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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 extends gains ahead of FOMC statement - FTSE ends 10.12 points higher at 6,780.03
- US GDP misses expectations
- Focus very much of FOMC meeting statement
techMARK 2,780.50 -0.39%
FTSE 100 6,780.03 +0.15%
FTSE 250 15,817.20 -0.50%
UK indices ended today's session slightly higher following a raft of corporate announcements, mixed data from abroad as well as a number of stocks going ex-dividend.
The FTSE 100 closed 10.12 points higher at 6,780.03.
Gains were notably limited by nervousness ahead of this evening's policy decision by the US Federal Reserve, which has prompted many to scale back risk.
The Federal Open Market Committee began its two-day policy meeting yesterday and is widely expected to continue tapering its asset purchase programme by $10bn each meeting. This will bring the monthly stock of bond buying down from $55bn to $45bn.
This afternoon's focus was already on the US, as investors digested the latest gross domestic product (GDP) reading, which came in significantly below expectations.
GDP expanded at a 0.1% annualised clip during the first three months of the year according to the Commerce Department. The consensus estimate had been for a rise of 1.1%.
It followed an expansion of 2.6% in the last quarter of 2013 and 1.9% over all of last year.
Meanwhile, the MNI Chicago purchasing managers' index (PMI) for April printed at 63 points, accelerating sharply from last month's level of 55.9, compared to an expected reading of 57.
Eurozone inflation picks up but misses consensus
Eurozone inflation rose less than expected in April, according to the flash estimate published by Eurostat today.
The annual rate of consumer price inflation rose to 0.7% this month after prices rose by 0.5% in March. However, this compared to the consensus estimate for a 0.8% rise.
Nevertheless, some economists had said that the figure could miss forecasts after data on Tuesday showed that German inflation was lower than expected.
Back in the UK, it was estimated by the Office for National Statistics that around 1.4m people were employed on zero-hour contracts in January and February.
That compared to the figure of 583,000 - equal to 2% of the UK workforce - estimated for the period between October and December last year. The statistics also showed that those on zero-hour contracts, which do not guarantee a minimum number of working hours, were also employed in at least one other job.
Busy day for corporate earnings
Housebuilder Barratt Developments clawed back yesterday's losses, claiming its place in the top spot after Deutsche Bank named it as one of its top picks.
Oil major Royal Dutch Shell rose strongly as first-quarter underlying earnings fell by 3% but beat expectations. Bottom-line earnings, however, were hit by £2.9bn of impairments in its Downstream division.
Meanwhile, insurance group Admiral fell after going ex-dividend, along with a number of others including Tesco, Weir and Reed Elsevier.
The strength of sterling had a big impact on results at GlaxoSmithKline (GSK) in the first quarter, while sales fell short of analysts' expectations due to weakness in the US market, prompting shares to slide. Core turnover during the first three months of the year dropped by 10% on a reported basis to £5.61bn, with sales dampened by a stronger pound against the dollar, euro, yen and a range of emerging market currencies.
On the second tier, shares in Heritage Oil surged today after the company announced that it had received a takeover offer from Energy Investments Global, part of Qatar's Al Mirqab Capital. The company also reported its full-year results which unveiled that profits doubled in 2013 on the back of record production from its flagship OML 30 lock in Nigeria.
Ladbrokes also climbed after saying it would maintain its dividend payment, despite posting a decline in its first-quarter operating profit. The confirmantion underlines the bookmaker's belief it will return to growth in the second half of the year.
Strong performances in Asia and its casino business drove total quarterly revenues higher at Playtech in the first three months of 2014, lifting shares higher. The online gaming software supplier said a group revenue increase of 17.4% from €87.5m to €102.7m was largely thanks to a quarterly Casino revenue rose 25.6% from €44.1m to €55.4m.
Meanwhile, technology group CSR shares fell sharply after its first-quarter revenue fell 24% to $180.8m.
