and an increase in M&A activity.
The Dow Jones Industrial Average and S&P 500 were both 0.4% higher in morning trade, while the Nasdaq rose 0.8%.
Netflix was among the best performers on Wall Street early on after topping forecasts with its first-quarter results following the closing bell on Monday.
United Technologies, Comcast and Lockheed Martin were also on the up after their earnings impressed.
"Corporate earnings season is helping support stock markets right now despite the problems in the Ukraine failing to go away. Earnings season hasn’t really been that great so far but once again we’re seeing the bar being set very low, making it quite easy for companies to surprise on the upside," said Market Analyst Craig Erlam fromAlpari.
Meanwhile, a $47bn takeover offer for Botox maker Allergan and a number of large deals in the global pharmaceutical industry gave stocks in the sector a big boost today.
US firm Pfizer was continuing to make large returns on speculation that it could be launching a $100bn bid for British-Swedish peer AstraZeneca. Meanwhile, Swiss group Novartis announced a major three-part deal withGlaxoSmithKline.
In economic news today, existing US home sales fell by 0.2% to 4.59m in March but came in ahead of the 4.56m consensus forecast.
Meanwhile, the US house price index increased by 0.6% in February, up from a revised 0.4% rise the month before and better than the 0.5% increase expected.
Netflix, Allergan
The share price of video-streaming service Netflix jumped today after the company beat forecasts and said it would raise subscription prices for new members. Earnings guidance for the second quarter also came in ahead of forecasts.
Botox and breast implants group Allergan surged today after Valeant Pharmaceuticals launched a cash-and-stock bid valuing the company at $152.88 a share, equal to around $47bn.
Activist investor Bill Ackman, who has been building a near-10% stake in Allergan through hedge fund Pershing Square, supported the offer. Ackman said in a statement: "The combination of Valeant and Allergan represents the most strategic and value-creating transaction I have ever analysed."
Eli Lilly also announced today that it would buy Novartis' animal health division for $5.4bn in cash to expand its Elanco unit.
West Texas Intermediate futures were down 1.4% at $102.83 a barrel on the NYMEX.
The yield on a 10-year US Treasury was two basis points higher at 2.74%. |
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| | Broker Tips | | Broker tips: AstraZeneca, GlaxoSmithKline, Shire, Pets at Home Societe Generale has kept a 'sell' recommendation on AstraZeneca (AZN), questioning the reasoning behind a potential takeover by US pharmaceutical peer Pfizer.
Societe said: "In our view, given AZN's forecast revenue and earnings profile through 2018-2019 (an earnings decline until 2018), which is well appreciated, any company seriously wishing to acquire AZN would have to have a rose-tinted view of the cost-cutting potential from such a deal and a rose-tinted view of AZN's R&D pipeline potential."
Killik has maintained a 'buy' recommendation on GlaxoSmithKline, saying that the company's major three-part transaction with Swiss pharmaceuticals peer Novartis on Tuesday will accelerate growth, provide cost savings and generate large returns.
"We believe today's announcement is attractive, and the shares have responded positively as a result. The transaction will accelerate the group's strategy and substantially strengthens two of its core businesses.
Jefferies has raised its target for pharmaceuticals group Shire from 3,400p to 3,550p and kept a 'buy' rating, saying that the recent share-price weakness has presented an "attractive buying opportunity".
The broker trimmed its estimates due to "sluggish" first-quarter ADHD prescriptions trends in the States, but still believes that group earnings will growth at a "robust" 13% rate over 2013-2018.
Goldman Sachs has initiated coverage of Pets at Home (PAH) with a 'buy' rating, saying that it expects the company to grow sales and profit strongly over the next three years.
It also applauded PAH's "multi-faceted growth strategy", which includes the aggressive increase in the penetration of veterinary and grooming services within its stores. | | |
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