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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 marginally lower at close, eyes on elections, Ukraine - FTSE closes down 4.81 points to 6,815.75
- Sentiment weighed by Bank Holiday, elections, Ukraine
- US new home sales rise
techMARK 2,758.00 +0.51%
FTSE 100 6,815.75 -0.07%
FTSE 250 15,706.03 +0.20%
It was a negative finish for UK stocks in the final session of the week, with investors focused on the Bank Holiday, European and Ukraine elections, while several stocks retreated from gains seen earlier in the week.
The FTSE 100 ended the final session of the week 4.81 points lower at 6,815.75.
David Madden, Market Analyst at IG, said: "Heading into the close, the FTSE 100 is stubbornly in the red, even as most markets gain in the final session before the bank holiday weekend.
"Although off the lows, the FTSE 100 is opting out of a global move higher for a second consecutive day. A long weekend, pending euro election results and some Ukraine-related worries have combined to keep risk appetite at bay, while the less than stellar arrival of Saga on the London market has dampened sentiment as well.
Saga completed its initial public offering today, although the performance of the shares was rather disappointing, rising only 0.5p from their 185p starting price.
In banking news, RBS/NatWest customers suffered another technical problem leaving mobile banking users unable to access their accounts for a period of around six hours.
Over at Barclays investors shrugged off a £26m fine related to gold price setting.
It was a quiet day on the UK macro front, with the focus firmly on company news and events in the rest of the world.
Looking at the wider picture across Europe, CMC Markets's Jasper Lawler noted that "uncertainty over the birth of four-party politics in the UK as well as low volumes ahead of the holiday weekend meant the FTSE 100 lagged European counterparts on what was generally fairly flat trading."
In Germany, first quarter GDP was confirmed at 0.8%, much of which was attributed to the mild winter, which as Lawler explained, is "thought to have driven consumers to the shops earlier than usual which drove up growth despite a drop in exports".
Putin says he will respect results of Ukrainian elections
Speaking at an economic conference in St. Petersburg, Russian President Vladimir Putin has said he will respect the outcome of Ukraine´s presidential elections this Sunday, according to BBC reports.
Putin added that it is his belief the country has entered into "full-scale civil war".
US new home sales hit 6.4%
Over in the States, existing home sales rose by 6.4% to reach an annualised rate of 433,000 last month, according to the US Department of Commerce. The consensus estimate had been for an increase to 425,000.
The estimate for the previous month was revised higher, to a rate of 407,000, from the preliminary estimate of 384,000.
In Capital Economics's view, "alongside yesterday's modest rise in existing home sales, the data indicate that there is still life in the US housing recovery".
"The net result is that the new homes market is now thought to have suffered a far less dramatic wobble in the early stages of this year than had previously been thought," it explained, although added that looking at the bigger picture, the figures are "historically low"".
BG Group, Burberry lead FTSE lower
BG Group was at the bottom of the pile, extending yesterday's losses which came despite positive news about a well it holds a stake in in Brazil. The weakness may be related to Grupo Santander downgrading the stock to 'hold' earlier in the week.
SABMiller retreated following yesterday's strong rise, which came on the back of a strong set of annual results.
The group posted a 2% rise in adjusted pre-tax profit to $5,712, while the dividend was increase to 105 cents, up from 101 cents a year earlier.
Sector peer Diageo tracked the stock lower.
Burberry led the personal goods sector lower following gains earlier this week after it posted a 17% rise in annual revenue to £2.3bn, boosted by strong retail sales. The luxury fashion house reported adjusted pre-tax profit of £461m in the year to end of March 2014, up 8% on the previous year.
Numis sent Intertek firmly lower after cutting its rating to 'hold' from 'buy', and lowering its target from 3,782p to 3,100p.
Meanwhile, platinum producer Anglo American jumped after it was announced that its subsidiary, Amplats, was continuing to engage in supervised mediation with the Association of Mineworkers and Construction Union (AMCU) at the Labour Court in a bid to end workers' strike action.
London Stock Exchange also raced ahead after Goldman Sachs upgraded it from 'sell' to 'neutral'.
