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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: Ukraine developments ensure negative finish for FTSE - FTSE closes down 24.82 points at 6,678.18
- Ukraine developments weigh on sentiment
- UK retail sales come in ahead of forecasts
techMARK 2,747.90 -0.43%
FTSE 100 6,685.69 -0.26%
FTSE 250 15,888.21 -0.65%
UK stocks ended the week in the red, as developments in Ukraine weighed on sentiment and earnings reports out from both the UK and the States failed to provide a bid sufficient enough to boost sentiment.
The FTSE 100 closed down 24.82 points at 6,678.18.
Also providing a drag was Standard and Poor’s decision to downgrade Russia's credit rating to BBB-, which hit stocks in big player Germany, which relies heavily on its energy imports from Russia.
"The index has failed to reach the top of its range and reversed course around 9,600 yesterday," Jasper Lawler at CMC Markets noted. "Following a couple of weeks of gains, traders are taking profits wishing to avoid a weekend gap in price in case the situation in Ukraine gets even worse."
In the most recent news out from Ukraine, it was reported that Ukrainian leaders are going ahead with plans for a military operation against the pro-Russian separatists, although the main pro-Russian holdouts will not be targeted so as to avoid civilian casualties. Meanwhile, German Chancellor Angela Merkel has threatened additional sanctions against Russian officials. In parallel, several ex-Soviet republics - Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine - have called on Russia to withdraw its troops from the border areas near Ukraine, The Wall Street Journal reported.
UK retail sales come in ahead of forecasts
In today's macro news, it was revealed that UK retail sales volumes edged higher by 0.1% month-over-month in March, according to the Office for National Statistics, well above the 0.4% drop expected by analysts.
The previous month’s gain was revised lower, to show a rise of 1.3%, instead of the 1.7% gain originally thought. Even so, the year-on-year rise came in at 4.2%, also ahead expectations, which had been pointing to a rise of 3.8%.
Meanwhile, mortgage approvals fell back for the second month in a row in March, but higher credit card lending fuelled concerns that consumer borrowing is propping up the economic recovery.
Mortgage approvals for house purchases fell to 45,933 in March from 47,196 in February and a 76-month high of 48,940 in January, according to the British Bankers Association (BBA).
Pearson leads risers, while Tullow sits in last place
Bernstein Research helped educational publisher Pearson higher after it said it is set to cash in on a shake-up of education services in the US, in spite of taking a hit from currency volatility.
Bernstein says Pearson, which gets about 60% of its sales from the US, is likely to benefit from Common Core (CC), which aims to establish consistent and higher standards for graduating US high school students. CC has faced budgetary pressures following the 2008 financial crisis and its roll-out has been delayed, but Bernstein said it should spark a recovery in the new educational materials market.
Also on the up was William Hill, which punters have taken to the cleaners on soccer results, driving a 14% fall in the bookmaker's first quarter profit. The group said major wins for football punters led to two substantial loss-making weeks in the first three months of the year, hitting its gross win margins after a good performance last year.
Ashtead shares recovered from recent heavy falls - having lost 117p in the past three weeks - helped by Liberum Capital, which reiterated its 'buy' rating on the stock.
