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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 day on a high after strong GDP growth - FTSE closes up 69.75 points at 6,769.91
- Q1 GDP rises 0.8 per cent
- Tensions ease in Eastern Europe
techMARK 2,791.25 +0.74%
FTSE 100 6,769.91 +1.04%
FTSE 250 15,896.64 +0.44%
It was an upbeat finish for UK stocks today, with financial companies leading the way on the back of strong UK gross domestic product (GDP) growth in the first quarter.
The FTSE 100 closed up 69.75 points at 6,769.91.
Also helping sentiment higher was an easing of the situation in Ukraine, which helped reassure investors that Russia will not cut off its gas supply.
CMC Markets's Jasper Lawler said: "The FTSE 100 made a new seven week high today with the M&A rumour mills still churning as Russian and Ukrainian troops pull back from the east of Ukraine.
"Separatists have gained control of more government buildings in Eastern Ukraine opening the way to further potential reaction from the Ukrainian military, but for now markets have focused elsewhere as both Ukrainian and Russian forces pulled back from the region."
Meanwhile, at 0.8%, first quarter GDP came in below expectations of a 0.9% quarter-on-quarter rise, but was still well received by the market. Mark Carney, the Bank of England Govenor, said it was evidence that the "recovery is starting to broaden".
However, Capital Economics observed that rise, which it expects to continue, "has come after two or three years of stagnation".
"Indeed, GDP in the first quarter was still below its pre-crisis peak. On the face of it, this suggests that there is more spare capacity in the UK than in the US, where GDP is more than 6% above its 2007 high. Looking ahead, the economic recovery in the UK also faces bigger constraints, including higher debt levels and a bigger fiscal squeeze.
"All of this is reflected in the relative outlook for inflation. We think price rises will slow to around 1% by the end of the year in the UK but rise above 2% in the US in the early part of next year."
In other UK macro news, the economic sentiment index (ESI) rose to 119.5 in April, from a reading of 112.8 the month before, the European Commission said.
The largest gains was seen in the sub-index for the retail trade sector, which jumped from 7.9 to 20.6, perhaps due to impact of the late Easter.
Contraction in Eurozone private sector credit deepens
Money supply in the Eurozone grew at a year-on-year pace of 5.6% during March, down from 6.2% in the previous period, according to data released by the European Central Bank (ECB).
The most widely followed measures of money supply slowed down to an annual rate of growth of 1.1%, after rising by 1.3% in the month before. The consensus estimate had been for a rise of 1.4%.
Elsewhere abroad, US stock markets have opened higher this afternoon on the back of better-than-expected corporate earnings, as investors took a positive stance ahead of a policy meeting at the Federal Reserve.
The Federal Open Market Committee kicks off its two-day policy meeting today and is widely expected to announce that it will continue tapering its asset purchase programme by $10bn each meeting. This will bring the monthly stock of bond buying down from $55bn to $45bn.
Financial stocks lifted by GDP data
Financial stocks were notable risers in today's session, with Legal & General, Hargreaves Lansdown, Standard Life and Standard Chartered all putting in decent gains, boosted in part by UK GDP growth of 0.8%.
Gas giant BG Group clawed back some of yesterday's heavy losses which came after it delivered a double blow to investors, announcing the departure of Chief Executive Chris Finlayson and warned its 2014 production levels would be at the lower end of expectations due to challenges in Egypt.
In the red was Fresnillo, with mining stocks in general trading slightly lower as metals prices weakened. Analysts at HSBC downgraded their ratings for BHP Billiton, Antofagasta and Anglo American to 'neutral' today.