IG's madden noted that "the day has seen the return of some buying in AstraZeneca, following Blackrock's call for détente between the two pharma firms that has given the boost to talk that discussions might restart sooner than anticipated". |
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| | FTSE 100 - Risers
Mondi (MNDI) 1,080.00p +2.66%
London Stock Exchange Group (LSE) 1,852.00p +2.38%
Anglo American (AAL) 1,573.50p +2.31%
Ashtead Group (AHT) 865.50p +1.70%
Antofagasta (ANTO) 799.00p +1.65%
Lloyds Banking Group (LLOY) 75.96p +1.54%
easyJet (EZJ) 1,572.00p +1.42%
Barclays (BARC) 246.60p +1.27%
Royal Mail (RMG) 525.50p +1.25%
AstraZeneca (AZN) 4,328.00p +1.24%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,967.00p -1.75%
Burberry Group (BRBY) 1,503.00p -1.70%
BG Group (BG.) 1,213.50p -1.66%
Next (NXT) 6,550.00p -1.65%
Persimmon (PSN) 1,321.00p -1.42%
G4S (GFS) 251.50p -1.33%
SABMiller (SAB) 3,327.50p -1.32%
United Utilities Group (UU.) 846.00p -1.28%
Hargreaves Lansdown (HL.) 1,178.00p -1.26%
Tullow Oil (TLW) 841.00p -1.23%
FTSE 250 - Risers
Go-Ahead Group (GOG) 2,113.00p +8.97%
BTG (BTG) 582.00p +6.40%
Lonmin (LMI) 261.40p +5.40%
Supergroup (SGP) 1,020.00p +3.66%
Foxtons Group (FOXT) 310.20p +2.72%
Vedanta Resources (VED) 1,078.00p +2.67%
Hellermanntyton Group (HTY) 307.90p +2.63%
Kazakhmys (KAZ) 266.40p +2.50%
National Express Group (NEX) 275.80p +2.22%
Greencore Group (GNC) 280.50p +2.07%
FTSE 250 - Fallers
esure Group (ESUR) 249.50p -2.65%
Rank Group (RNK) 156.10p -2.44%
CSR (CSR) 553.50p -2.12%
SIG (SHI) 182.00p -1.73%
Unite Group (UTG) 406.90p -1.71%
JD Sports Fashion (JD.) 1,632.00p -1.69%
ITE Group (ITE) 233.70p -1.68%
Dunelm Group (DNLM) 915.50p -1.66%
Halfords Group (HFD) 480.00p -1.64%
Genus (GNS) 1,063.00p -1.48% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rise ahead of long weekend Stateside - German economic output may be close to a peak
- Putin will respect results of May 25th Ukraine elections
- Fitch upgrades Greece's debt rating
- S&P upgrades Spain's debt rating
FTSE 100: -0.07%
DAX: 0.48%
CAC 40: 0.33%
FTSE MIB: 1.83%
IBEX 35: 0.22%
Stoxx 600: 0.16%
The majority of the main European indexes ended slightly higher on Friday after Russian President Vladimir Putin indicated that he would respect the results of the next Sunday´s presidential elections and on the heels of much better-than-expected US housing figures.
As well, many traders had likely already closed out their positions ahead of the long weekend in the UK and US, thereby alleviating some of the selling pressure.
Nevertheless, the main piece of economic data, the German IFO index, printed lower than expected.
The business confidence gauge slipped to a reading 110.4 from 111.2 in the month before (consensus: 110.9).
Analysts at Capital Economics pointed out that the dip in the 'current situation' gauge may be an indication that the country's output is nearing a peak. “We expect annual GDP growth of about 2% this year and next, which will not be strong enough to drive a rapid recovery across the Eurozone as a whole or to eradicate the threat of deflation,” the think-tank said.
On the positive side of things, initial reports indicated that Euro-sceptic parties may have lost some ground in France and the Netherlands, although investors were keenly awaiting the results of Sunday´s elections to the European Parliament.
There was also good news from Europe's periphery, with the rating agencies upgrading the long-term debt of Spain and Greece.
Swiss employment firm Adecco was an early riser after UBS upgraded the stock to a 'buy' from 'sell' beforehand.
From a sector standpoint the best-performing industrial groups on the DJ Stoxx 600 were: Basic resoruces (1.06%), Automobiles (0.97%) and Banks (0.68%).
German gross domestic product expanded at an 0.8% quarter-on-quarter clip during the first three months of the year, as expected.
Euro slightly lower
The euro fell 0.28% to $1.3626.
Brent crude futures finished slightly higher by 0.045% to $110.41 per barrel. |
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| | US Market Report | | US open: Stocks edge higher following housing data - Strong existing home sales figures
- Aeropostale shares tumbles 19%
- GE extends deadline for Alstom offer
Dow Jones Industrials: 0.30%
Nasdaq Composite: 0.23%
S&P 500: 0.24%
About an hour into the session US equities were moving higher and at their best levels of the day in the wake of much stronger than expected figures on US new home sales and ahead of the long Memorial Day weekend.
