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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 closes modestly higher - FTSE closes up 5.41 points at 6,878.49
- Quarterly unemployment falls
- Ukraine launches discussions to end the crisis
techMARK 2,793.06 -0.40%
FTSE 100 6,878.49 +0.08%
FTSE 250 15,974.61 -0.40%
UK stocks delivered a modest rise on Wednesday as investors digested the latest minutes from the Bank of England (BoE), alongside the latest developments in Eastern Europe, together with lower UK unemployment figures.
The FTSE 100 closed up 5.41 points at 6,878.49.
In comments made shortly before the close, Chris Beauchamp, a Market Analyst at IG, said: "The FTSE 100 has recovered from the morning's losses and seems intent on actually closing up for the day. The recent sell-off has had the effect of tempting some investors in off the sidelines, helped by the general improvement in economic outlook.
"Although the index is international by disposition, it will hardly have escaped the notice of traders that the Bank of England was cautiously upbeat in its inflation report today, even if it still thinks there is slack to be eliminated before a rate increase becomes a realistic prospect."
The report indicated that the BoE believes that the economic recovery has continued well, although acknowledged that there is some way to go until before the Monetary Policy Committee is comfortable that sufficient wasteful slack has been removed.
In other UK macro news, the unemployment rate slipped to 6.8% in the three months to March from 6.9% in the month before, according to the Office for National Statistics (ONS). The consensus estimate had been for a reading of 6.8%.
The claimant count fell by 25,100 in April (consensus: 30,000). That represented a drop of 399,600 from the year earlier level, but they were still 338,300 above the pre-downturn trough of 778,400 reached in February 2008.
Ukraine launches discussions to end the crisis
Ukraine has agreed to launch discussions to end the crisis and give more powers to the regions as a poll showed that more than half its citizens want to join the European Union (EU) although almost a third favour joining a Moscow-led alliance.
That came alongside news that the Organisation for Security and Cooperation in Europe (OSCE) had brokered a peace plan which received backing from Moscow, although pro-Russian separatists were thought unlikely to attend.
In that regards, the eastern regions of Donetsk and Luhansk have declared themselves separate from Ukraine after referendums, although while Russia said it "respected" the votes, they have been disregarded as illegal by Kiev, the US and EU.
Meanwhile, over in the US, producer prices increased by 0.6% month-on-month in April, according to the Bureau of Labor Statistics (BLS).
Versus a year ago prices were 2.1% higher, their fastest pace since September 2012.
Miners track metal prices higher
Antofagasta and BHP Billiton rose on the back of rising metal prices, which saw gold rise 0.74%, silver 1.32%, platinum 1.52% and copper 0.78% by the close.
AstraZeneca was making modest gains following reports its Chief Executive had said he would be open to the "right offer" from Pfizer.
Meanwhile, television network ITV fell sharply despite a seemingly in-line first-quarter statement with total external revenues up 2%. Analyst Steve Liechti from Investec said that the update "looks OK [with ad revenues] more or less as we expected", but "some bulls may have wanted more". The stock was down nearly 6%.
A number of heavyweight stocks were trading lower after going ex-dividend, including J Sainsbury, Aberdeen Asset Management, Glencore Xstrata and Kingfisher.
Also higher was catering giant Compass, which has hiked its interim dividend after a solid first half and unveiled a £1bn capital return to investors. The return, which Compass said was due to ongoing strong cash flows, is being effected by way of a special dividend and share consolidation.
On the second tier, private equity group 3i Group rose into the top spot after it said it was starting the year with good momentum and ambitious plans, after unveiling results that showed an encouraging improvement in net asset value (NAV).