Builders merchant Travis Perkins extended yesterday's losses, while G4S suffered from readacross from Serco, which dragged the second tier lower after issuing a fresh profit warning and indicating it may have to raise capital through a share placing just days before new Chief Executive Rupert Soames takes up his role. |
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FTSE 100 - Risers
Legal & General Group (LGEN) 212.90p +3.20%
Carnival (CCL) 2,370.00p +3.18%
Hargreaves Lansdown (HL.) 1,187.00p +3.13%
BG Group (BG.) 1,180.50p +3.01%
BP (BP.) 502.60p +2.92%
Standard Life (SL.) 386.00p +2.66%
Imperial Tobacco Group (IMT) 2,605.00p +2.16%
easyJet (EZJ) 1,663.00p +2.15%
Ashtead Group (AHT) 867.50p +2.06%
St James's Place (STJ) 779.00p +2.03%
FTSE 100 - Fallers
Fresnillo (FRES) 849.50p -1.74%
Travis Perkins (TPK) 1,720.00p -1.38%
Johnson Matthey (JMAT) 3,251.00p -1.10%
G4S (GFS) 236.90p -0.84%
Antofagasta (ANTO) 781.00p -0.83%
Wolseley (WOS) 3,390.00p -0.76%
AstraZeneca (AZN) 4,632.50p -0.73%
Barratt Developments (BDEV) 351.30p -0.71%
Shire Plc (SHP) 3,263.00p -0.70%
Capita (CPI) 1,055.00p -0.66%
FTSE 250 - Risers
Telecity Group (TCY) 728.00p +14.83%
Ocado Group (OCDO) 331.50p +4.51%
Afren (AFR) 153.30p +4.29%
Dechra Pharmaceuticals (DPH) 697.00p +4.19%
Ophir Energy (OPHR) 251.20p +4.06%
Cable & Wireless Communications (CWC) 53.40p +3.69%
Imagination Technologies Group (IMG) 199.50p +3.21%
Aveva Group (AVV) 1,955.00p +3.17%
Phoenix Group Holdings (DI) (PHNX) 693.00p +3.12%
ITE Group (ITE) 231.90p +3.07%
FTSE 250 - Fallers
Serco Group (SRP) 343.80p -15.01%
Inmarsat (ISAT) 735.50p -3.73%
Fidessa Group (FDSA) 2,295.00p -3.53%
Heritage Oil (HOIL) 255.60p -2.81%
Telecom Plus (TEP) 1,517.00p -2.44%
Renishaw (RSW) 1,852.00p -1.91%
UK Commercial Property Trust (UKCM) 81.05p -1.88%
Bodycote (BOY) 736.00p -1.80%
Daejan Holdings (DJAN) 4,801.00p -1.80%
AL Noor Hospitals Group (ANH) 1,011.00p -1.75% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks gain despite weak data, report say Russia pulling back - Reports Russian and Ukrainian troops pulling back
- NATO casts doubt on claims
- No QE for now, Draghi reportedly says
- Weak German CPI and Eurozone M3 numbers
FTSE-100: 1.04%
Dax-30: 1.46%
Cac-40: 0.83%
FTSE Mibtel 30: 2.15%
Ibex 35: 1.36%
Stoxx 600: 1.19%
European equities across the Continent saw sharp gains despite the release of some rather weaker-than-expected economic data releases and remarks attributed to European Central Bank (ECB) President Mario Draghi to the effect that QE is not on the table at the moment.
News that Russian and Ukrainian troops were pulling back from eastern Ukraine also lent a helping hand. However, other reports indicated that officials from NATO had cast doubt on the news of a Russian pull-back from Ukraine's borders, saying they had seen no sign of it.
The President of the ECB told German lawmakers this morning that a programme of quantitative easing is not imminent and remains relatively unlikely, according to Bloomberg, who cited an official who was present at the discussions.
However, the latest German regional consumer price (CPI) figures, out in the morning, came in lower than forecast across the board. Even so, as of Tuesday afternoon economists were maintaining their forecasts for the Eurozone CPI report due out on Wednesday (consensus: 0.8%).
The rate of money supply growth in the Eurozone – as measured by the M3 aggregate - slowed down to an annual rate of growth of 1.1%, after rising by 1.3% in the month before. Furthermore, the data revealed worsening trends in the amount of credit extended to the private sector within the single currency area.
For Barclays Research the above figures continue to argue in favour of targeted measures to encourage bank lending.
"The continuation of weak lending volumes therefore could indicate that bank loan supply constraints are now binding and may increasingly weigh on the recovery," it said.
Investors may have been gladdened by the possibility that the ECB may not yet be completely out of the picture.
Italian stocks led on the upside following strong readings on consumer confidence in the country. Give its energy dependence on Russian it was also stand to gain the most from a cooling of tensions in Ukraine, along with Germany.
Oil and bank stocks move higher
From a sector standpoint, and within the DJ Stoxx 600, the largest gains were seen in the following industry groups: Oil & Gas (2.23%), Banks (2.03%) and Construction&Materials (1.94%).
German financial giant Deutsche Bank revealed a 24% drop in first quarter profits. The lender said on Monday that it would issue a multi-currency bond of at least €1.5bn to help it strengthen its capital levels.
French drug-maker Sanofi unveiled lower-than-expected first-quarter earnings.
