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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: Lloyds leads positive finish for FTSE - FTSE closes up 28.84 points at 6,808.87
- Lloyds leads after strong quarterly performance
- UK manufacturing PMI rises to five-month high
techMARK 2,788.41 +0.28%
FTSE 100 6,808.87 +0.43%
FTSE 250 15,850.34 +0.21%
London-listed stocks closed today's session on a positive note, with gains being led by Lloyds as investors welcomed a stronger-than-expected rise in house prices and better-than-forecast UK manufacturing data.
The FTSE 100 closed up 28.84 points at 6,808.87.
Chris Beauchamp, Market Analyst at IG, said: "The new month has got off to a positive start for the FTSE and other UK markets, although trading is lacking the enthusiasm displayed during previous days. This is probably down to a combination of the absence of 'month end mark up' trading, and caution ahead of non-farm payrolls tomorrow.
"Lloyds has added to its gains in the afternoon session, and the results today are likely to boost appetite for the TSB initial public offering among investors, eager to seize another piece of the Lloyds empire."
The UK manufacturing purchasing managers' index (PMI) rose to a five-month high of 57.3 in April, up from 55.8 in March and ahead of the consensus forecast of 55.4, driven by increases in output and new orders. The news pushed the pound to an almost five-year high against the greenback at $1.6921, although it later fell back.
Meanwhile, UK house prices increased by 1.2% during April to reach £183,577 following several months of moderation, according to mortgage lender Nationwide.
That left prices standing 10.9% higher than a year ago, the first double-digit gain in four years. Economists had been expecting gains of 0.5% month-on-month and 9.8% over the year.
In other UK macro news, lending to individuals increased by 0.2% over the month, or £2.9bn, to reach £1.44trn, while the average monthly rise over the previous six months was £1.9bn. Net mortgage lending was 0.1% higher on the month, after increasing by £1.8bn (Consensus: £1.7bn), to £1.281trn.
US economic data comes in mixed
Meanwhile, over in the States, consumer spending and incomes both increased in March, with growth accelerating from the prior month. Spending and incomes rose by 0.9% and 0.5%, respectively, ahead of forecasts.
"While these data were already incorporated in the first-quarter 2014 advance GDP release, they suggest solid momentum in underlying goods and services spending going into the second quarter of 2014, and we project another 3% increase in consumer spending on the quarter," said Analyst Dean Maki from Barclays.
An index measuring activity in the manufacturing sector, as measured by the Institute for Supply Management, rose to 54.9 in April from 53.7 the month before, ahead of the 54.3 forecast.
Meanwhile, jobless claims unexpectedly rose to a nine-week high of 344,000 last week from a revised 333,000 the week before, according to data from the Labor Department. The consensus forecast was for a drop to 320,000.
Betting terminal recommendations not as bad as feared
The government today unveiled its report into the high street gambling industry and fixed-odds betting terminals (FOBTs) - and the results are not as bad as feared for bookmakers.
The main recommendations from the Department for Media, Conservation and Sport (DMCS) report is to give local councils new powers to control the concentration of betting shops, with bookmaking firms now required to apply for planning permission. William Hill and Ladbrokes were both higher by the close.
Lloyds takes top spot after strong Q1 and TSB float news
Domestic lender Lloyds rose into the top spot after saying that underlying profits rose by over a fifth in the first quarter and it continues to expect to apply to regulators in the second half to restart dividend payments. That came as it announced TSB bank is due to float in London before the end of June, selling at least a 25% stake of the recovering business.
Most of Lloyds's key financial metrics continued to 'appreciate measurably' in the first quarter, according to Hargreaves Lansdown Stockbrokers. "Lloyds is often seen as a proxy for the UK economy, and although they are inextricably linked, both are beginning to prosper after a long period of austerity," said Head of Equities Richard Hunter.
Aggreko climbed strongly after Jefferies upgraded the stock to 'buy', pushing the stock more than 4% higher.
Profits at oil and gas firm BG Group rose as it regained losses incurred earlier in the week, which came on the back of lower production volumes and higher costs, as well as the surprise exit of its Chief Executive.
Earnings fell 2.4% at BSkyB in the third quarter despite a rise in revenues, but continued investment in connected television services was repaid with better-than-expected new subscriptions, pushing shares higher throughout today's session.
Meanwhile, meanwhile, Sainsbury, Tesco and Morrison were all notable fallers this afternoon after the latter unveiled plans to slash the price of 1,2000 products by as much as 60% in an effort to take a greater slice of the market share. As many as 40% of the products will be own-brand items. Broker Bernstein said the size of the move marked "a big departure" and said the company was "dropping the ultimate bomb".
