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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 open: AstraZeneca leads markets lower as shares sink - AstraZeneca drops sharply after rejecting Pfizer offer
- Banking, mining stocks fall
- China property concerns weigh on sentiment
techMARK 2,714.40 -1.13%
FTSE 100 6,823.23 -0.48%
FTSE 250 15,475.65 +0.50%
UK stocks fell on Monday morning with AstraZeneca leading the decline after rejecting a final takeover offer from pharmaceutical giant Pfizer.
Ongoing concerns about a slowdown in China were also weighing on markets early on, with banking and mining shares bearing the brunt of a reduction in risk appetite.
The FTSE 100 was trading 0.5% lower at 6,823 within the opening hour of trade.
Jonathan Sudaria, a dealer at Capital Spreads, said that bulls were taking "a breather" after European equities posted new multi-year highs last week.
"As evidenced by the lack of volatility, there aren't any clear catalysts for traders to get their teeth into and back up their convictions with big trades. Until something happens to end this state of apathy, expect markets to continue drifting," he said.
Over in China a report from the real estate sector revealed 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.
Comments from Bank of England Governor Mark Carney were also in focus after he expressed concerns about the housing market over the weekend. He said that rising house price pose the biggest risk to the UK recovery and suggested that the government's Help-to-Buy scheme may need to be adjusted.
Meanwhile, investors were looking ahead to Sunday's Presidential elections in Ukraine. Any delay or failure of the above could trigger so-called "stage three" sanctions co-ordinated with the US, according to analysts at Barclays Research. This could push Russia into a severe recession and lead to retaliatory moves.
AstraZeneca plummets after rejecting Pfizer's last-ditch attempt
Shares in AstraZeneca, which have risen strongly over the past month, dropped 14% this 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, as it called on AstraZeneca shareholders to urge the latter's board to begin "substantive engagement". It said it would not pursue a hostile offer and would only announce another offer with the recommendation of AstraZeneca's board.
Mining stocks were mostly lower this morning on China slowdown fears with Rio Tinto, BHP Billiton and Anglo American among the worst performers.
Banking peers Barclays, Standard Chartered, Lloyds and HSBC were also out of favour.
Specialty chemicals group Alent gained strongly after maintaining its outlook for the full year despite adverse currency movements. The company said 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.
easyJet and IAG were flying higher after figures from airline peer Ryanair as it 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) 1,557.00p +2.70%
International Consolidated Airlines Group SA (CDI) (IAG) 367.00p +2.43%
Next (NXT) 6,495.00p +1.48%
Meggitt (MGGT) 468.90p +1.41%
Travis Perkins (TPK) 1,652.00p +1.41%
Mondi (MNDI) 1,007.00p +1.21%
London Stock Exchange Group (LSE) 1,801.00p +1.18%
Compass Group (CPG) 1,002.00p +1.16%
Shire Plc (SHP) 3,304.00p +1.16%
St James's Place (STJ) 748.00p +1.15%
FTSE 100 - Fallers
AstraZeneca (AZN) 4,140.00p -14.17%
Sainsbury (J) (SBRY) 341.00p -1.93%
Rio Tinto (RIO) 3,232.50p -1.64%
Barclays (BARC) 238.15p -1.41%
Vodafone Group (VOD) 214.85p -1.06%
GlaxoSmithKline (GSK) 1,626.50p -1.03%
BHP Billiton (BLT) 1,938.00p -0.77%
Morrison (Wm) Supermarkets (MRW) 211.30p -0.75%
Standard Chartered (STAN) 1,326.00p -0.75%
Aviva (AV.) 509.50p -0.68%
FTSE 250 - Risers
Alent (ALNT) 314.00p +3.87%
Perform Group (PER) 261.60p +2.59%
Afren (AFR) 155.00p +2.58%
Carphone Warehouse Group (CPW) 297.30p +2.52%
Unite Group (UTG) 414.90p +2.22%
Keller Group (KLR) 957.50p +2.08%
Fisher (James) & Sons (FSJ) 1,316.00p +2.02%
Dixons Retail (DXNS) 44.82p +1.96%
Grafton Group Units (GFTU) 552.00p +1.84%
Domino Printing Sciences (DNO) 758.50p +1.81%
FTSE 250 - Fallers
Supergroup (SGP) 1,003.00p -2.05%
Ted Baker (TED) 1,732.00p -1.76%
Ocado Group (OCDO) 298.90p -1.52%
Lonmin (LMI) 244.40p -1.45%
Rank Group (RNK) 155.70p -1.39%
Bank of Georgia Holdings (BGEO) 2,457.00p -1.33%
Infinis Energy (INFI) 204.10p -1.31%
Computacenter (CCC) 619.50p -1.27%
Evraz (EVR) 99.10p -1.00% |
| | UK Event Calendar | | Monday May 19
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Speech Dallas Fed President
Eurozone construction output
Machinery orders (JP) (08:50)
INTERIMS
Innovation Group, ITE Group, Shaftesbury
GMS
One Savings Bank 6.951% Perpetual Subordinated Bonds
FINALS
Cranswick, E2V Technologies, Gable Holdings Inc., Mitie Group, Tangent Communications, Tissue Regenix Group
ANNUAL REPORT
Centralnic Group
IMSS
Charles Taylor, Irish Continental Group Units, Centaur Media
SPECIAL DIVIDEND PAYMENT DATE
GVC Holdings
EGMS
Picton Property Income Ltd
AGMS
Alent, Bioquell, British Smaller Companies VCT 2, One Delta, Orogen Gold, Telfonica Czech Republic A.S. GDR (144A/REG S)
FINAL DIVIDEND PAYMENT DATE
GVC Holdings, IMI, John Laing Infrastructure Fund Ltd, Miton Group, Norsk Hydro ASA, Rathbone Brothers, Rotork, Stilo International, Unite Group
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks little changed on Greek, Ukraine elections - No clear winner in Greek elections
- Ukraine presidential election looms
- Chinese property prices fall
- ECB to ease policy, according to poll
FTSE 100: -0.47%
DAX: -0.17%
CAC 40: -0.08%
FTSE MIB: -1.53%
IBEX 35: 0.09%
Stoxx 600: -0.27%
European stocks were little changed as Greece ended its first round of local and regional elections with no clear winner.
