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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 open: Diageo leads stocks lower ahead of Easter weekend - Ukraine crisis in focus as leaders meet in Geneva
- US data, corporate earnings closely watched
- Diageo drops as weak Q3 dampens growth
techMARK 2,653.18 +0.06%
FTSE 100 6,565.34 -0.29%
FTSE 250 15,771.90 +0.16%
UK stocks fell on Thursday morning as investors adopted a cautious stance ahead of the four-day weekend amid ongoing turmoil in Ukraine.
Diageo was weighing heavily on markets in London early on after the beverages group reported a decline in sales in the third quarter.
The FTSE 100 was trading around 0.3% lower at 6,565 in early trading.
Markets will be closed for Good Friday and Easter Monday so volumes are likely to remain low over the course of the session, according to analysts.
"Global indices seem undecided as to whether they are actually ready to start moving back towards the highs seen back in February or else continue to correct lower which has been a running theme of the past fortnight," said Research Analyst Joshua Mahony from Alpari UK.
Talks in Geneva between the US, Russia and Ukraine and the EU will be high on the agenda for global financial markets today, but the potential for more aggressive sanctions on Moscow may be limited given warnings from blue chip firms that they could affect business.
Companies such as German chemical group BASF, Italian energy firm Eni and British oil major BP have all expressed their caution to governments about the fall-out from tougher sanctions and any possible retaliation from the Kremlin.
Tensions along the eastern border of Ukraine have escalated in recent days due to the occupation of government buildings by pro-Russian militants. Three pro-Russian separatists were reportedly killed overnight, according to Ukraine's Interior Minister.
US stocks closed higher for the third day in a row on Wednesday as positive data from the Federal Reserve's 'Beige Book', which showed receding winter snow had revealed buds of economic activity in 10 out of its 12 regions across the country. Fed Chair Janet Yellen also said in a speech that the central bank is committed to keep its accommodative stance.
Crowd-pleasing earnings from stocks such as Yahoo! and Intel also helped to lift sentiment on Wall Street. However, Google tumbled in after-hours trading as first-quarter revenue and earnings fell short of analyst expectations, with paid clicks also declining from the last quarter of 2013.
Economic data is likely to be on the light side today, with few major indicators due for release. Initial jobless claims and the Philadelphia Fed manufacturing index will be in focus later on for US markets.
Meanwhile, US corporate earnings will be in focus with a number of heavyweights including Morgan Stanley, Goldman Sachs, Honeywell, Baker Hughes and General Electric due to report.
Diageo sinks as sales falter
Year-to-date organic revenue growth at Diageo has been held back by a sales decline in the third quarter due to weakness across many emerging markets, causing shares to drop this morning. The company, famous for brands such as Captain Morgan, Smirnoff and Guinness, said that organic net sales fell by 1.3% in the three months to March 31st. As a result, overall growth over the first nine months of Diageo's financial year was just 0.3%, down from 2% in the first half.
Residential development group Taylor Wimpey rose after saying that the UK housing market remains buoyant as demand continues to be boosted by the more accessible and affordable mortgage market.
RSA Insurance gained after selling off its Baltics and Polish businesses as newly-appointed Chief Executive Stephen Hester attempts to turn around the embattled insurer. The FTSE 100 group has reached agreement in four transactions, which if they complete will reap a total cash consideration of approximately €360m (£300m).
Royal Dutch Shell edged higher following an exploration discovery offshore Malaysia. The Rosmari-1 well, located 135km offshore in Block SK318, encountered more than 450 metres of gas column after being drilled to a total depth of 2,123 metres.
