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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: Miners drag FTSE to negative finish - FTSE closes down 26.78 points at 6,844.51
- Fenner, miners provide drag
- UK consumer confidence out of the red
techMARK 2,812.27 +0.10%
FTSE 100 6,844.51 -0.39%
FTSE 250 16,010.25 +0.35%
Miners dragged the FTSE to a negative finish in today's session, following what one analyst described as a "directionless" day of trading.
The top tier index closed 26.78 points lower at 6,844.51.
Mining stocks were trading firmly in the red as iron ore prices headed for their sixth consecutive monthly decline, the longest losing streak on record.
Meanwhile, concerns about a slowdown in China were also having an impact on stocks, as well as a profit warning from Fenner, which makes conveyor belts for the mining industry.
"The day has seen a range of just over 30 points for the FTSE 100, with the 6870-6880 range once again proving too much for the index," IG Chief Market Strategist Brenda Kelly said.
"Most of the damage has been done by miners, who are down on China concerns and slumping iron ore prices, although banks are decidedly mixed as the market digests the news of a possible jumbo fine for BNP Paribas that has sent shares in the French bank down to eight-month lows.
"The FTSE continues to pose a nagging question about its upward progress, and it will have escaped few people's notice that current levels have been followed by swift and brutal selling. Aimless trading cannot go on forever, and the longer we fail to push towards 7,000 the greater the likelihood that another trip to 6,500 is in order."
UK consumer confidence out of the red for first time in nine years
The GfK barometer of consumer confidence in the UK for May improved to a reading of 0 in comparison with -3 the month before.
The consensus estimate had been for a print of -1. May's data marked the first non-negative reading since the same month of 2005.
In other macro news, the pace of economic growth in Britain picked up in May to its fastest since 2003, according to the Confederation of British Industry (CBI). A positive balance of 35% of respondents to the survey said activity had accelerated during the month, versus 25% in April.
The UK economy seemed to have continued to grow strongly going into the second quarter thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions, the business lobby added.
Meanwhile, the UK public's expectations for inflation over the coming year rose to 2.1% in May from 2% in the previous month, according to a YouGov survey.
Inflation is forecast to increase to 3.1% in the next five to 10 years, compared to an April estimate of 2.9%.
Citi, which sponsors the survey, said the inflation expectations are not high enough to force the Bank of England to raise interest rates regardless of the pace of economic growth.
"But nor do trends in inflation and inflation expectations justify the Monetary Policy Committee keeping rates 'low for longer' in the face of strong economic growth and rising capacity use," Citi added.
Miners slide on iron ore and China concerns
Mining stocks were trading firmly in the red as iron ore prices were headed for their sixth consecutive monthly decline, the longest losing streak on record.
Meanwhile, concerns about a slowdown in China were also having an impact on stocks, as well as a profit warning from FTSE 250-listed Fenner, which makes conveyor belts for the mining industry.
Anglo American, Rio Tinto, BHP Billiton, Fresnillo, Randgold Resources, Antofagasta, and Glencore were all big losers today.
Rising iron ore supplies from Australia and Brazil have prompted a 9% fall in prices this month, with the value of the commodity having now fallen every month since December. This is the longest string of monthly losses since data from The Steel Index began in November 2008, according to Bloomberg.
DIY retailer Kingfisher was continuing to fall after an underwhelming first-quarter statement yesterday as Barclays Capital cut the shares to 'equal weight' and trimmed its target.
Meanwhile, medical device maker Smith & Nephew continued to soar as bid speculation continued to drive the stock higher. While US peer Stryker was forced to publicly deny reports that it was working on a bid for the company, its boss yesterday confirmed in an interview that the company had in fact been in the early stages of considering a transaction but was not ready to make an offer. UBS this morning added the stock to its 'M&A Watch List'.