Meanwhile, it was disappointing news from Tullow Oil today, with the company revealing the Tapendar-1 exploration well in the C-10 licence, offshore Mauritania, has not encountered hydrocarbons. The well is being plugged and abandoned, after which the Stena DrillMax drill ship will leave Mauritania. Data from the Frégate-1 and Tapendar-1 wells will now be analysed and integrated into the seismic data previously acquired across Tullow's Mauritania acreage before the next well locations and timings are confirmed. |
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| | FTSE 100 - Risers
Pearson (PSON) 1,090.00p +3.81%
William Hill (WMH) 340.00p +2.07%
Ashtead Group (AHT) 863.00p +1.71%
Associated British Foods (ABF) 2,906.00p +1.43%
Travis Perkins (TPK) 1,788.00p +1.42%
BAE Systems (BA.) 401.90p +1.39%
Legal & General Group (LGEN) 207.60p +1.22%
BP (BP.) 493.50p +0.85%
Burberry Group (BRBY) 1,466.00p +0.83%
National Grid (NG.) 823.50p +0.80%
FTSE 100 - Fallers
Hargreaves Lansdown (HL.) 1,170.00p -3.47%
International Consolidated Airlines Group SA (CDI) (IAG) 400.00p -3.22%
Tullow Oil (TLW) 839.50p -2.50%
Mondi (MNDI) 978.50p -2.35%
Barratt Developments (BDEV) 360.20p -2.28%
AstraZeneca (AZN) 4,080.00p -2.28%
easyJet (EZJ) 1,661.00p -2.24%
Anglo American (AAL) 1,533.00p -2.14%
Royal Mail (RMG) 519.50p -1.80%
HSBC Holdings (HSBA) 602.50p -1.71%
FTSE 250 - Risers
Tate & Lyle (TATE) 704.00p +5.15%
Premier Oil (PMO) 326.70p +4.21%
Ophir Energy (OPHR) 243.30p +3.97%
Centamin (DI) (CEY) 64.55p +3.28%
Moneysupermarket.com Group (MONY) 183.50p +2.51%
Wetherspoon (J.D.) (JDW) 864.50p +1.71%
Ladbrokes (LAD) 138.70p +1.69%
African Barrick Gold (ABG) 253.90p +1.56%
JD Sports Fashion (JD.) 1,825.00p +1.39%
Ashmore Group (ASHM) 351.80p +1.35%
FTSE 250 - Fallers
Micro Focus International (MCRO) 758.00p -4.41%
Workspace Group (WKP) 576.00p -4.00%
Imagination Technologies Group (IMG) 190.30p -3.60%
Entertainment One Limited (ETO) 300.00p -3.57%
Big Yellow Group (BYG) 515.00p -3.47%
Ocado Group (OCDO) 331.50p -3.41%
Laird (LRD) 285.20p -3.39%
Man Group (EMG) 97.25p -3.33%
IP Group (IPO) 183.80p -3.26%
Euromoney Institutional Investor (ERM) 1,120.00p -3.11% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: German and Italian stocks shaken by Ukraine tensions - Kerry warns Russia against grave mistake
- Russian central bank unexpectedly hikes interest rates
- S&P cuts Russia’s long-term credit rating
- Fitch raises outlook on Spain’s long-term debt to BBB+
- Automobile stocks lead falls
FTSE-100: -0.27%
Dax-30: -1.54%
Cac-40: -0.80%
FTSE Mibtel 30: -1.73%
Ibex 35: -1.49%
Stoxx 600: -0.78%
European stocks finished the day with large falls come, following US Secretary of State John Kerry’s warning to Russia overnight that it would be making a “grave mistake” if it did not stop its provocations in Ukraine.
Late in the afternoon German Chancellor Angela Merkel threatened additional sanctions against Russian officials. In parallel, several ex-Soviet republics - Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine - have called on Russia to withdraw its troops from the border areas near Ukraine, The Wall Street Journal Europe reports.
Earlier in the day Ukrainian authorities indicated that their anti-terrorist operation will continue although they will not attempt to enter the heart of Slavyansk given the risk of unwanted civilian casualties.
Not to be missed amongst the tumult, the latest Japanese inflation data came in below forecasts. Consumer prices in Tokyo advanced at a 2.7% year-on-year pace in April, slightly less than the 2.8% clip expected by analysts.
After hitting an intraday high at 102.50 the dollar/yen ended the trading session lower at 102.24 possibly on safe haven flows linked to events in Ukraine, analysts at Sharecast pointed out.
Risk appetite may also have been restrained by the looming US FOMC meeting and US non-farm payrolls data due out next week, alongside a raft of economic data which is scheduled for release in all the main economic blocks.
Automobile stocks lead falls
From a sector standpoint, and within the DJ Stoxx 600, the largest falls were seen in the following industry groups: Automobiles&Parts (-1.94%), Banks (-1.69%) and Technology (-1.46%).
Volvo, the world’s number two truck maker unveiled a rise in quarterly core earnings which was in line with analysts’ expectations.
Finnish oil refiner Neste Oil was down after announcing first-quarter earnings per share of 12 euro cents, versus the 14 anticipated by the market.
Crude futures lower
The euro/dollar edged higher by 0.04% to 1.3840.