Shares of Hewlett Packard jumped 7% in early trading. Although the company announced its third straight fall in annual revenues it results were in line. Investors seem to have also been cheered by the company´s plans to cut its workforce by 16,000 people.
Approximately 75% of those S&P 500 companies which have already reported their results this season beat analysts' estimates for profit. Meanwhile, 53% managed to beat their sales projections, data from Bloomberg showed.
Acting as a backdrop, speaking at an economic conference in St.Petersburg Russian President Vladimir Putin said he will respect the outcome of Ukraine´s presidential elections this next Sunday.
Also with positive implications for market sentiment, Chinese Premier Li said China will maintain reasonable rates of money and loan growth.
Back on the corporate front, industrial conglomerate General Electric acquiesced to a request from French authorities to extend for another three weeks its deadline to purchase Alstom´s energy units for $17bn.
Friday it was Bloomberg´s turn to report on the possible interest of Reynolds American´s (whose biggest shareholder is British American Tobacco) in Lorillard.
Shares in fashion retailer Aeropostale tumbled after the firm unveiled a 13% drop in first quarter like-for-like sales.
Strong housing data
Existing home sales rose by 6.4% to reach an annualised rate of 433,000 last month, according to the US Department of Commerce.
The consensus estimate had been for an increase to 425,000.
Furthermore, the estimate for the previous month was revised higher, to a rate of 407,000, from the preliminary estimate of 384,000.
Yields slip lower
US 10-year Treasury yields are now lower by three basis points to 2.53%.
Front month West Texas crude futures 0.25% to $104/barrel on the NYMEX.
S&P 500 - Risers
Hewlett-Packard Co. (HPQ) $33.56 +5.60%
GameStop Corp. (GME) $38.72 +4.99%
Intuit Inc. (INTU) $79.53 +2.66%
Discovery Communications Inc. Class A (DISCA) $77.15 +1.71%
CBS Corp. (CBS) $60.22 +1.57%
Western Digital Corp. (WDC) $84.77 +1.35%
Xerox Corp. (XRX) $11.96 +1.18%
TripAdvisor Inc. (TRIP) $92.07 +1.16%
Garmin Ltd. (GRMN) $56.47 +1.15%
Lam Research Corp. (LRCX) $59.84 +1.08%
S&P 500 - Fallers
Gilead Sciences Inc. (GILD) $81.60 -1.57%
Patterson Companies Inc. (PDCO) $38.67 -1.42%
IntercontinentalExchange Group Inc (ICE) $191.10 -1.42%
Salesforce.Com Inc. (CRM) $52.60 -1.26%
Perrigo Company plc (PRGO) $135.20 -1.19%
Vertex Pharmaceuticals Inc. (VRTX) $70.42 -1.07%
Crown Castle International (CCI) $75.58 -1.06%
Regeneron Pharmaceuticals Inc. (REGN) $295.19 -1.04%
Harley-Davidson Inc. (HOG) $70.90 -1.03%
Edwards Lifesciences Corp. (EW) $80.60 -0.98%
Dow Jones I.A - Risers
Visa Inc. (V) $211.14 +0.85%
Nike Inc. (NKE) $75.37 +0.65%
Cisco Systems Inc. (CSCO) $24.53 +0.62%
Caterpillar Inc. (CAT) $103.61 +0.51%
Walt Disney Co. (DIS) $82.76 +0.50%
Merck & Co. Inc. (MRK) $56.71 +0.39%
Chevron Corp. (CVX) $124.10 +0.38%
Boeing Co. (BA) $132.33 +0.37%
E.I. du Pont de Nemours and Co. (DD) $67.74 +0.34%
Exxon Mobil Corp. (XOM) $101.80 +0.30%
Dow Jones I.A - Fallers
JP Morgan Chase & Co. (JPM) $54.31 -0.44%
Home Depot Inc. (HD) $78.56 -0.29%
Pfizer Inc. (PFE) $29.58 -0.27%
General Electric Co. (GE) $26.44 -0.25%
McDonald's Corp. (MCD) $102.28 -0.17%
Goldman Sachs Group Inc. (GS) $159.72 -0.08%
Verizon Communications Inc. (VZ) $49.42 -0.05%
Procter & Gamble Co. (PG) $80.65 -0.00%
Nasdaq 100 - Risers
Intuit Inc. (INTU) $79.53 +2.66%
Illumina Inc. (ILMN) $157.87 +2.53%
Vimpelcom Ltd Ads (VIP) $8.07 +2.02%
Discovery Communications Inc. Class A (DISCA) $77.15 +1.71%
Western Digital Corp. (WDC) $84.77 +1.35%
TripAdvisor Inc. (TRIP) $92.07 +1.16%
Keurig Green Mountain Inc (GMCR) $114.67 +1.15%
Garmin Ltd. (GRMN) $56.47 +1.15%
Charter Communications Inc. (CHTR) $139.55 +1.00%
Amazon.Com Inc. (AMZN) $307.77 +0.94%
Nasdaq 100 - Fallers
Gilead Sciences Inc. (GILD) $81.60 -1.57%
Vertex Pharmaceuticals Inc. (VRTX) $70.42 -1.07%
Regeneron Pharmaceuticals Inc. (REGN) $295.19 -1.04%
Sba Communications Corp. (SBAC) $100.46 -1.01%
Sirius XM Holdings Inc (SIRI) $3.24 -0.92%
Dollar Tree Inc (DLTR) $52.83 -0.90%
Amgen Inc. (AMGN) $113.84 -0.89%
Equinix Inc. (EQIX) $193.95 -0.76%
Wynn Resorts Ltd. (WYNN) $206.82 -0.73%