On the second tier, polymer products maker Fenner slumped after warning that underlying group profit before tax for the current fiscal year could be reduced by as much as 10-15% below the current consensus market expectation of £77.6m. |
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FTSE 100 - Risers
Admiral Group (ADM) 1,458.00p +2.10%
Smith & Nephew (SN.) 1,046.00p +1.65%
Sainsbury (J) (SBRY) 346.10p +1.61%
Marks & Spencer Group (MKS) 449.20p +1.45%
Severn Trent (SVT) 1,968.00p +1.39%
Whitbread (WTB) 4,186.00p +1.16%
Carnival (CCL) 2,425.00p +1.08%
InterContinental Hotels Group (IHG) 2,355.00p +1.03%
Persimmon (PSN) 1,338.00p +0.91%
United Utilities Group (UU.) 868.00p +0.87%
FTSE 100 - Fallers
Anglo American (AAL) 1,457.50p -5.66%
Rio Tinto (RIO) 3,057.00p -4.12%
BHP Billiton (BLT) 1,868.00p -3.74%
Fresnillo (FRES) 806.00p -3.47%
Randgold Resources Ltd. (RRS) 4,357.00p -3.01%
Antofagasta (ANTO) 788.50p -1.99%
Johnson Matthey (JMAT) 3,212.00p -1.89%
CRH (CRH) 1,637.00p -1.62%
Glencore (GLEN) 323.35p -1.49%
Kingfisher (KGF) 392.00p -1.26%
FTSE 250 - Risers
Redefine International (RDI) 59.20p +5.53%
Xaar (XAR) 864.00p +5.24%
Supergroup (SGP) 1,166.00p +5.14%
Perform Group (PER) 277.00p +4.53%
Euromoney Institutional Investor (ERM) 1,189.00p +4.48%
Ocado Group (OCDO) 386.70p +3.81%
Diploma (DPLM) 654.00p +3.81%
Dairy Crest Group (DCG) 467.00p +3.78%
Foxtons Group (FOXT) 329.90p +3.74%
Hikma Pharmaceuticals (HIK) 1,705.00p +3.46%
FTSE 250 - Fallers
Fenner (FENR) 350.00p -10.19%
Evraz (EVR) 104.80p -4.03%
Paragon Group Of Companies (PAG) 375.70p -3.37%
Restaurant Group (RTN) 598.00p -2.84%
Home Retail Group (HOME) 188.40p -2.79%
African Barrick Gold (ABG) 217.00p -2.56%
Grainger (GRI) 217.00p -2.47%
Vedanta Resources (VED) 1,100.00p -2.40%
BlackRock World Mining Trust (BRWM) 457.50p -2.29%
Lonmin (LMI) 256.90p -2.25% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed after slate of economic data - German retail sales rise on the year
- Spanish inflation eases
- UK consumer confidence increases
- US household purchases fall
- US consumer confidence drops
FTSE 100: -0.39%
DAX: 0.04%
CAC 40: -0.24%
FTSE MIG 0.55%
IBEX 35: 0.60%
Stoxx 600: -0.08%
European stocks were little changed following a batch of data in the euro-area, the UK and the US.
German retail sales jumped 3.4% year-on-year in April following a 1.1% drop the previous month, exceeding the forecast for a 1.5% increase. On the month, however, sales fell 0.9% compared to a 0.1% gain in March and analysts' expectations for a 0.2% rise.
Spanish inflation slowed in May, driven by falls in food and drink. Prices rose 0.2% this month from a year earlier, down from 0.4% in April, fuelling fears over Eurozone deflation.
The European Central Bank (ECB) President Mario Draghi has said that he is ready to act next month if needed to address low inflation in the euro-area but has insisted that he sees no threat of deflation.
In the UK, GfK's consumer confidence index rose to 0 in May from -3 a month earlier, beating analysts' estimates of -2. It marked the first non-negative reading since May 2005.
Stateside, household purchases fell 0.1% last month following a 1% increase in March, the Commerce Department said today, surprising analysts who had predicted a 0.2% rise.
Another US report showed consumer confidence dropped more than forecast in May. The Thomson Reuters/University of Michigan final index of sentiment dropped to 81.9 in May from 84.1 in April. Economists had pencilled in a reading of 82.5 after an initial reading of 81.8.
Societe Generale
Societe Generale slumped after Les Echos reported that the French bank's Russian unit posted a decline in first-quarter profit.