Luxury handbag and fashion group Mulberry fell sharply after it issued a new profit warning, its fourth in two years, as it battles against dwindling sales and increased competition. Larger high-end peer Burberry, which impressed the market with a second-half trading update yesterday, fell in sympathy this morning. |
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| FTSE 100 - Risers
RSA Insurance Group (RSA) 95.10p +2.70%
ITV (ITV) 184.00p +2.22%
ARM Holdings (ARM) 943.00p +1.18%
Barratt Developments (BDEV) 368.90p +1.07%
Whitbread (WTB) 3,940.00p +1.03%
Sports Direct International (SPD) 795.50p +1.02%
Admiral Group (ADM) 1,355.00p +0.97%
Legal & General Group (LGEN) 209.70p +0.91%
BT Group (BT.A) 365.10p +0.86%
St James's Place (STJ) 764.50p +0.86%
FTSE 100 - Fallers
Diageo (DGE) 1,819.00p -4.26%
Fresnillo (FRES) 861.00p -2.60%
Burberry Group (BRBY) 1,437.00p -1.98%
Unilever (ULVR) 2,581.00p -1.56%
GlaxoSmithKline (GSK) 1,545.00p -1.18%
SABMiller (SAB) 3,006.50p -1.17%
Rio Tinto (RIO) 3,268.00p -1.13%
Tesco (TSCO) 290.80p -1.02%
William Hill (WMH) 317.50p -1.00%
BHP Billiton (BLT) 1,890.50p -0.99%
FTSE 250 - Risers
Bank of Georgia Holdings (BGEO) 2,638.00p +4.06%
PayPoint (PAY) 1,184.00p +2.33%
Thomas Cook Group (TCG) 167.20p +1.89%
Redrow (RDW) 290.40p +1.75%
Ocado Group (OCDO) 339.50p +1.65%
Fenner (FENR) 393.30p +1.50%
Heritage Oil (HOIL) 256.40p +1.42%
WH Smith (SMWH) 1,101.00p +1.38%
Mitchells & Butlers (MAB) 451.80p +1.32%
Partnership Assurance Group (PA.) 128.80p +1.26%
FTSE 250 - Fallers
Synergy Health (SYR) 1,211.00p -3.04%
Polymetal International (POLY) 602.50p -1.95%
Debenhams (DEB) 79.90p -1.36%
Vedanta Resources (VED) 905.50p -1.25%
Hunting (HTG) 832.50p -1.25%
Petra Diamonds Ltd.(DI) (PDL) 148.30p -1.13%
COLT Group SA (COLT) 143.30p -1.10%
Diploma (DPLM) 676.50p -1.10%
Kazakhmys (KAZ) 236.00p -1.09% |
| | UK Event Calendar | | Thursday April 16th
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
Initial Jobless Claims (US) (13:30)
New Car Registrations (EU) (10:00)
Philadelphia Fed Index (US) (15:00)
Producer Price Index (GER) (07:00)
Index Tertiary Activity (JP) (08:50)
Reuters Tankan business confidence survey (08:30)
ANNUAL REPORT
DRS Data & Research , Henry Boot, Tarsus Group
IMSS
Diageo, Ferrexpo, Lavendon, NCC, Taylor Wimpey
AGMS
Aberdeen Smaller Companies High Income Trust, Belvoir Lettings, Carnival, Lavendon Group, Maintel Holdings, Taylor Wimpey
FINAL DIVIDEND PAYMENT DATE
Law Debenture Corp., Low & Bonar, Sinclair (William) Holdings
Q1
Eurasia Drilling Co Ltd GDR (Reg S), Schlumberger Ltd. |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: France on the road to recovery after policy measures - France unveils new spending cuts
- Yellen says Fed will remain accommodative
- Ukraine talks begin in Geneva
FTSE 100: -0.16%
DAX: -0.14%
CAC 40: 0.02%
FTSE MIB: 0.04%
IBEX 35: -0.03%
Stoxx 600: -0.09%
European stocks were little changed after France unveiled measures to cut spending in an effort to repair public finances.
French Prime Minister Manuel Valls yesterday revealed he plans to save €50bn between 2015 and 2017 by reducing spending on welfare benefits, a politically sensitive area.
It includes freezing benefit and pension payments at current levels for the next year. A freeze in the basic pay of civil servants will also continue, Valls said.