Scottish engineering group Weir declined after Numis Securities downgraded its rating for the stock from 'add' to 'hold', saying that it sees little upside after the stock's recent strong run. That came after the group posted in line trading in the last four months.
Randgold Resources fell after Investec reiterated its 'hold' rating on the stock. |
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FTSE 100 - Risers
Lloyds Banking Group (LLOY) 79.50p +5.49%
Aggreko (AGK) 1,645.00p +4.31%
Hargreaves Lansdown (HL.) 1,215.00p +3.85%
BG Group (BG.) 1,237.50p +3.30%
AstraZeneca (AZN) 4,815.00p +3.24%
Rexam (REX) 510.00p +2.82%
Johnson Matthey (JMAT) 3,359.00p +2.63%
Royal Bank of Scotland Group (RBS) 306.60p +2.61%
ITV (ITV) 186.60p +2.53%
Travis Perkins (TPK) 1,748.00p +2.52%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 325.10p -3.16%
Fresnillo (FRES) 830.00p -2.52%
Tesco (TSCO) 286.55p -2.18%
Randgold Resources Ltd. (RRS) 4,678.00p -2.13%
Weir Group (WEIR) 2,634.00p -2.08%
Morrison (Wm) Supermarkets (MRW) 197.50p -1.69%
Smith & Nephew (SN.) 905.00p -1.58%
Vodafone Group (VOD) 220.65p -1.47%
Antofagasta (ANTO) 776.00p -1.40%
Sage Group (SGE) 420.80p -1.31%
FTSE 250 - Risers
Fisher (James) & Sons (FSJ) 1,433.00p +11.00%
Just Retirement Group (JRG) 170.30p +4.54%
Supergroup (SGP) 1,390.00p +4.51%
RPC Group (RPC) 623.50p +3.92%
BTG (BTG) 551.50p +3.67%
Dixons Retail (DXNS) 46.60p +3.60%
Carphone Warehouse Group (CPW) 317.90p +3.28%
FirstGroup (FGP) 133.40p +3.25%
Hansteen Holdings (HSTN) 106.20p +3.21%
Partnership Assurance Group (PA.) 136.00p +3.03%
FTSE 250 - Fallers
Regus (RGU) 197.00p -5.74%
Brown (N.) Group (BWNG) 486.70p -5.13%
Polymetal International (POLY) 548.00p -3.18%
African Barrick Gold (ABG) 241.80p -2.62%
St. Modwen Properties (SMP) 362.00p -2.56%
Imagination Technologies Group (IMG) 191.40p -2.45%
Fidessa Group (FDSA) 2,190.00p -2.32%
Lancashire Holdings Limited (LRE) 684.00p -2.29%
Synthomer (SYNT) 258.20p -2.20%
Vedanta Resources (VED) 925.50p -2.17% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Spain revises growth forecasts higher
- Spain revises growth forecasts higher
- Euro moves up towards 1.39
- Most markets closed for holiday
FTSE-100: 0.43%
Dax-30: Closed for holiday
Cac-40: Closed for holiday
FTSE Mibtel 30: Closed for holiday
Ibex 35: Closed for holiday
Stoxx 600: 0.18%
What few markets were open for trading on Thursday in Europe managed to finish slightly in the blue, as the single currency continued to grind slowly higher ahead of tomorrow’s US non-farm payrolls report.
The above may well just be the result of some traders positioning themselves ahead of that key report. In fact, for now most observers seem to be continuing to expect the US economy to chug along, leading to widening interest differentials and hence a lower single currency.
The wild-card of course are the continuing high portfolio flows into the Eurozone, which have been buoying the euro, alongside other factors.
In any case, just as important as the level of the euro - from the European Central Bank's perspective - is how long it actually remains above these levels, says Alex Bueso at Sharecast.
Of great interest, yesterday the Spanish government approved its new Stability Programme (SP) and new National Reform Plan (NRP) for up until 2017, which includes several upwards revisions.
The growth outlook was upgraded to 1.2% for 2014, 1.8% for 2015, 2.3% in 2016 and 3% in 2017. Critically, for the sustainability of Spain’s national debt, it is expected to peak next year, although some economists believe those forecasts to still be too optimistic.
There were no major economic reports released on the Continent.
Euro continues to grind higher
The euro/dollar was 0.01% higher at 1.3876.