Front-month Brent crude futures were moving lower by 0.675% to the $109.57/barrel mark on the ICE. |
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| | US Market Report | | US open: Ukraine crisis hits stocks as earnings disappoint - Ukraine tensions rise as US threatens more sanctions
- Amazon.com, Visa, Ford fall sharply
- Consumer sentiment rises, Markit PMI falls
Dow Jones: -0.57%
Nasdaq: -0.93%
S&P 500: -0.39%
Heightened tensions between Russia and the West dampened US stocks on Friday, along with a host of disappointing corporate earnings and mixed economic data.
Wall Street heavyweights Amazon.com, Visa and Ford were all registering steep losses shortly after the 'opening bell' after missing estimates with their quarterly results.
The Dow Jones Industrial Average opened 0.6% lower, the Nasdaq fell 0.9%, while the S&P 500 declined 0.4%.
President Barack Obama said today that he would consult with European leaders about the ongoing turmoil in Ukraine and threatened Russia with more sanctions after Moscow ordered new military exercises along its border.
US Secretary of State John Kerry warned Russia yesterday of making an “expensive mistake” if it does not take steps to de-escalate the situation in Ukraine.
Standard & Poor's also downgraded its foreign and local currency rating for Russia on the back of capital outflows that put the country's economic growth at risk and warned that additional sanctions could result in a further downgrade.
Goldman Sachs was also dampening sentiment Stateside after cutting its forecast for US economic growth in the first quarter from 1.5% to 1%.
In economic data, the Thomson Reuters/University of Michigan’s consumer confidence index jumped to 84.1 in April, revised higher from the preliminary reading of 82.6 and March’s final figure of 80. Analysts had expected a smaller rise to 83.
However, Markit’s US services purchasing managers’ index (PMI) declined from 55.3 to 54.2 in April, surprising analysts who had expected a small rise to 55.5.
This pushed the composite PMI, which measures both the services and manufacturing sectors, down to 54.9 from 55.7 the month before.
Amazon.com, Visa, Ford
Online retail merchant Amazon.com dropped sharply today, registering losses of around 8%, after failing to impress with a better-than-expected 23% rise in first-quarter revenues. Earnings were in line with expectations but the company warned that spending on investments will probably result in a second-quarter operating loss.
Credit card group Visa dropped after missing second-quarter revenues and profits both missed consensus forecasts. The company said that a strong US dollar and tough comparatives from last year due to non-recurring items weighed on growth.
Ford also disappointed as the auto maker reported a drop in profits worse than expected, as it blamed safety recalls and weather-related costs.
West Texas Intermediate futures were down 0.7% at $100.70 a barrel on the NYMEX.
The yield on a 10-year Treasury was down one basis point at 2.66%. |
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| | Broker Tips | | Broker tips: Barclays, Smith & Nephew, Pearson, Ophir Investec has maintained a positive stance on Barclays, recommending investors to ‘buy’ the stock ahead of the bank’s first-quarter results and ‘Strategic Update’ next month.
“For a ‘cheap’ stock, you don’t actually need that much to drive a reasonable share price reaction. We think the ‘absence of negative surprises’ (as clearly indicated by yesterday’s AGM statement) coupled with (we hope) improved specificity around cost reduction and capital optimisation initiatives at the May 8th Strategic Update should combine to drive the shares back towards ‘fair value’.”
Credit Suisse has reiterated its ‘neutral’ recommendation for medical devices group Smith & Nephew, highlighting the pros and cons with the recent $13.35bn takeover of sector peer Biomet by Zimmer.
Credit Suisse said that Smith & Nephew could benefit from “turbulences” which are common to industry combinations such as the improved availability of experienced sales reps. “Longer term, however, we fear that the impact of relative size and cost disadvantages of SN compared to the leading reconstructive players might have negative effects.”
Bernstein Research says educational publisher Pearson is set to cash in on a shake-up of education services in the US, in spite of taking a hit from currency volatility.
Bernstein says Pearson, which gets about 60% of its sales from the US, is likely to benefit from Common Core, which aims to establish consistent and higher standards for graduating US high school students. CC has faced budgetary pressures following the 2008 financial crisis and its roll-out has been delayed, but Bernstein said it should spark a recovery in the new educational materials market.
UBS has upgraded Ophir Energy from ‘neutral’ to ‘buy’, saying that it sees some exploration upside after a tough year and a half for the company.
The bank said that the stock is “deeply out of favour…too deep”. It said that Ophir’s remaining exploration programme still has “company making upside”. | | |
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