Fenner declined as the maker of conveyor belts said it expects underlying pre-tax profit to be 10-15% lower than analysts' estimates of £77.6m due to tough trading conditions in the US coal sector.
BNP Parabis dropped on reports US authorities are seeking more than $10bn from the bank to settle investigations into dealings with sanctioned countries.
A gauge of commodity producers, including Rio Tinto and BHP Billiton, edged lower as iron ore prices fell.
Salamander Energy advanced on reports Cia Espanola de Petroleos SAU is considering a €700m bid for the UK oil explorer.
The euro rose 0.26% to $1.3638.
Brent crude futures fell $0.585 to $109.330 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks little changed after consumer spending data US stocks were little changed as consumer spending unexpectedly declined in April.
Household purchases fell 0.1% last month following a 1% increase in March, the Commerce Department said today, surprising analysts who had predicted a 0.2% rise.
"We're not too concerned by the falls in spending in April (0.1% month-on-month in nominal terms and 0.3% in real terms) as they were partly due to lingering weather effects," Capital Economics said.
Meanwhile, a report on consumer confidence is due out this afternoon. The University of Michigan is likely to revise its consumer confidence index upwards to 82.5 in May from 81.8 in April, according to forecasts.
The Chicago purchasing managers' index (PMI) is expected to fall to 60.8 in May from 63 the previous month.
The data comes as Federal Reserve President Kasas City Esther George said the central bank should begin raising interest rates soon after it winds down its bond buying programme in response to improving economic conditions.
"Many of the rules offering policy guidance on the federal funds rate—such as the 'Taylor rule' and its variants—are already or close to prescribing a policy rate higher than the current funds rate," she said.
"[…] In this environment, the pressure to quickly back away from a rising rate policy will be significant; such pressures will need to be resisted. If not, we risk moving into a confusing stop-and-go policy environment."
BNP Paribas
BNP Paribas dropped after a report revealed US authorities are seeking more than $10bn to settle federal and state investigations into dealings with sanctioned countries including Sudan and Iran.
Google declined as the company moved to comply with the European Union court's ruling this month that backs the right of citizens to have their online information deleted.
General Motors slumped as the automaker said it wants a New York court to handle lawsuits arising from its ignition defect recall.
The US 10-year yield held at 2.47%.
West Texas Intermediate crude futures fell $0.769 to $102.790 per barrel, according to the ICE. |
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| | Friday broker round-up UPDATE | | ASOS: N+1 Singer reduces target from 5300p to 4100p, while staying with its hold recommendation.
Cairn Energy: JP Morgan cuts target from 315p to 279p and maintains an overweight rating.
Cobham: Canaccord Genuity increases target from 285p to 320p and reiterates a hold recommendation.
Edge Resources: Sanlam Securities shifts target from 10p to 14p and keeps its buy recommendation.
Eland Oil & Gas: Westhouse Securities ups target from 104p to 123p upgrading from sell to neutral.
EnQuest: Canaccord Genuity moves target from 175p to 185p and leaves its buy recommendation unchanged.
Fenner: FinnCap reduces target from 450p to 330p eith a hold recommendation. Numis downgrades from add to hold with a target of 400p. N+1 Singer places both its target (prev.: 395p) and its hold recommendation under review. Investec cuts target from 360p to 320p and stays with its sell recommendation.
James Fisher: Sanlam Securities initiates with a target of 1600p and a buy recommendation.
Kighfisher: Barclays cuts target from 460p to 420p downgrading to equal-weight.
Mitchells & Butlers: Numis upgrades from add to buy with a target of 525p. Citi upgrades to buy with a target of 500p.
Petroceltic International: Westhouse Securities lowers target from 250p to 240p, while retaining a buy recommendation.
Shanks Group: Credit Suisse ups target from 100p to 125p and upgrades from neutral to outperform.
Smith & Nephew: UBS raises target from 1000p to 1100p and maintains a buy recommendation.
Tate & Lyle: UBS ups target from 600p to 630p, but still recommends selling. Credit Suisse cuts target from 700p to 650p and downgrades from neutral to underperform.
Vectura Group: Berenberg moves target from 200p to 210p and keeps a buy recommendation. | | |
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