Home Retail failed to impress despite reporting a return to annual sales and profit growth thanks to like-for-like improvements at both Argos and Homebase. However, including exceptional items, statutory pre-tax profits fell 41.1% mainly due to restructuring charges at Argos and a payment protection insurance provision. |
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| | FTSE 100 - Risers
Barratt Developments (BDEV) 369.50p +5.18%
Royal Dutch Shell 'B' (RDSB) 2,520.00p +3.66%
Shire Plc (SHP) 3,378.00p +3.52%
WPP (WPP) 1,274.00p +3.07%
Royal Dutch Shell 'A' (RDSA) 2,347.00p +2.94%
Capita (CPI) 1,085.00p +2.84%
Rolls-Royce Holdings (RR.) 1,050.00p +2.84%
Anglo American (AAL) 1,582.00p +2.56%
William Hill (WMH) 354.70p +2.16%
Smiths Group (SMIN) 1,335.00p +1.91%
FTSE 100 - Fallers
Tesco (TSCO) 292.95p -3.41%
Admiral Group (ADM) 1,398.00p -3.05%
British American Tobacco (BATS) 3,417.00p -2.01%
GlaxoSmithKline (GSK) 1,632.00p -2.01%
ARM Holdings (ARM) 891.50p -1.93%
Imperial Tobacco Group (IMT) 2,557.00p -1.84%
Standard Chartered (STAN) 1,281.50p -1.80%
Hammerson (HMSO) 570.50p -1.64%
easyJet (EZJ) 1,637.00p -1.56%
Centrica (CNA) 330.00p -1.49%
FTSE 250 - Risers
Heritage Oil (HOIL) 315.20p +23.32%
Aveva Group (AVV) 2,108.00p +7.83%
Ladbrokes (LAD) 153.30p +6.90%
Ophir Energy (OPHR) 263.60p +4.94%
Playtech (PTEC) 667.00p +4.46%
Soco International (SIA) 432.10p +3.25%
Bellway (BWY) 1,439.00p +2.86%
Afren (AFR) 157.50p +2.74%
Henderson Group (HGG) 250.80p +2.70%
Taylor Wimpey (TW.) 105.10p +2.44%
FTSE 250 - Fallers
CSR (CSR) 574.50p -10.44%
Hansteen Holdings (HSTN) 102.90p -4.72%
IP Group (IPO) 172.00p -4.44%
Spirent Communications (SPT) 95.15p -4.18%
Oxford Instruments (OXIG) 1,289.00p -4.16%
Hunting (HTG) 846.50p -3.97%
SIG (SHI) 191.50p -3.82%
Polymetal International (POLY) 566.00p -3.74%
Fisher (James) & Sons (FSJ) 1,291.00p -3.73%
Xaar (XAR) 789.00p -3.72% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: ECB has left work to do, economists say - ECB has work left to do economists say
- Eurozone inflation figures come in below forecasts
- Traders in holding pattern ahead of FOMC meeting
FTSE-100: 0.15%
Dax-30: 0.20%
Cac-40: -0.23%
FTSE Mibtel 30: -0.88%
Ibex 35: -0.02%
Stoxx 600: -0.07%
Equity markets ended the day in a mixed fashion ahead of this evening's Federal Reserve policy meeting. Focusing investors' attention was the release of the latest Eurozone consumer prices figures.
Eurozone consumer prices rose by 0.7% year-on-year in April, a tenth of a percentage point less than had been forecast by consensus.
Capital Economics highlighted the very low readings on core goods prices, excluding energy. In their opinion that merits action on the part of the ECB.
"Accordingly, we still believe that the ECB has more work to do to eradicate the risk of a damaging bout of deflation in the Eurozone," the think-tank said.
Also of interest, the results of the latest ECB bank lending survey showed a broad increase in demand for loans albeit while the actual flow of lending remained depressed.
Hence, Barclays Research reiterated its call that the ECB will pursue "targeted" measures to help get credit flowing.
Those may include a longer-term refinancing operation targeted towards encouraging bank lending to small-and-medium-sized enterprises (SMEs) or an asset backed securities (ABS) purchase programme, supported by the necessary regulatory changes aimed at revitalising high-quality securitisation in Europe.
Acting as a backdrop, Ukraine's acting President warned that the spread of unrest must be prevented.
In parallel, the International Monetary Fund (IMF) slashed its forecast for Russia's economic growth this year to just 0.2% from 1.3% beforehand, adding that the country should prepare for a further contraction.
Retail stocks lead losses
From a sector standpoint, and within the DJ Stoxx 600, the largest losses were being seen in the following industry groups: Real estate (-0.91%) and Utilities (-0.82%).
France's Alstom is reviewing a binding offer from US industrial conglomerate General Electric for its energy business, but it has left the door open for a competing bid from Germany's Siemens. The shares shot 12% higher after a trading halt was lifted.
BNP Paribas may be facing a fine in the US well in excess of $1.1bn, the lender warned.
Spain's BBVA posted a 64% drop in first quarter net profits to €624m, largely due to the sale of assets one year ago, making for more challenging comparisons.
German car-maker Daimler unveiled first quarter operating profits that doubled.
Euro edges higher
The euro/dollar was 0.41% higher at 1.3870.
