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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: Quiet finish for FTSE, traders eyeing situation in Ukraine - FTSE closes up 13.55 points at 6,822.42
- BoE Deputy warns 'dangerous' to ignore house price momentum
- Eurozone unemployment stuck at 11.8 per cent
- US non-farm payrolls rise 288,000 in April, employment drops
techMARK 2,794.49 +0.22%
FTSE 100 6,822.42 +0.20%
FTSE 250 15,930.92 +0.51%
UK stocks closed modestly higher, as investors digested strong corporate reports from both RBS and InterContinental Hotels, developments in Eastern Europe, and data out from both the US and Europe.
The FTSE 100 ended the session 13.55 points higher at 6,822.42, marking a gain of 136.73, or 2.05%, on the week.
Chris Beauchamp, Market Analyst at IG, this afternoon said: "It looks as if we will be five for five by the end of the session, with five days of gains behind us. What's more, we're now back to highs not seen since the beginning of March. With a three-day weekend looming in the UK, traders have opted not to push the market too far, so it looks to be a subdued end to the week.
"Bullish traders will feel very happy with their work, however, having taken the opportunity presented by pharma bid activity and great results from the banking sector to lift the index past its previous sticking point of 6,700.
"This momentum now needs to be sustained as we head towards the high water mark around 6,866. As we go into the long weekend, most investors will be crossing their fingers and hoping that the Ukraine situation does not deteriorate, even as Russia seeks to call a meeting of the UN Security Council. Today's late bout of selling towards the closing bell is an indication that the market is still nervous trading at these levels."
House prices came into focus today, with the Bank of England Deputy Governor Jon Cunliffe warning it would prove "dangerous to ignore the momentum that has built up in the UK housing market".
He said the "pent-up demand" in both London and other parts of the UK "paints a picture of further pressure on transactions that could take us quickly to pre-crisis rates".
That came as it was reported that London has set a new record after selling an unfurnished apartment for £140m in the luxury block of flats at One Hyde Park.
Reuters spoke to the developer of the apartments, Nick Candy, who told them there is "a concern over the market overheating".
Yesterday Nationwide revealed that house prices increased by 1.2% during April to reach £183,577 following several months of moderation. That left prices standing 10.9% higher than a year ago, the first double-digit gain in four years.
Acting as a back drop to the day's session, it was reported by the BBC that many pro-Russian rebels have been killed, injured and arrested during the Ukraine's government's offensive in the eastern Ukrainian city of Sloviansk.
Eurozone unemployment stuck at 11.8%
The Eurozone's unemployment rate remained unchanged for March, standing at 11.8% for a fourth month. It means that excess capacity in the labour market will continue to pressure prices lower. Furthermore, unemployment in Germany continues to be half that in France, Capital Economics pointed out.
Meanwhile, the Markit Eurozone purchasing managers' index for April rose to a reading of 53.4, from a preliminary estimate of 53.3 and of 53 for the month before, signalling an expansion in activity levels for a tenth successive month. The consensus estimate had been for a reading of 53.3.
US non-farm payrolls rise 288,000 in April, employment drops
Over in the States, non-farm payrolls increased by an impressive 288,000 in April, well ahead of the 220,000 rise expected by analysts and the previous month's initial reading of 192,000. Figures for March and February were revised higher by a combined 36,000.
Meanwhile, the unemployment rate dropped to 6.3%, from 6.7% in March. The consensus forecast was for a smaller fall to 6.6%.
However, not all aspects of the report were positive, with the participation rate falling to 62.8% from 63.2% and wage growth slowing to 1.9% from 2.1%.
Analysts at Berenberg said that weak wage growth during the month "gives the Fed room for patience".
News of special dividend payment lifts InterContinental Hotels (IHG)
A special dividend and a strong first-quarter performance were plated up for IHG shareholders today, after it delivered its best 'RevPAR' performance in seven quarters.
RBS also pleased investors after saying that pre-tax profit surged to £1.64bn in the first three months of 2013, up from £826m the year before and ahead of forecasts.
This came despite a 2% fall in income to £5.05bn, as expenses fell 6% and impairment losses dropped 65%."The first-quarter [statement] appears at first read to be way above consensus and our forecast," said Analyst Mike Trippitt at Numis Securities.
Barratt Developments climbed after the group had its 'buy' rating reiterated by Citigroup. Building merchant Travis Perkins was also higher.
Meanwhile, Hargreaves slumped after Citigroup opted to reiterate its 'sell' rating on the stock, and despite increasing its target from 780p to 1,000p.
British American Tobacco was another notable faller, hit in part by a reiterated 'hold' rating from Societwe Generale.