Meanwhile, British engineering company Renishaw dropped after it posted a fall in pre-tax profit, to £14.4m from £15.9m due to currency headwinds. Investec placed both its target (prev.: 1,940p) and its 'hold' recommendation under review. |
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FTSE 100 - Risers
G4S (GFS) 256.50p +2.40%
Antofagasta (ANTO) 795.00p +2.05%
SSE (SSE) 1,536.00p +1.79%
Experian (EXPN) 1,083.00p +1.69%
Compass Group (CPG) 996.00p +1.58%
BHP Billiton (BLT) 1,995.00p +1.53%
Fresnillo (FRES) 836.50p +1.39%
Rio Tinto (RIO) 3,374.00p +1.31%
Mondi (MNDI) 1,044.00p +1.26%
Aggreko (AGK) 1,702.00p +1.25%
FTSE 100 - Fallers
ITV (ITV) 179.10p -6.23%
Sainsbury (J) (SBRY) 327.70p -3.33%
Ashtead Group (AHT) 835.00p -2.79%
Barratt Developments (BDEV) 377.00p -2.41%
Kingfisher (KGF) 408.30p -2.20%
Melrose Industries (MRO) 288.30p -1.77%
ARM Holdings (ARM) 890.50p -1.77%
Barclays (BARC) 251.30p -1.59%
International Consolidated Airlines Group SA (CDI) (IAG) 388.90p -1.57%
British Sky Broadcasting Group (BSY) 844.00p -1.52%
FTSE 250 - Risers
Imagination Technologies Group (IMG) 215.50p +8.67%
3i Group (III) 400.20p +5.79%
Booker Group (BOK) 156.50p +4.06%
Partnership Assurance Group (PA.) 128.90p +3.78%
Vesuvius (VSVS) 445.00p +3.25%
JD Sports Fashion (JD.) 1,744.00p +2.41%
Dixons Retail (DXNS) 50.90p +1.90%
NMC Health (NMC) 472.40p +1.81%
Stagecoach Group (SGC) 372.40p +1.55%
Evraz (EVR) 105.00p +1.45%
FTSE 250 - Fallers
Renishaw (RSW) 1,701.00p -7.50%
Howden Joinery Group (HWDN) 334.80p -4.23%
Carillion (CLLN) 353.00p -3.87%
Berkeley Group Holdings (The) (BKG) 2,309.00p -3.79%
Supergroup (SGP) 1,068.00p -3.78%
Ocado Group (OCDO) 323.10p -3.44%
Rightmove (RMV) 2,286.00p -3.42%
Moneysupermarket.com Group (MONY) 177.20p -3.28%
Bank of Georgia Holdings (BGEO) 2,420.00p -3.20%
Redrow (RDW) 276.50p -2.98% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed after inflation data, BoE report - German and French inflation data released
- BoE unveils inflation report
- Ukraine talks in motion to resolve crisis
FTSE 100: 0.08%
DAX: 0.00%
CAC 40: -0.09%
FTSE MIB: -0.34%
IBEX 35: 0.25%
Stoxx 600: -0.09%
European stocks were mixed following the release of inflation figures in Germany and France and the Bank of England's inflation report.
German consumer prices on an annual European harmonised basis rose by 1.1% in April following a 0.9% increase a month earlier, in line with expectations.
French inflation increased by 0.8% last month, compared to a 0.7% climb in March, missing estimates of 0.9%.
The data comes a day ahead of a final report on Eurozone inflation which is expected to confirm inflation rose to 0.7% in April, compared to 0.5%. Despite the increase, it remains well below the European Central Bank's (ECB) 2% target, adding pressure on the monetary authority to change policy.
The ECB is next month expected to cut rates and introduce measures to boost lending to small and medium-sized firms to address weak inflation and high unemployment in the Eurozone.
ECB board member Peter Praet confirmed to German newspaper Die Zeit that the central bank was preparing a range of measures, but would not specify exactly what action it would take.
"We could offer more long-term loans to banks, possibly against conditions," he said. "We could cut interest rates once again. A combination of measures is also thinkable.
"Negative interest rates are a possible part of such a combination of measures. In the context of the very low inflation rate in the euro area an appreciation is a problem, because a stronger euro cheapens imports and further depresses the inflation rate."
Elsewhere in the Eurozone, data showed European industrial production fell by 0.1% year-on-year in March following a 1.7% increase the prior month, trailing the 0.9% gain forecast by economists.
BoE in no rush to raise interest rates
The Bank of England (BoE) has reiterated that it was in no rush to raise interest rates despite pressure to address fears in the market over rising house prices as demand outstrips supply.
The BoE said it would keep interest rates unchanged for the time being, leaving it on track to raise rates in around a year's time.
The central bank forecast growth of 3.4% this year, unchanged from February.
However, it expects unemployment will fall faster than previously forecast to 5.9% in two years compared to 6.4% in February's estimate.
Ukraine talks
Ukraine has agreed to launch discussions to end the crisis and give more powers to the regions as a poll showed that more than half its citizens want to join the European Union (EU) although almost a third favour joining a Moscow-led alliance.
It came alongside news that the Organisation for Security and Cooperation in Europe (OSCE) had brokered a peace plan which received backing from Moscow, although pro-Russian separatists were thought unlikely to attend.
