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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: Negative finish, weighed by Ukraine, Barclays, AstraZeneca - FTSE closes down 23.86 points at 6,798.56
- Barclays slumps after poor Q1
- OECD predicts 3.2 per cent growth in 2014
techMARK 2,792.09 -0.09%
FTSE 100 6,798.56 -0.35%
FTSE 250 15,938.69 +0.05%
UK stocks ended the day in the red, dragged by developments in Ukraine and a poor performance by Barclays, AstraZeneca and Aberdeen Asset Management.
The FTSE 100 closed down 23.86 points at 6,798.56.
Meantime, sterling hit an intraday high at 1.6999 versus the US dollar ahead of the next MPC meeting, likely as traders try and test Governor Carney´s patience, as they are sometimes wont to do.
Brenda Kelly, Chief Market Strategist at IG: "The FTSE 100 continues to flounder this afternoon, after results from Barclays knocked the index back from a nine-week high. Figures from the bank show that it still has a lot of problems to iron out, as Anthony Jenkins looks to transform the financial titan from an emblem of uninhibited capitalism to one more suited to the post-crisis world."
The negatives were somewhat offset by predictions the UK economy will grow 3.2% in 2014, according to the Organisation for Economic Co-operation and Development (OECD). The OECD said growth was being driven by higher levels of investment and private consumption.
Looking further ahead, growth in 2015 is currently expected to be 2.7%, when it also expects unemployment to fall to 6.5% from its predicted figure of 6.9% this year.
In other UK macro news, services growth accelerated faster than expected in April thanks to broad-based improvement in the economy, with manufacturing growing especially fast during the month.
Markit's all sector purchasing managers index (PMI) rose from 58.2 in March to a five-month high of 59.4.
In the latest out from Eastern Europe, Russia's Foreign Minister, Sergei Lavrov, has said he won't conduct further talks in Geneva unless pro-Russian opposition groups are also present, saying otherwise "we would just go round in circles".
Speaking after a Council of Europe meeting, he said: "If Russia is ready to commit itself to support these elections and to eliminate this threat and eliminate its support for the extremist elements in Ukraine, we are ready to have such a round of meetings."
That was as Germany advised its citizens in east and south Ukraine to leave as it believes the country is just a "few steps" away from "military confrontation", according to the Telegraph.
Eurozone PMI makes ECB move unlikely, Markit says
Eurozone economic growth was confirmed at a three-year high on Tuesday, according to survey compiler Markit's composite PMI figures which signalled an ongoing expansion for the tenth consecutive month.
Specifically, the final reading for April remained unchanged from the 'flash' estimate of 54. This compared to the prior month's print of 53.1 and was the highest level since May 2011.
Barclays leads the downside after poor quarterly performance
Barclays fell sharply after a weak performance from its investment banking arm contributed to a 5% decline in quarterly adjusted pre-tax profit to £1.7bn in the first quarter. The group said bond trading, currency and commodity (FICC) income in the investment bank declined significantly in the three months to March 31st. The stock was downgraded by Numis Securities from 'add' to 'hold'.
IG's Kelly further commented: "Barclays needs to pull something fairly impressive out at its strategy meeting on Thursday, as it is this that will set the direction for the months to come. Mr Jenkins must continue to rein in the investment bank to suit public tastes, while simultaneously avoiding tipping the division into a death spiral."
The uncertainty surrounding Pfizer's takover bid for AstraZeneca ensured that the stock and its sector peer Shire were both in the bottom 10. According to the Financial Times, AstraZeneca has pressed Prime Minister David Cameron to remain neutral over Pfizer's offer, which was rejected by the board last week.
Persimmon led the UK housebuilders higher today, lifted by Barclays which increased its target on the stock from 1,333.6p to 1,530p.
Sector peer Barratt Developments was also a notable riser.