He noted that public spending represents 57% of national wealth, adding that "we can't live beyond our means".
"Although France's short-term outlook remains weak, the new French Government's recent policy announcements provide hope that France is slowly tackling its significant competitiveness problems," Capital Economics said.
"[…] France is on the road to recovery, but it is in the slow lane. The Eurozone's second largest economy will provide only modest support for its even weaker neighbours such as Spain and Italy."
Yellen
Federal Reserve Chair Janet Yellen said the central bank is committed to maintaining an appropriate level of monetary accommodation to support the country's economic recovery.
Speaking at the Economic Club of New York after European markets closed yesterday, she said investors should look for shortfalls in both inflation and the jobless rate for indications on the Federal Open Market Committee's decision on the federal-funds rate. The Fed's next policy meeting is on April 29-30th.
The central bank's Beige Book business survey was released overnight, showing that eight of its 12 districts experienced "modest or moderate" growth based on reports gathered before April 7th.
Today in the US will be the release of the initial jobless claims report which is expected to come in at 315,000 for the week ended April 12th, compared to 300,000 claims a week earlier.
Talks on Ukraine begin
Talks in Geneva between the US, Russia and Ukraine and the European Union will be high on the agenda for global financial markets today.
However, the potential for more aggressive sanctions on Moscow may be limited given warnings from blue chip firms that they could affect business.
Companies such as German chemical group BASF, Italian energy firm Eni and British oil major BP have all expressed their caution to governments about the fall-out from tougher sanctions and any possible retaliation from the Kremlin.
Tensions along the eastern border of Ukraine have escalated in recent days due to the occupation of government buildings by pro-Russian militants. Three pro-Russian separatists were reportedly killed overnight, according to Ukraine's Interior Minister.
SAP, Akzo
SAP AG declined after Germany's biggest technology company reported quarterly sales and earnings that missed analysts' estimates.
Actelion advanced after the bio-pharmaceutical company said it may review its earnings forecasts after reporting better-than-estimated quarterly profits.
Akzo Nobel NV dropped after posting first quarter revenue that fell short of forecasts.
Thomas Cook gained after Standard & Poor's raised its outlook on the tour operator from 'stable' to 'positive', citing the progress in its transformation strategy.
The euro rose 0.19% to $1.3842.
Brent crude futures fell £0.009 to $109.590 per barrel, according to the ICE. |
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| | US Market Report | | US close: Stocks finish higher for third day, Google plummets after hours - Google plummets after-hours as Q1 disappoints
- Yahoo! impresses with quarterly earnings
- Fed's beige book shows growth in 10 of 12 districts
- Housing starts, building permits miss forecasts
- Industrial production exceeds estimates
Dow Jones: 1.00%
Nasdaq: 1.29%
S&P 500: 1.05%
US stocks closed higher for the third day in a row on Wednesday as positive data from the Federal Reserve's 'beige book' and crowd-pleasing earnings from stocks such as Yahoo!
In after-hours trading, Google tumbled 6.2% in the first 20 minutes as first-quarter revenue and earnings fell short of analyst expectations, with paid clicks also falling from the last quarter of 2013.
Google reported adjusted earnings up 1.3% to $6.27, just shy of $6.33 a share broker consensus, as revenues grew 19.1% to $15.42bn, with analysts expecting $15.58bn. A year earlier, the company reported per-share earnings of $6.19 on revenue of $12.95 billion
Paid clicks, which include clicks related to adverts shown on Google's own websites and other sites using its technology, fell 1% on the preceding quarter but rose about 26% compared to the same period a year earlier. Analysts at RBC Capital Markets were expecting a 33% year-on-year increase.
Looking back at the day's index performances, the Dow Jones Industrial Average finished 1.0% higher, the S&P 500 closed 1.05% highter and Nasdaq rose 1.29%.
However, some traders were sitting slightly less comfortably as news emerged that the New York Attorney General sent its first wave of subpoenas to about a half-dozen high-frequency trading firms as part of an investigation into possible unfair advantage these firms have over rivals, according to The Wall Street Journal which quoted to a person familiar with the investigation.