Beverage cans maker Rexam fell after saying that regional trading conditions were mixed in the first quarter. The company also announced that foreign exchange movements will be a headwind going forward, while metal premiums are at record highs. Packaging peer Mondi was also lower. |
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FTSE 100 - Risers
InterContinental Hotels Group (IHG) 2,190.00p +8.20%
Royal Bank of Scotland Group (RBS) 331.70p +8.19%
Kingfisher (KGF) 426.40p +2.01%
Antofagasta (ANTO) 790.50p +1.87%
BHP Billiton (BLT) 1,931.00p +1.85%
Barratt Developments (BDEV) 375.00p +1.79%
Rio Tinto (RIO) 3,247.00p +1.47%
Smith & Nephew (SN.) 917.50p +1.38%
SABMiller (SAB) 3,252.00p +1.32%
Randgold Resources Ltd. (RRS) 4,739.00p +1.30%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,900.00p -3.24%
Hargreaves Lansdown (HL.) 1,193.00p -1.81%
Johnson Matthey (JMAT) 3,308.00p -1.52%
British American Tobacco (BATS) 3,396.50p -1.52%
Smiths Group (SMIN) 1,321.00p -1.49%
William Hill (WMH) 355.60p -1.39%
Rolls-Royce Holdings (RR.) 1,026.00p -1.35%
British Sky Broadcasting Group (BSY) 889.00p -1.28%
Rexam (REX) 504.00p -1.18%
Sainsbury (J) (SBRY) 321.30p -1.17%
FTSE 250 - Risers
Lonmin (LMI) 292.60p +4.76%
Redrow (RDW) 305.00p +4.67%
Kazakhmys (KAZ) 246.00p +4.19%
Serco Group (SRP) 353.40p +3.94%
Capital & Counties Properties (CAPC) 347.90p +3.73%
Taylor Wimpey (TW.) 108.60p +3.13%
Bellway (BWY) 1,485.00p +3.05%
Dixons Retail (DXNS) 48.00p +3.00%
Cable & Wireless Communications (CWC) 53.75p +2.97%
Berkeley Group Holdings (The) (BKG) 2,412.00p +2.90%
FTSE 250 - Fallers
Pace (PIC) 337.00p -7.06%
Brown (N.) Group (BWNG) 465.00p -4.46%
Petra Diamonds Ltd.(DI) (PDL) 157.90p -3.37%
AL Noor Hospitals Group (ANH) 1,000.00p -2.72%
Just Retirement Group (JRG) 165.90p -2.58%
Playtech (PTEC) 640.50p -2.36%
Phoenix Group Holdings (DI) (PHNX) 676.00p -2.24%
Xaar (XAR) 761.00p -2.00%
ITE Group (ITE) 224.80p -1.96%
Telecity Group (TCY) 710.00p -1.87% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed after US jobs, Ukrainian offensive - Many rebel casualties during Ukrainian offensive
- Euro and sterling largely unchanged despite US jobs report
- Stronger than forecast increase in US non-farm payrolls
FTSE-100: 0.20%
Dax-30: -0.49%
Cac-40: -0.65%
FTSE Mibtel 30: -0.01%
Ibex 35: 0.15%
Stoxx 600: -0.22%
European equities were for the most part lower on the day by the close, despite the release of what at first glance appeared to be a much stronger than expected reading on the US labour market, although analysts were disappointed by the sharp drop seen in the labour force participation rate and other "weak" details of the release.
Important economic indicators were also released during the morning session in Europe, with the emphasis increasingly being placed on what they tell us about the sustainability of debt burdens in the Eurozone and the need – or not - for the ECB to act on quantitative easing.
The Eurozone's unemployment rate remained unchanged during March, standing at 11.8% for a fourth month. It means that excess capacity in the labour market will continue to pressure prices lower. Furthermore, unemployment in Germany continues to be half that in France, for example, Capital Economics pointed out.
In parallel, a preliminary reading on the Eurozone's manufacturing sector was revised slightly higher, to 53.4 from 53 in the month before.
Acting as a backdrop, Ukraine launched an offensive against rebels in the city of Slovyansk. Late in the afternoon the BBC cited the country's interim President as saying that pro-Russian rebels had been killed, injured and arrested during the offensive.
According to a Kremlin spokesman, the action has killed hopes for the 'de-escalation' agreement reached between the two countries in Geneva last month.
Also worth noting, gold futures were heading towards a second consecutive weekly drop, which some reports are linking to selling by exchange traded funds.
Copper futures on the other hand were on track to confirm their largest drop in seven weeks, with market commentary attributing the move to progress on Wednesday's latest move by the US Fed to reign in its asset purchase programme.