Both Sainsbury and Morrison were firmly higher ahead of announcements due out from them later this week, despite the fact neither is expected to be particularly positive. |
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FTSE 100 - Risers
Persimmon (PSN) 1,378.00p +3.84%
Sainsbury (J) (SBRY) 333.40p +3.77%
Morrison (Wm) Supermarkets (MRW) 202.00p +2.96%
Intertek Group (ITRK) 2,995.00p +2.29%
Associated British Foods (ABF) 2,963.00p +2.17%
Barratt Developments (BDEV) 382.30p +1.95%
Pearson (PSON) 1,112.00p +1.65%
RSA Insurance Group (RSA) 99.25p +1.59%
easyJet (EZJ) 1,667.00p +1.58%
Tullow Oil (TLW) 898.00p +1.58%
FTSE 100 - Fallers
Barclays (BARC) 245.00p -5.22%
Shire Plc (SHP) 3,359.00p -3.12%
AstraZeneca (AZN) 4,677.50p -2.71%
Coca-Cola HBC AG (CDI) (CCH) 1,445.00p -2.36%
Aberdeen Asset Management (ADN) 435.40p -2.35%
Royal Bank of Scotland Group (RBS) 325.20p -1.96%
WPP (WPP) 1,263.00p -1.79%
William Hill (WMH) 349.70p -1.66%
GKN (GKN) 376.80p -1.59%
Anglo American (AAL) 1,542.50p -1.44%
FTSE 250 - Risers
Soco International (SIA) 440.30p +4.86%
Pace (PIC) 352.90p +4.72%
Fidessa Group (FDSA) 2,345.00p +4.27%
Renishaw (RSW) 1,880.00p +3.58%
Dixons Retail (DXNS) 49.71p +3.56%
ITE Group (ITE) 232.60p +3.47%
Carphone Warehouse Group (CPW) 335.50p +3.42%
Spirent Communications (SPT) 97.75p +3.33%
Enterprise Inns (ETI) 140.50p +3.31%
Grainger (GRI) 224.50p +3.27%
FTSE 250 - Fallers
Balfour Beatty (BBY) 228.60p -20.01%
Ocado Group (OCDO) 329.20p -5.21%
Carillion (CLLN) 358.40p -4.17%
Brown (N.) Group (BWNG) 449.10p -3.42%
SIG (SHI) 190.50p -3.15%
Croda International (CRDA) 2,494.00p -2.77%
Just Retirement Group (JRG) 161.60p -2.59%
Fisher (James) & Sons (FSJ) 1,409.00p -2.49%
Ashmore Group (ASHM) 344.00p -2.38%
Domino's Pizza Group (DOM) 518.50p -2.26% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Euro edges higher ahead of ECB - Ukraine tensions weigh on markets
- Final Eurozone composite PMI confirmed
- Barclays falls, UBS gains after quarterly results
FTSE 100: -0.35%
Dax 30: -0.65%
Cac 50: -0.78%
FTSE Mibtel 30: -0.55%
Ibex 35: 0.04%
Stoxx 600: -0.25%
Stocks in Europe ended lower across the board, with the sole exception of Madrid´s Ibex 35, amid heightened tensions in Ukraine and as investors showed caution ahead of the European Central Bank´s (ECB) policy meeting later in the week.
The Stoxx 600 benchmark index finished the session 0.25% lower.
Heightened tensions in Ukraine kept risk appetite in check after an army helicopter was shot down yesterday by pro-Russian activists near the city of Sloviansk. Deaths have been reported on both sides amid heavy fighting along the eastern border as Kiev continues its so-called 'anti-terrorist' operations.
Jonathan Sudaria, a dealer at Capital Spreads said that markets are "struggling for direction at the moment".
He continued: "The situation in Ukraine looks set to be something that will continue to influence financial markets for a considerable amount of time, and markets will struggle to push much higher until investors can see a real improvement in the situation over in Eastern Europe."
Eurozone composite PMI
Eurozone economic growth was confirmed at a three-year high on Tuesday, according to Markit's composite purchasing managers' index (PMI) which signalled an ongoing expansion for the 10th consecutive month. The final PMI reading for April remained unchanged from the 'flash' estimate of 54. This compared to the prior month's print of 53.1 and was the highest level since May 2011.
However, analysts at ETX Capital highlighted data on Monday which showed that industrial producer price inflation eased and investor confidence missed forecasts. They said: "There's certainly growing fears about low-inflation being a persistent threat in the Eurozone which will trigger a deflationary scenario that could derail the fragile Eurozone recovery."
ETX Capital said that markets are still expecting a "Fed-style quantitative easing 'big bazooka' package" from the ECB, though this is unlikely at Thursday's meeting.
Barclays and UBS in focus
UK bank Barclays was a heavy faller in London, blaming a weak performance in its investment banking arm for a 5% decline in quarterly adjusted pre-tax profit to £1.7bn in the first quarter.
Swiss peer UBS gained after beating forecasts with first-quarter profit growth of 7% to 1.05bn francs.
German luxury car maker BMW declined after reiterating what some analysts described as 'ambitious' 2014 goals. Operating profit during the first three months of the year increased 2.6%, as expected.
First-quarter earnings figures at German sportswear maker Adidas came in below forecasts, but the firm expected improved trading over the coming three months. The stock was more or less flat by midday.
UK-listed infrastructure services group Balfour Beatty was a big mover today, sinking sharply after Chief Executive Andrew McNaughton quit as the company warned on full-year profits.
The euro-dollar ended the day higher $1.3920.