Spanish lender Santander announced an 8% rise in net profits for the first three months of the year to €1.3bn, slightly less than expected. It has also launched an offer to buy out the remaining 25% of its Brazilian unit which it does not already own.
Nokia stock gained on news that it has named a new Chief Executive Officer.
Crude changes course, rises
The euro/dollar fell back in late trading, towards 1.3810, after earlier having moved as high as 1.3870.
Front-month Brent crude futures advanced 1.08% to the $109.3/barrel mark on the ICE. |
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| | US Market Report | | US open: Stocks rise on earnings ahead of FOMC meeting - Merck, Sprint rise after earnings
- FOMC in focus as two-day meeting begins
- Consumer confidence falls, home prices rise
Dow Jones: 0.38%
Nasdaq: 0.26%
S&P 500: 0.30%
US stock markets opened higher on Tuesday on the back of better-than-expected corporate earnings, as investors took a positive stance ahead of a policy meeting at the Federal Reserve.
Companies such as Merck & Co and Sprint were rising after the opening bell, while Allergan rose on bid rumours as M&A speculation continues across the global pharmaceutical sector.
The Dow Jones Industrial Average, Nasdaq and S&P 500 were up 0.3-0.4% in early trading, but had all pared gains slightly within the first hour.
The Federal Open Market Committee kicks off its two-day policy meeting today and is widely expected to announce that it will continue tapering its asset purchase programme by $10bn each meeting. This will bring the monthly stock of bond buying down from $55bn to $45bn.
Analysts at Rabobank said it to be a case of "steady as she goes" at the central bank "given the Fed's tapering inertia and the apparent confirmation by recent data that the extreme winter weather was indeed responsible for much of the weakness in earlier data".
In economic news today, the Conference Board's US consumer confidence index declined to 82.3 in April, missing the 83.2 consensus forecast. Nevertheless, the prior month's figure was revised higher to 83.9, the index's highest reading since 2008.
Meanwhile, the S&P/Case-Shiller composite home price index, which measures house values in 20 metropolitan areas, rose at an annual rate of 12.9% in February, down from 13.2% growth the previous month but broadly in line with analysts' estimates.
Allergan rises on M&A speculation
Shares in Allergan gained on reports that the Botox maker contacted companies such as Sanofi and Johnson & Johnson to gauge others' interest before responding to last week's $46bn offer from Valeant Pharmceuticals. Bloomberg sources said that Allergan was making inquiries to see if a sale to a larger rival is possible.
Pharma peer Merck & Co rose strongly after saying that earnings rose 7% in the first quarter to 57 cents a share despite falling sales, beating the 52 cents estimate.
Telecoms group Sprint also impressed after narrowing losses in the first quarter to just four cents per share, from 21 cents the year before. Revenues edged higher from $8.8bn to $8.88bn, in line with estimates.
Fuel refiner Valero trounced analysts' forecasts for the first three months of the year, reporting earnings of $1.54 per share in comparison to estimates for $1.39.
West Texas Intermediate futures were 1.53% higher at $102.14 a barrel on the NYMEX.
The yield on a 10-year US Treasury was up two basis points at 2.72%. |
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| | Broker Tips | | Broker tips: BP, AstraZeneca, Serco, Telecity Investec kept a 'hold' stance on oil major BP, but said that the company's first-quarter trading update showed a 'solid start to the year'.
"We do not expect any major changes to either our forecasts or consensus. BP is trading broadly in line with the sector which, given current Russian risk, looks about right," Investec said.
Panmure Gordon has upgraded its recommendation for AstraZeneca from 'hold' to 'buy', saying that a potential takeover by US pharmaceutical peer Pfizer is likely.
Panmure said that a bid of 5,300-5,400p a share "may tempt AstraZeneca shareholders", compared with the tentative 4,661p-a-share approach that was rejected.
Cantor Fitzgerald has said that another profit warning from Serco is "highly concerning" and believes that the road to recovery is likely to be a long one for the outsourcing group.
"We have expressed our concern in recent research notes over the reputational impact of Serco's government woes. Yesterday's statement seems to vindicate our view and suggests that Serco's problems are more deeply rooted than previously expected," said Cantor Analyst Caroline de La Soujeole.
Numis Securities has maintained a 'buy' rating for Telecity after a strong first-quarter trading update from the Europe-focused data centre provider on Tuesday.
The broker, which left its target of 880p unchanged, said that the stock's valuations "don't look at all expensive if we can see a return to good levels of growth and high certainty in forecasts". | | |
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