Pfizer raises bid for AstraZeneca, Anglo-Swedish group says no
US pharmaceuticals giant Pfizer raised its offer for British rival AstraZeneca to £50 from £46.61 beforehand, for a 39% premium versus the Anglo-Swedish company's market value on January 3rd. The UK-listed firm rejected the terms of the offer as inadequate, adding that it "significantly under-valued" the company.
Shares of RBS spiked higher from technical support towards 300p after unveiling first quarter profits that tripled analysts' expectations.
German chemicals powerhouse BASF saw operating profits, at the EBIT (earnings before interest and taxes) level, hit €2.1bn, versus the €2.12bn anticipated by markets.
From a sector standpoint the largest losses were to be seen in the following industrial groups: Retail (-1.29%), Personal and Household goods (-1.11%) and Automobiles&Parts (-1.08%).
Euro moves slightly lower
The euro/dollar was still exactly 0.04% lower at 1.3860 by the end of trading.
Front-month Brent crude futures were advancing 0.847% to the $108.68/barrel mark on the ICE. |
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| | US Market Report | | US open: Stocks post small gains despite strong jobs report - NFPs up 288,000, jobless rate drops
- Participation rate, wage growth fall
- Factory orders miss forecast
Dow Jones: 0.31%
Nasdaq: 0.33%
S&P 500: 0.34%
Stocks posted only small gains on Friday despite a much better-than-expected employment report, as traders were underwhelmed with the lowest jobless rate in five and a half years.
The three main equity indices were showing increases of around 0.3% shortly after the opening bell.
Non-farm payrolls increased by an impressive 288,000 in April, well ahead of the 220,000 rise expected by analysts and the previous month's initial reading of 192,000. Figures for March and February were revised higher by a combined 36,000.
Meanwhile, the unemployment rate dropped to 6.3%, from 6.7% in March. The consensus forecast was for a smaller fall to 6.6%.
However, not all aspects of the report were positive, with the participation rate falling to 62.8% from 63.2% and wage growth slowing to 1.9% from 2.1%.
Analysts at Berenberg said that weak wage growth during the month "gives the Fed room for patience".
"But wages are a lagging indicator. Perhaps the participation rate is not rising because economic growth is not yet strong enough. But the longer it doesn't rise, the bigger the risk that there is actually not as much slack as the Fed has assumed," they said.
In other economic news, factory orders rose by just 1.1% in March, down from a revised 1.5% gain the month before and below the 1.5% growth expected by analysts.
Pfizer falls as AstraZeneca rejects offer
Pharmaceutical group Pfizer fell after its sweetened $63bn takeover offer for AstraZeneca was rejected by the Anglo-Swedish group's board. AstraZeneca said that the new terms of the proposal were "inadequate" and "substantially under-value[d]" the company.
Oil major Chevron rose despite a lower-than-expected first-quarter profit as production and crude prices weakened. Earnings fell to $4.5bn from $6.2bn the previous year.
10-year US Treasury bond yields were up six basis points at 2.68% after the data.
Meanwhile, front month West Texas crude futures were 0.5% higher $99.04/barrel on NYMEX. |
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| | Broker Tips | | Broker tips: RBS, InterContinental, SSE, Resolution Shares in RBS jumped on Friday after the company beat forecasts with its first-quarter results as pre-tax profits doubled. Analysts, however, chose to remain cautious on the outlook for the UK bank.
Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers, said that the quarterly performance was "respectable", but the bank is still in the midst of dealing with its legacy issues and warned of higher costs later in the year due to restructuring and the possibility of further regulatory fines.
Similarly, Analyst Ian Gordon from Investec said that while the results offered "welcome relief" for shareholders, "all is not quite so rosy" as the 'beat' would suggest.
Killik & Co has maintained a 'buy' recommendation for Holiday Inn and Crowne Plaza owner InterContinental Hotels Group after a "strong set of first-quarter results" from the company.
"We remain positive on the shares, given the potential for growth driven by economic recovery, an attractive pipeline, margin enhancement and balance sheet utilisation."
UBS has hiked its target for SSE from 1,475p to 1,620p and maintained a 'buy' rating, saying that the utility group's dividend yield is both highly attractive and sustainable.
The bank said that dividend yields across the European utilities sector are "increasingly attractive" yet "SSE's 6% divi yield and real growth policy is a standout".
Resolution's share price was making gains on Friday after Credit Suisse upgraded the stock from 'underperform' to 'neutral', saying that it sees a "greater balance of risk and opportunity" ahead of the insurer's first-quarter update next week.
Credit Suisse expects Resolution to "soothe investor concerns" on May 7th regarding the recent political and regulatory developments in the UK life and savings market. | | |
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