Front month Brent crude futures were standing at $107.72 barrel on the NYMEX at the close. |
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| | US Market Report | | US open: Stocks fall on Ukraine fears, AIG drags financials lower - Ukraine tensions limit risk appetite
- US trade deficit shrinks 3.6 per cent
- AIG drags financials lower
- Office Depot rockets on outlook, store closures
Dow Jones: -0.47%
Nasdaq: -0.44%
S&P 500: -0.41%
US equity markets started Tuesday's session on the back foot as investors scaled back positions amid rising turmoil in Eastern Europe with indices trading near record highs.
Heightened tensions in Ukraine were keeping risk appetite in check after an army helicopter was shot down yesterday by pro-Russian activists near the city of Sloviansk. Deaths have been reported on both sides amid heavy fighting along the eastern border as Kiev continues its so-called 'anti-terrorist' operations.
The Dow Jones Industrial Average, Nasdaq and S&P 500 were all trading around 0.4-0.5% lower within the opening hour.
Financial stocks were among the worst performers after the bell with insurer American International Group reporting a 27% drop in first-quarter profits.
Meanwhile, the OECD dampened sentiment by cutting its forecast for global economic growth this year to 3.4% from 3.6%.
"As the Dow Jones and S&P 500 push towards the top of their ranges at 16,600 and 1,900 respectively, stocks are extra vulnerable to flare ups in Ukraine which is turning increasingly violent," said Market Analyst Jasper Lawler from CMC Markets.
"Any pullbacks should still be limited though as long as Russian troops don't cross the border," he said.
In economic data today, the US trade deficit shrank by 3.6% to $40.4bn in March, more or less in line with forecasts, while the previous month's balance was revised lower.
March's reduction was helped by a 2.2% rise in exports over the month, the biggest increase since June 2013, while imports rose by a lesser 1.7%.
Earnings in focus
AIG as lower early on after reporting that net income dropped to $1.6bn in the first quarter, from $2.2bn the year before. While the company beat forecasts, analysts showed concerns with weaker-than-expected earnings from property and casualty insurance.
Other financial stocks such as Citigroup, Goldman Sachs and JPMorgan were also trading in the red.
Shares in Office Depot jumped after the group lifted its profit guidance for the 2014 financial year and revealed plans to close more stores.
Other companies will be in focus as they release their quarterly results after the close, including Walt Disney, Groupon and Whole Foods.
Merck was lower after Bayer said it would acquire the former's consumer care division for $14.2bn.
In other markets, West Texas Intermediate futures were up 0.4% at $99.87 a barrel on the NYMEX.
The yield on a 10-year US Treasury was flat at 2.60%. |
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| | Broker Tips | | Broker tips: Barclays, Coca-Cola HBC, IHG... Shares in Barclays fell following Tuesday's news of a fall in first-quarter profits, but brokers are advising investors to buy the shares on hopes that its turnaround plan will bear fruit.
Barclays is cutting costs and slashing jobs in a shake-up to streamline the bank and has pledged to give more details of its plans on Thursday. Analyst Richard Hunter at broker Hargreaves Lansdown said the shares were likely to be volatile before Thursday's announcement, but added: "If some of the rumoured changes are implemented, resulting in a more streamlined and obviously profitable bank, the recent upgrade of the market consensus to a 'buy' will have been vindicated."
There is much to like with bottling firm Coca-Cola HBC (CCH), according to Numis Securities, but not enough for the broker to take a positive stance ahead of the company's first-quarter update on May 16th.
Numis has initiated coverage of the stock with a 'hold' rating and 1,428p target. "Much to like here but it is pointless being bold as regards forecasts at this early stage of the year and with geopolitical uncertainties currently so prominent. For non-holders, a watching brief is best maintained for now," said Analyst Charles Pick.
UBS has raised its forecasts for InterContinental Hotels Group (IHG) but downgraded its rating on the stock from 'buy' to 'neutral', saying it sees limited upside for the shares.
The bank has lifted its price target for the stock from 2,200p to 2,225p. However, UBS said: "While we acknowledge the strong operational momentum we downgrade the shares from 'buy' to 'neutral' due to insufficient share price upside relative to our price target to support a 'buy' rating".
Countrywide's shares look attractive at current levels following the estate agent chain's strong first-quarter results, according to Panmure Gordon, which maintained a 'buy' rating and 700p target on the stock.
"If the first-quarter momentum is sustained or accelerated there is scope for earnings upgrades. The economy is getting stronger and real wages are picking up which is very supportive," the broker said.
Cantor Fitzgerald has slashed its target for AIM-listed Fastnet Oil & Gas after the company plugged and abandoned one of its wells offshore Morocco.
"In terms of valuation, we increase our overall risking of Moroccan frontier acreage, especially following Cairns unsuccessful well in December 2013. On this basis, whilst we anticipate an initial sell-down this morning, we retain our 'buy' recommendation, reducing our target to 19p (from 28p)." | | |
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