Liberty Media Corporation - Class A (LMCA) $125.00 -0.71% |
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| | Broker Tips | | Broker tips: Antofagasta, Go-Ahead, SAB Miller Things are looking down for Chile-focused miner Antofagasta, Investec says, due mainly to the strength in sterling, an expected increase in the tax rate and the uncertain near-term outlook for the price of copper.
The effective tax rate is seen rising to 35% from fiscal year 2017 in comparison to 29% beforehand. In particular, the full 35% rate is expected to be applied to overseas cash returns.
As a result the broker has cut its price target for the stock to 690p (from 715p).
In parallel, the investment in capacity of recent years will probably see moderate oversupply over the next year or two, which may further undermine prices. To that one must add the near-term uncertainty about Chinese demand.
Hence Investec´s decision to maintain its 'sell' recommendation.
In fact, at spot copper prices their price target would drop to 643p and fiscal year 2014 earnings per share (EPS) to 76 cents. Nevertheless, a tighter market and price rises are seen post 2016.
Furthermore, the present government in Chile is less mining friendly than the previous one.
Lastly, companies in the sector face increasing challenges in the form of power and water constraints. These require investing in non-mining services so as to guarantee that operations can continue. "We view this as a hidden cost of operating in the country."
The broker´s price target is based on a 50:50 mix of net present value (NPV) and a fiscal year 2015 eearnings per share multiple of 15.
Train and bus group Go-Ahead has pulled off a major coup by winning the Thameslink rail super-franchise, according to Investec.
The seven-year management contract will give the group certainty about its rail earnings for a number of years and is a major shareholder value-enhancing contract, Investec said.
It also brings forward the day when investors might expect a dividend per share increase, the broker added.
"We lift our target to 2630p from 2300p to reflect the value of the award to the group," Investec's John Lawson said in a note.
Go-Ahead beat off competition from FirstGroup and Stagecoach for the enlarged Thameslink Southern Great Northern (TSGN) franchise.
TSGN starts in September and will include the First Capital Connect routes from King's Cross and Moorgate to Cambridge and Peterborough, together with the Southern and Gatwick Express operations and parts of Southeastern, which runs trains between London and Kent.
SABMiller´s latest annual results beat the analyst consensus by 1 per cent, but they were low quality as lower corporate costs and asset disposals accounted for much of that, Credit Suisse told clients in a note on Friday morning.
Going forward the company expects to save $500m in costs. However, that will only add about 30 basis points (bps) per year to its margins. However, the firm still needs to raise its margins by another 45 basis points per annum to reach the double digit percentage rate of growth in earnings per share implied by its medium-term guidance per region.
Unfortunately, the brewer´s track record in delivering on margin expansion is mixed, although in the past it has achieved superior top line growth,
The key now to achieving the company´s targets is Europe. The region has been the biggest drag on margins in recent years (fiscal year 2011-2014 EBITA margins fell by 520bps), and therefore stabilisation in this region is key, which should be supported by forthcoming restructuring efforts.
In the company´s favour, on the other hand, in terms of meeting its EPS targets, is a falling tax rate.
Even so, the stock is trading on a 13% premium on its forward price-to-earnings (PE) multiple to European consumer staples (versus 8% historically).
Despite all of the above Credit Suisse kept its neutral recommendation on the shares and raised its price target to 34 pounds from 31 beforehand, as it rolled forward its price targets.
However, "with continued uncertainty in emerging markets (represent circa 70% of sales), we maintain a cautious stance in the near term for now," the broker added. | | |
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