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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: AstraZeneca leads stocks lower - FTSE closes down 11.26 points at 6,844.55
- AstraZeneca leads fallers after bid rejection
- Chinese data disappoints
techMARK 2,719.46 -0.94%
FTSE 100 6,844.55 -0.16%
FTSE 250 15,379.44 -0.12%
London's blue chips ended the session broadly lower, weighed by AstraZeneca and generally weaker sentiment following the real estate data released from China, although this improved somewhat as the day went on.
The FTSE 100 closed down 11.26 points at 6,844.55.
Chris Beauchamp, Market Analyst at IG. said: "Markets are pushing off their lows in Europe and the US this afternoon, but the FTSE 100 has been unable to clamber out of negative territory while AstraZeneca is down [more than] 10%. At around 3% of the index Astra is too important to ignore, but most traders are looking beyond this one stock and are generally turning more bullish as the day goes on."
For his part, Jasper Lawler, a Market Analyst at CMC Markets UK, said investors had today had to "readjust expectations for an M&A boom and a Eurozone recovery" following Pfizer's latest failed bid for AstraZeneca.
He also referenced comments from Bank of England Governor, Mark Carney, who said there was not sufficient supply in the housing market.
For Lawler, the lack of supply is the reason for the gradual increase in the price of houses in the UK above inflation for the last few decades, but "does not explain the 8.9% annual increase in prices reported in the last year by Rightmove", saying instead it was due to the record low interest rates.
"It would almost be impossible to build enough houses to offset the current rise in house prices, the rapid move higher in prices will only stop once the central bank raises its benchmark interest rate."
Chinese data provides drag across the globe
China's real estate sector weakened further, figures from the National Bureau of Statistics showed overnight, weighing on investor sentiment.
New-home prices fell in eight of the country's cities, compared to the four which saw a fall in March as developers increasingly struggle with slowing economic growth and sluggish demand.
Craig Erlam from Alpari said the figures added to concerns that the country cannot achieve its ambitious 7.5% growth target.
"This time is was the housing market that caused concerns with prices of second homes in Beijing falling 0.2% while prices of non-governmental residential housing rose at a slower pace for the sixth consecutive month," he explained.
"At some point the government or the central bank is going to have to provide some form of stimulus, otherwise I don't see how the country will come close to achieving its growth target."
Putin orders withdrawal of military units from Ukrainian border
Russian President Vladimir Putin has reportedly ordered units that participated in recent military exercises on the Western border of Russia to return to their barracks, while at the same time calling for an end to Ukraine's military operations against pro-Moscow militants in its eastern regions.
According to the Kremlin Press office, Putin also welcomed the first contacts between officials from the Ukrainian government and those who support federalisation, Interfax reported.
AstraZeneca leads the way lower
Pharmaceutical giant AstraZeneca slumped after it rejected a 'final proposal' from US rival Pfizer.
The offer, which valued the London-listed group at £69bn, would not be increased any further, Pfizer said, adding that it would not pursue a hostile offer and would only announce another offer with the recommendation of AstraZeneca's board.
Meanwhile, easyJet and IAG were flying higher on positive read across from figures out from airline peer Ryanair. The Dublin-based group posted a less-than-expected 8% drop in annual profits and forecast a strong first half of the new financial year. |
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FTSE 100 - Risers
easyJet (EZJ) 1,587.00p +4.68%
International Consolidated Airlines Group SA (CDI) (IAG) 370.80p +3.49%
Mondi (MNDI) 1,023.00p +2.81%
Shire Plc (SHP) 3,353.00p +2.66%
Aggreko (AGK) 1,743.00p +2.59%
Ashtead Group (AHT) 817.00p +2.32%
Associated British Foods (ABF) 3,071.00p +2.23%
Johnson Matthey (JMAT) 3,280.00p +2.05%
Reed Elsevier (REL) 907.50p +2.02%
Wolseley (WOS) 3,316.00p +1.94%
FTSE 100 - Fallers
AstraZeneca (AZN) 4,287.50p -11.11%
Coca-Cola HBC AG (CDI) (CCH) 1,346.00p -2.53%
Hargreaves Lansdown (HL.) 1,144.00p -2.47%
Rio Tinto (RIO) 3,225.00p -1.87%
GlaxoSmithKline (GSK) 1,620.00p -1.43%
Diageo (DGE) 1,919.00p -1.18%
Barclays (BARC) 238.95p -1.08%