Front-month Brent crude futures were off by 0.577% to the $107.45/barrel mark on the ICE. |
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| | US Market Report | | US open: Dow pauses at record high after mixed economic data - Consumer spending, incomes beat forecasts
- ISM manufacturing rises ahead of estimates
- Jobless claims unexpectedly rise
- T-Mobile US up on customer growth, Sprint speculation
Dow Jones: -0.08%
Nasdaq: 0.06%
S&P 500:-0.08%
US stocks opened more or less flat on Thursday with the Dow Jones Industrial Average pausing at a record high as investors digested upbeat consumer spending and manufacturing figures, as well as a surprise increase in jobless claims.
The Dow was trading 0.1% lower in morning trade, having reached an all-time high of 16,580.84 on Wednesday, the S&P 500 fell 0.1%, while the Nasdaq gained 0.1%.
Markets had risen the previous session after the Federal Open Market Committee chose to continue reducing its quantitative easing programme by a further $10bn a month, as was widely expected. The decision came despite figures yesterday showing that the US economy almost stagnated in the first quarter, with gross domestic product (GDP) expanding by just 0.1% on an annualised rate.
In economic data today, consumer spending and incomes in the States both increased in March, with growth accelerating from the prior month. Spending and incomes rose by 0.9% and 0.5%, respectively, ahead of forecasts.
"While these data were already incorporated in the first-quarter 2014 advance GDP release, they suggest solid momentum in underlying goods and services spending going into the second quarter of 2014, and we project another 3% increase in consumer spending on the quarter," said Analyst Dean Maki from Barclays.
An index measuring activity in the US manufacturing sector, as measured by the Institute for Supply Management, rose to 54.9 in April from 53.7 the month before, ahead of the 54.3 forecast.
Meanwhile, US jobless claims unexpectedly rose to a nine-week high of 344,000 last week from a revised 333,000 the week before, according to data from the Labor Department. The consensus forecast was for a drop to 320,000.
T-Mobile surges on customer growth
Shares in T-Mobile US rallied after the company added 1.3m new monthly subscribers during the first three months of the year, its highest ever quarterly gain.
T-Mobile US was also boosted by reports that larger telecoms firm Sprint has met with banks to make debt arrangements in a potential bid for the company.
Oil major Exxon Mobil was subdued early on despite reporting a less-than-expected 1% decline in earnings per share (EPS). Sector peer ConocoPhillips, however, impressed with its quarterly results as adjusted EPS rose 27%.
Auto major Ford declined after saying that US vehicle sales declined to 211,126 units in April, down 0.7% on a year earlier. General Motors, however, gained after reporting 6.9% growth.
Front month West Texas crude futures were down by 0.53% to the $99.22/barrel mark on the NYMEX.
10-year US Treasury yields edged higher by one basis point to 2.65%. |
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| | Broker Tips | | Broker tips: Lloyds, Weir, BSkyB... Most of Lloyds' key financial metrics continued to 'appreciate measurably' in the first quarter, according to Hargreaves Lansdown Stockbrokers.
"Lloyds is often seen as a proxy for the UK economy, and although they are inextricably linked, both are beginning to prosper after a long period of austerity," said Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers.
Numis Securities has downgraded its rating for Weir Group from 'add' to 'hold' despite the company's in-line first-quarter trading update on Thursday, saying that it sees little upside after the stock's recent strong run.
Nevertheless, Numis said: "We continue to view Weir as a high quality business with leading market positions, excellent margins and strong cash generation."
Bernstein Research has kept an 'underperform' rating and 700p target for British Sky Broadcasting (BSkyB), but admitted that the company's outlook is "beginning to look safer".
The broker said that the economic recovery in the UK "should help lift the outlook for TV, both from a demand perspective and from a pricing angle". It added: "If BSkyB were to ratchet back growth on Broadband and Telephony, this might reduce the need for BT to be aggressive on content, which could bode well for a more orderly English Premier League auction next year (a net positive)."
Investec remains a 'seller' of BG Group despite first-quarter results looking "fine", saying that the surprise departure of its Chief Executive Officer on Monday is "still a mystery".
"After the shock resignation of Chris Finlayson, there had perhaps been a fear that the first quarter might have seen another car crash. In the event, the results were absolutely fine, making his exit all the more mystifying," Analyst Neill Morton said.
Cantor Fitzgerald has said that the scale of the profit warning by outsourcing group Serco is "surprising", as it reiterated its 'sell' recommendation for the stock.
"Serco has had a spectacular fall from grace, in our view, but we are not convinced that the worst is over for shareholders. The new Chief Executive Officer has barely got his feet under his desk and, as we expected, Andrew Jenner, group Chief Financial Officer is stepping down. It is therefore a real possibility in our view that we will see more 'kitchen sinking' by the new management team." | | |
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