The eastern regions of Donetsk and Luhansk have declared themselves separate from Ukraine after referendums, although while Russia said it "respected" the votes, they have been disregarded as illegal by Kiev, the US and EU.
Teleperformance, Mediaset
Teleperformance jumped after the Paris-based call-centre operator said first-quarter revenue grew 3% from a year earlier and confirmed full-year forecasts for comparable-sales growth.
Mediaset SpA slumped after the Italian broadcaster controlled by former Prime Minister Silvio Berlusconi reported a first-quarter loss.
Compass Group advanced after the catering firm said it will return £1bn to investors.
Banco Comercial Portugues retreated following a report that said the lender is planning a capital increase.
Nordex SE gained after the German wind-turbine maker raised its full-year forecasts.
The euro rose 0.09% to $1.3716.
Brent crude futures climbed $0.637 to $109.940. |
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| | US Market Report | | US open: Stocks pull back from records on earnings, wholesale prices - Fossil, Deere, Plug Power fall after earnings
- Wholesale prices rose by most in a year
- Ukraine concerns weigh on sentiment
Dow Jones: -0.32%
Nasdaq: -0.24%
S&P 500: -0.22%
US stock markets declined on Wednesday with indices pulling back from record highs registered the previous session.
Investors were digesting a host of weak corporate earnings from Fossil, Deere and Plug Power and data showing the biggest rise in US wholesale prices in a year.
The Dow Jones Industrial Average, which closed at an all-time high of 16,715.44 on Tuesday, was trading 0.3% lower in early trading, while the S&P 500 fell 0.2% from a record of 1,897.45. The Nasdaq, meanwhile, slipped 0.2%.
The producer price index jumped a seasonally adjusted 0.6% last month following a revised 0.5% increase in March, the Labor Department said, compared to expectations for a 0.2% increase.
Another report showed mortgage applications climbed 3.6% in the week ended May 9th, following a 5.3% gain the prior week.
Meanwhile, markets continue to watch developments in Ukraine amid concerns over unrest after Russian Foreign Minister Sergei Lavrov said in an interview with Bloomberg that the country is as "close to civil war as you can get".
He added that Russia has "no intention" of sending its troops anywhere but that the country is locked in the worst stand-off since the end of the Cold War against the US and Europe over Ukraine.
His remarks come ahead of the Ukraine presidential elections on May 25th.
Fossil, Deere, Plug Power decline early on
Fossil Group Inc. dropped sharply after the maker of watches and accessories guided to earnings in the second quarter that were short of analysts' estimates. Investors were shrugging off a better-than-expected first quarter from the firm with profits falling less than expected.
Deere slipped as the agricultural-equipment maker said equipment sales will drop by about 4% for 2014, compared with a previous projection for a decline of about 3%.
Fuel cell manufacturer Plug Power sank after losses in the first quarter widened significantly on the back of stock warrant charges.
Macy's advanced after the department store chain lifted its dividend after achieving an increase in first-quarter profits.
The 10-year Treasury yield fell five basis points to 2.56%.
West Texas Intermediate crude futures increased 0.56% to $102.27 per barrel, according to the ICE. |
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| | Broker Tips | | Broker tips: ITV, Compass, Mondi, Admiral Investec has sounded a cautious note on ITV, saying that some may have expected more from the terrestrial broadcaster with its first-quarter update.
The broker maintained a 'hold' stance on the shares with a 195p target, saying that the stock's valuation "looks quite full versus media peers".
Panmure Gordon sees "significant upside" at Compass Group after the catering company delivered decent first-half results and announced a £1bn special dividend.
The broker reiterated its 'buy' recommendation and 1,100p target for the stock. Panmure said: "Compass holds significant upside from a global recovery due to rising employment, further margin improvement and higher cash returns to shareholders.
Davy Research said it sees upside risk at Mondi, keeping an 'outperform' rating on the packaging stock as the momentum in selling prices turns positive.
"Overall, while we are unlikely to change forecasts, if this positive momentum is sustained, the risk to forecasts is to the upside. Combined with positive long-term fundamentals for most of Mondi's business units, this means that we maintain our 'outperform' rating."
Admiral's first-quarter results were met with a negative reaction from the market on Wednesday, but Numis Securities maintained a positive stance on the car insurer, saying it sees early signs of growth in the UK.
Numis kept a 'buy' rating and 1,710p target. The broker said that it was surprised by the 2% growth in UK customers to 3.08m in the first quarter, having pencilled in no growth over the full year. | | |
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