Marks & Spencer Group (MKS) 451.00p -0.99%
Smith & Nephew (SN.) 918.50p -0.97%
Royal Mail (RMG) 565.50p -0.96%
FTSE 250 - Risers
Cairn Energy (CNE) 188.00p +3.81%
Vedanta Resources (VED) 1,015.00p +3.78%
Keller Group (KLR) 965.00p +2.88%
Micro Focus International (MCRO) 800.00p +2.83%
Alent (ALNT) 310.00p +2.55%
Perform Group (PER) 261.10p +2.39%
Mitie Group (MTO) 318.30p +2.35%
BTG (BTG) 525.00p +2.34%
Afren (AFR) 154.10p +1.99%
BBA Aviation (BBA) 303.80p +1.95%
FTSE 250 - Fallers
Supergroup (SGP) 964.00p -5.86%
Mitchells & Butlers (MAB) 404.30p -4.71%
Countrywide (CWD) 529.00p -4.25%
Foxtons Group (FOXT) 286.90p -3.95%
PayPoint (PAY) 1,095.00p -3.61%
Ted Baker (TED) 1,700.00p -3.57%
RPS Group (RPS) 266.20p -3.13%
Wetherspoon (J.D.) (JDW) 785.00p -3.09%
Just Retirement Group (JRG) 145.80p -3.06%
Aberforth Smaller Companies Trust (ASL) 1,086.00p -3.04% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed after Weidmann speech - Weidmann warns of 'shortsighted' ECB policy
- Eurozone construction output slows
- Chinese house prices fall
- Greek elections mixed
- Russia orders withdrawal of troops in Ukraine
FTSE 100: -0.16%
DAX: 0.31%
CAC 40: 0.30%
FTSE MIB: -1.60%
IBEX 35: -0.51%
Stoxx 600: -0.14%
European shares were little changed as Bundesbank Chief Jens Weidmann warned that euro-area policy efforts targeted solely toward the euro exchange rate would be "shortsighted".
Weidmann, a member of the European Central Bank's (ECB) governing council, said that setting a specific target for the euro exchange rate could conflict with the monetary authority's mandate to maintain price stability in the Eurozone.
"In order to strengthen growth and employment in the euro area permanently, member states must ensure competitive economic structures" instead of relying on the euro exchange rate, he said at a Deutsche Bundesbank conference in Frankfurt today.
His remarks come as traders bet the ECB will ease policy at its June meeting amid weak inflation and a stagnant recovery.
Elsewhere in the Eurozone, data showed construction output in March eased back. It rose 5.2% year-on-year following a 7.5% increase in February.
In Greece the first round of the municipal elections produced a mixed result that allowed both the coalition and the opposition party to claim they performed well.
In China, a report from the real estate sector in China which showed property prices dropped last month. According to the National Bureau of Statistics, eight of the country's cities saw a monthly decline in the average commercial house price, compared to the four which saw a fall in March.
Meanwhile, Russia's President Vladimir Putin has ordered the withdrawal of troops near Ukraine's border, the Kremlin said.
Units in the Rostov, Belgorod and Bryansk regions should return to their permanent bases, according to a statement.
AstraZeneca leads health stocks lower
AstraZeneca declined after the board rejected a sweetened £55-a-share bid from Pfizer. A gauge of European health-care companies, including GlaxoSmithKline and Novartis, also tumbled.
Deutsche Bank AG retreated after Germany's biggest bank sold about 60m shares to the Qatari royal family as it announced plans to raise €8bn in its second-largest capital increase.
Adidas AG slumped after the world's second-biggest sporting-goods maker said it will probably need more time to meet its 2015 sales and margin targets because of the strong euro.
Ryanair flew higher after reporting annual earnings that beat analysts' estimates.
Saab AB edged lower as the Swedish company stands to lose a 3.1bn-franc ($3.5bn) order for Gripen fighter jets after Swiss voters rejected the deal in a referendum.
Alstom gained as General Electric seeks approval from France for its $17bn bid for the company.
The euro rose 0.17% to $1.3717.
Brent crude futures fell $0.128 to $109.610 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks fall after weak Chinese data US stocks declined as a disappointing report on the Chinese housing market fuelled concerns over the slowdown in the world's second largest economy.
Chinese property prices dropped last month in eight of the country's cities, compared to four in March, according to the National Bureau of Statistics.
"At some point the government or the central bank is going to have to provide some form of stimulus, otherwise I don't see how the country will come close to achieving its growth target," said Craig Erlam, Analyst at Alpari.
Meanwhile, a speech from Richard Fisher, President of the Federal Reserve Bank of Dallas and voting member of the Federal Open Market Committee, will be closely watched later on in the session. Fisher is due to speak at the Bush Institute Monetary Conference at 12:10 EDT.