The wider US economy looked to be on a solid footing, as the Federal Reserve opened its Beige Book and showed receding winter snow had revealed buds of economic activity in 10 out of its 12 regions across the country.
Federal Reserve Chair Janet Yellen also told the Economic Club of New York that forecasts calling for a return to full employment and stable prices by the end of 2016 is plausible.
There was disappointing data from the US home construction market though, with housing starts rising less than expected and building permits falling sharply in March. Industrial production, however, expanded by more than predicted last month.
Privately-owned housing starts rose 2.8% to a seasonally-adjusted annual rate of 946,000 last month. This was higher than the upwardly revised 920,000 rate in February but well under the 970,000 consensus forecast.
Meanwhile, forward-looking building permits fell 2.4% to 990,000 in March, compared with a downwardly revised 1.014m in February. Analysts had expected little change over the month.
US mortgage, however, rose by 4.3% in the week ended April 11th, rebounding strongly after a 1.6% fall a week earlier, according to the Mortgage Bankers' Association.
Industrial production in the States increased by 0.7% in March, down from an upwardly revised 1.2% gain the month before but ahead of the 0.5% forecast.
Internet portal Yahoo closed up 6.2% to $36.35 as first-quarter results were buoyed by strongly sales at Chinese e-commerce group Alibaba, in which it holds a 24% stake. Non-GAAP earnings per share (EPS) were flat year-on-year at 38 cents over the three months to March 31st, but ahead of the 37 cents estimate. Adjusted revenue rose by a better-than-expected 1% to $1.09bn.
Biotech Regeneron Pharmaceuticals rose 4.2% on the day to $300.14 thanks in part to a bullish initiation note from broker Canaccord Genuity, which included a price target of $350.
Amsterdam-headquartered mobile telephone network VimpelCom rose 4.2% to $8.29 after successfully reorganising its banking arrangements. The Russia- and Italy-focused group has a new revolving-credit facility of up to $1.8bn with a three-year tenure from 11 different banks.
Circuits maker Linear Technology Corp shed 4.4% to $45.07 as sales growth was softer than expected, even though earnings were at least as good as forecasts.
S&P 500 - Risers
Yahoo! Inc. (YHOO) $36.35 +6.22%
Delta Airlines Inc. (DAL) $33.63 +5.37%
Valero Energy Corp. (VLO) $55.92 +4.39%
Ingersoll Rand Ltd. (IR) $57.99 +4.35%
Regeneron Pharmaceuticals Inc. (REGN) $300.14 +4.19%
Interpublic Group of Companies Inc. (IPG) $16.98 +4.17%
Frontier Communications Co. (FTR) $5.87 +3.89%
Iron Mountain Inc. (IRM) $27.27 +3.83%
Priceline Group Inc (PCLN) $1,212.25 +3.63%
Pitney Bowes Inc. (PBI) $25.47 +3.58%
S&P 500 - Fallers
Linear Technology Corp. (LLTC) $45.07 -4.37%
Aetna Inc. (AET) $69.89 -2.43%
Cliffs Natural Resources Inc. (CLF) $18.69 -2.40%
Transocean Ltd. (RIG) $40.57 -2.22%
Best Buy Co. Inc. (BBY) $24.47 -2.12%
NetApp Inc. (NTAP) $36.24 -2.04%
Analog Devices Inc. (ADI) $52.15 -1.94%
St Jude Medical Inc. (STJ) $62.03 -1.88%
CSX Corp. (CSX) $27.78 -1.80%
Tenet Healthcare Corp. (THC) $38.75 -1.75%
Dow Jones I.A - Risers
Visa Inc. (V) $209.37 +2.61%
3M Co. (MMM) $136.75 +1.98%
United Technologies Corp. (UTX) $118.05 +1.91%
Walt Disney Co. (DIS) $78.94 +1.65%
Microsoft Corp. (MSFT) $40.40 +1.64%
American Express Co. (AXP) $87.40 +1.58%
Goldman Sachs Group Inc. (GS) $157.29 +1.53%
Boeing Co. (BA) $126.02 +1.41%
Exxon Mobil Corp. (XOM) $99.93 +1.27%
Chevron Corp. (CVX) $121.82 +1.26%
Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $78.18 -1.67%
Johnson & Johnson (JNJ) $98.75 -0.45%
International Machines Corp. (IBM) $196.34 -0.35%
McDonald's Corp. (MCD) $100.82 -0.01%
Nasdaq 100 - Risers
Yahoo! Inc. (YHOO) $36.35 +6.22%
Regeneron Pharmaceuticals Inc. (REGN) $300.14 +4.19%
Vimpelcom Ltd Ads (VIP) $8.29 +4.15%
Illumina Inc. (ILMN) $136.22 +3.95%
Priceline Group Inc (PCLN) $1,212.25 +3.63%
Equinix Inc. (EQIX) $179.83 +3.27%
Google Inc. (GOOGL) $563.90 +2.90%
Starbucks Corp. (SBUX) $70.79 +2.76%
Tesla Motors Inc (TSLA) $199.05 +2.65%
Sirius XM Holdings Inc (SIRI) $3.17 +2.59%
Nasdaq 100 - Fallers
Linear Technology Corp. (LLTC) $45.07 -4.37%
NetApp Inc. (NTAP) $36.24 -2.04%
Analog Devices Inc. (ADI) $52.15 -1.94%
Mattel Inc. (MAT) $37.88 -1.51%
Staples Inc. (SPLS) $11.89 -1.49%
Maxim Integrated Products Inc. (MXIM) $31.77 -1.40%
Texas Instruments Inc (TXN) $45.21 -1.31%
Xilinx Inc. (XLNX) $51.43 -0.81%
Whole Foods Market Inc. (WFM) $48.52 -0.77% |
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| | Newspaper Round Up | | Thursday newspaper round-up: Ukraine, BP, Reckitt Benckiser In a clash overnight with Ukrainian authorities, three pro-Russian protesters were killed and 13 wounded. The incident took place at a military installation in the southeastern city of Mariupol. It marked the bloodiest day yet since Kiev began its anti-terrorist operations to drive out the pro-Russian militants who had seized control of 10 cities in the east of the country, The Wall Street Journal Europe reports.
Warnings from corporate lobbyists against tough sanctions on Russia are cracking Europe's resolve to impose them. Companies, with BP at the forefront, are worried that any retaliation from the Kremlin could cost them dearly; hence the sustained pressure on ministers. City lobbyists are telling them that Russian investment into London's financial services might be at risk, The Financial Times says.
Consumer goods giant Reckitt Benckiser is studying the possibility of a separate stock market listing for its pharmaceuticals business, the company said as it reported in-line first-quarter results. That follows a strategic review of its businesses as it is at odds with the rest of its core brands. "A capital markets solution is emerging as a strong option," the company said, according to The Daily Telegraph.
The UK economic recovery is gathering pace, as evidenced by the latest employment report. For one, the unemployment rate fell sharply, to below the 7% threshold which the Bank of England had previously set and growth in wages managed to slightly outpace rising inflation. That sent sterling up towards a four-year high against the US dollar, The Times says.
Come 2030 the average fare for a return flight could increase by as much as £320 if a third runway is not built at Heathrow airport, as demand will outstrip supply. Frontier Economics claims in an independent report that political inaction is already a factor pushing prices higher. In fact, passengers are already paying £95 more per return flight than if a third airstrip already existed, according to The Times.
Six years after the financial crisis Bank of America showed that banks Stateside are still paying a hefty price for mistakes made during the past financial crisis. Thus, a huge $6bn legal bill largely wiped out its profits in the last reporting period. That was the lender's first quarterly loss in nearly three years. Markets, which were taken by surprise, duly sent the shares lower, writes The Times. | | |
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