Front-month Brent crude futures were off by 1.029% to the $107.88/barrel mark on the ICE. |
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| | US Market Report | | US open: Stocks fall on lacklustre US GDP as investors await Fed - FOMC policy decision in focus
- ADP payrolls beat forecast
- US GDP expands just 0.1 per cent in Q1
- Twitter, eBay provide a drag
Dow Jones: -0.04%
Nasdaq: -0.74%
S&P 500: -0.24%
US stocks opened slightly lower on Wednesday on the back of mixed economic data as investors scaled back risk ahead of the Federal Reserve policy decision later on.
The Federal Open Market Committee began its two-day policy meeting on Tuesday and is widely expected to continue tapering its asset purchase programme by $10bn each meeting. This will bring the monthly stock of bond buying down from $55bn to $45bn.
The Dow Jones Industrial Average was trading 0.04% down early on, the S&P 500 lost 0.24%, while the Nasdaq dropped 0.74%.
Markets were reacting to figures released before the opening bell that showed that while private-sector jobs grew at their fastest pace in five months, US economic growth was at its weakest in three years.
Private-sector payrolls as measured by ADP increased by 220,000 last month, up from 209,000 in March and ahead of the 200,000 gain expected by analysts.
However, gross domestic product expanded at an annual rate of just 0.1% in the first quarter, a sharp slowdown from the 2.6% growth registered in the fourth quarter of 2013 and well below the 1% expansion expected by analysts.
"Since the equity market is hardly in freefall as a result of the number, investors might take solace from the crowd that the consequences of the event aren't yet biting. But the session is far from over yet, and traders will likely be more vigilant of taking on risk today than most others, waiting to see how flows direct prices," said Trader David White from Spreadex.
Twitter shares tumble as user growth slows
Twitter's share price sunk as much as 12% after the social media messaging service disappointed investors with subdued user number growth in the first quarter. Despite beating analysts' forecasts, the company reported that membership rose at an annual rate of 25% to 255m in the first three months of the year, a slowdown from the 30% growth seen in the previous period.
E-commerce group eBay also beat analysts' estimates but saw shares sink after disappointing with its outlook. The company forecast a smaller-than-expected profit for the second quarter and reported a $3bn tax charge to repatriate foreign earnings.
Nuclear plant operator Exelon fell after announcing that it will acquire Pepco, the utility group, for $27.25 a share, equal to $5.4bn. Shares in the latter surged after the bell.
Pharmacy group Express Scripts dropped as it slashed its 2014 forecasts and released lower-than-expected adjusted profits for the first quarter.
West Texas Intermediate futures were 1.54% lower at $99.72 a barrel on the NYMEX.
The yield on a 10-year US Treasury was down two basis points at 2.67%. |
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| | Broker Tips | | Broker tips: Next, Tullow, British American Tobacco... Shares in Next are up with events, according to Investec, despite a better-than-expected first-quarter update and raised guidance from the high street retail group on Wednesday.
"We view Next as a core holding, but with the shares trading on a sector average price-to-earnings rating, we believe the valuation is up with events and retain our 'hold' recommendation."
Prime Wealth Group has labelled Tullow Oil as a 'buy', saying that Wednesday's production update and asset sales mark a 'turning point' for the shares.
"Tullow Oil shares have effectively been falling steadily since mid 2012 highs around 1,500p, as unsuccessful drilling campaigns and other hitches put an end to a long bull run for the explorer. Today however, most of the uncertainty has been removed by the sale of the Schooner and Ketch gas fields, enabling the group to redouble focus on its Kenya successes, and put the group on a strong financial footing."
Panmure Gordon has upgraded British American Tobacco (BAT) from 'hold' to 'buy', saying it sees an improving performance in the second half from the company. The broker has hiked its target for the stock from 3,225p to 3,850p.
"During the second half, currency headwinds are likely to ease in and pricing should accelerate contributing good underlying earnings growth."
Analysts predict BSkyB's new broadband customer numbers will fall around 50% in the third quarter, as the company's battle with BT takes a continuing toll. The media group is due to report its results for the three months to the end of March on Thursday.
Analysts at Deutsche Bank and Morgan Stanley (MS) respectively forecast broadband additions of 80,000 and 70,000, down from 152,000 in the same quarter last year and compared to 110,000-119,000 in the last three quarters.
Credit Suisse has reiterated its 'overweight' position on the big-cap pharmaceuticals sector, saying that 25% of M&A deals in the year to date have been from the sector.
"From a macro perspective, drugs have the best combination of low leverage (thus outperform if the US cost of debt rises), dollar earners (we are dollar bulls) and low global emerging market (GEM) exposure (22%) within defensives - and unlike staples GEM exposure trades on a discount to developed markets." | | |
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