It comes ahead of the release of the Federal Reserve's meeting minutes on Wednesday. Fed Chair Janet Yellen said last week the US economy has further to go in its recovery and said small businesses would be key in nursing the country back to health.
In other world news, Russia's President Vladimir Putin has ordered the withdrawal of troops near the Ukraine border, the Kremlin said.
Units in the Rostov, Belgorod and Bryansk regions should return to their permanent bases, according to a statement.
On the company front, Pfizer rallied after AstraZeneca rejected a sweetened offer from the US pharmaceutical group, which valued it at £69bn.
AT&T Inc. declined after agreeing to buy DirecTV, the largest US satellite-TV company, for $48.5bn.
The US 10-year yield fell two basis points to 2.50%.
West Texas Intermediate crude futures increased $0.701 to $102.740 per barrel, according to the ICE. |
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| | Broker Tips | | Broker Carnegie said it still sees upside in AstraZeneca's share price despite a takeover by Pfizer now looking unlikely.
AstraZeneca's shares fell as much as 14% on Monday morning after the board rejected a sweetened £55-a-share bid from Pfizer.
The new offer is thought to value AstraZeneca at around £69bn but was only a "minor improvement" on previous proposals, according to Chairman Leif Johansson.
Pfizer said this is a "final proposal" and would not be increasing it any further. It said it would not pursue a hostile offer and would only announce another offer with the recommendation of AstraZeneca's board.
"Although AZN’s board was prepared to recommend an offer above £58.85, the fact that Pfizer has so clearly stressed this was their final bid and that it would not go hostile means the likelihood for a deal is now very small," Carnegie said in a research report.
"At the same time, R&D news has been very positive in the past month, which explains why the share price is not trading down to the levels before the bid."
The broker maintained its 'buy' recommendation on the stock, which was trading 12.1% lower at 4,238p by 10:34 on Monday.
Numis Securities has upgraded its recommendation forAlent from 'hold' to 'add', saying that the chemicals group is geared into an improving global economy.
The company said on Monday that trading since the start of 2014 has been in line with expectations with a "slight increase in demand" being noted across the main electronics and automotive end-markets.
Alent said this has been driven by growth in automotive unit volumes and improving global consumer confidence.
Net sales value on a constant currency basis increased by 3.7% to £98.8m in the year-to-date, though an adverse currency impact of 6.5% meant that NSV was 3% lower year-on-year on a reported basis.
"We believe if the global recovery gains momentum there is likely scope for outperformance," said Numis Analyst Nick James.
He said that the shares now trade at a price-to-earnings ratio of 12.5 on 2014 estimates, falling to 11.7 on 2015 forecasts.
"Stock is beginning to look attractive as a play on an improving global macro," James said. The broker has lifted its target from 330p to 340p.
Inkjet and laser printing products group <b>Domino Printing Sciences</b> has been upgraded by <i>UBS</i> from 'neutral' to 'buy', giving the shares a small boost on Monday morning.
The bank sees more upside after the recent drop in the stock, which has fallen nearly 7% over the last four sessions alone.
"We upgrade Domino to a 'buy' on the recent pull-back. Although weakness has been seen across the small cap universe, we believe Domino’s lack of large end-market dependence and the importance of regulation and new products will drive relative outperformance as earnings growth comes through," UBS said.
It said that the stock now yields 3.1%, compared with the wider UK engineering sector which yields 2.4%. Meanwhile, earnings per share are expected to increase at a compound annual growth rate of 13% over the next three years.
What's more, the £40m of cash on the balance sheet "could offer further accretion", UBS said, either through the acquisition of a digital press ink business or further bolt-on purchases.
"Recent price movements mean Domino now trades in-line with the sector, and our recent trip to the trade show Interpack has given us further confidence in the scalability of Domino’s rapidly growing digital business."
UBS has maintained its 840p target.
Credit Suisse has lifted its target for Royal Bank of Scotland but has maintained an 'underperform' rating on the stock.
The Swiss bank has raised its forecasts for underlying earnings per share from 11p to 14p for this year and from 15p to 17p for 2015, after lowering its estimates for impairments following RBS's first-quarter results earlier this month.
Credit Suisse now expects RBS to record impairments of around £2bn in 2014, down from its previous £2.5bn estimate and closer to the group's guidance of £1.8-2bn provided with the first-quarter figures.
The target for the stock has been lifted from 265p to 280p, which also reflects an increased capital position, Credit Suisse said.
However, it said: "Whilst we acknowledge that the strategic plan presented with full-year results will ultimately likely put the group back on a more sustainable path, we see current valuation as more than fully reflecting the 'steady state' return profile and not necessarily discounting execution risk or further litigation costs." | | |
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