Prime Minister Antonis Samaras's New Democracy party were ahead in nine of Greece's 13 administrative regions, with 94% of the vote counted, while independent candidates led in the country's two largest cities.
New Democracy candidates failed to make it through to a second round of voting on May 25th in Greece's capital, Athens, and its wider metropolitan region of Attica. Nationalist Golden Dawn candidate Ilias Kasidiaris got 16% of the vote in Athens, placing fourth.
Meanwhile, Ukraine is gearing up for its May 25th elections as a United Nations official said the country is edging towards the "point of no return".
Assistant Secretary General for Human Rights Ivan Simonovic told the BBC that the turmoil was showing similarities of the 1990s war in his native Croatia.
He added that he hoped the planned presidential election could take place, but that it would be "extremely difficult".
In China a report from the real estate sector revealed 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.
ECB to ease policy next month
European Central Bank President is expected to ease monetary policy when it meets in June, according to a Bloomberg poll of economists.
90% of the survey forecast the ECB will loosen its belt after saying on May 8th that officials are ready to act if necessary amid weak inflation and a stagnant recovery.
A record 88% of respondents think Draghi's guidance on interest rates, made every month since July, has been effective, compared to 48% in September when the question was first included in the survey.
Deutsche Bank, Ryanair
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.
Ryanair's shares escalated after reporting earnings that beat analysts' estimates.
AstraZeneca dropped after it rejected Pfizer's final increased bid to buy the UK drugmaker.
The euro rose 0.14% to $1.3713.
Brent crude futures increased $0.399 to $110.190 per barrel, according to the ICE. |
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| | US Market Report | | US close: Fed's Bullard sees rate increase at end quarter one 2015 - US housing starts and permits beat forecasts
- US consumer confidence slips
- Fed's Bullard sees first rate increase at end of quarter one 2015
Dow Jones Industrials: 0.27%
Nasdaq Composite: 0.52%
S&P 500: 0.37%
US stocks finished the session slightly higher after a report showed housing starts rose strongly in April, although consumer confidence dropped.
Housing starts increased to an annualised rate of 1.07m in April, a Commerce Department report showed, beating analysts' estimates for 980,000. As well, the federal government revised the figure for March upwards to 947,000.
"Altogether, today's report on US housing starts should help to assuage Federal Open Market Committee concerns that housing activity was flattening out as opposed to gradually recovering after successive adverse shocks from higher mortgage rates last year and adverse weather more recently," said Barclays Research.
"The report has lifted our second quarter GDP tracking estimate by two-tenths to 3.1%, while our first quarter GDP tracking estimate remains unchanged at -0.6%."
US consumer confidence, however, unexpectedly declined in May, according to the preliminary reading of the Thomson Reuters/University of Michigan. The sentiment index dropped to 81.8 this month from 84.1 in April. Economists had predicted a reading of 84.5.
"The fall in consumer confidence in May comes at the end of a week in which we also received weak retail sales and industrial production numbers," Capital Economics said.
"But we think that the underlying trend in economic activity is upwards, meaning that it shouldn't be long before confidence starts to climb again."
Small businesses boost jobs, says Yellen
Federal Reserve Chair Janet Yellen has said small businesses have accounted for more than half the job gains in the economic recovery over the past five years.
In a speech at the Chamber of Commerce last night, she said the Fed has tried to foster job creation by keeping interest rates near record lows but that "overwhelmingly, it is businesses that create jobs".
Speaking in the afternoon the President of the US Federal Reserve bank of St.Louis, James Bullard, said he sees a first rise increase in interest rates taking place at the end of the first quarter of 2015.
The Fed is "a lot closer to its goals than people appreciate", Bullard explained.
Ukraine crisis
US and UK diplomats have warned of further sanctions in Russia if this month's Ukrainian presidential election is undermined.
"If Russia or its proxies disrupt the elections," the US and its allies "will impose sectoral economic sanctions as a result," Secretary of State John Kerry said in London yesterday after meeting his counterparts from Britain, Italy, France and Germany.
Darden Restaurants, Chesapeake Energy
Darden Restaurants slipped after agreeing to sell its Red Lobster chain for $2.1bn.
Chesapeake Energy dropped after saying it will cut half its workforce.
Verizon Communications edged higher as Warren Buffett's Berkshire Hathaway disclosed a stake.
Nordstrom gained as the luxury department-store chain reported quarterly results that exceeded estimates.
From a sector standpoint the best performing industrial groups were: Platinum (3.03%), Distillers (2.85%) and Apparel retailers (2.42%).
Other asset classes slightly higher
US 10-year yields rose three basis points to 2.52%.
West Texas Intermediate crude futures edged higher by 0.127% to $102.15 per barrel, according to the ICE. |
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| | Newspaper Round Up | | Monday newspaper round-up: Mark Carney, Petroleum reserves, AstraZeneca The government's Help to Buy scheme could distort the entire mortgage market and may have to be curbed, the governor of the Bank of England warned yesterday. Mark Carney said that the programme to help new home owners to secure a mortgage with a deposit of as little as five per cent may be encouraging a return to risky home loans. The remarks represent the most explicit sign that the Bank of England may formally request a policy change in September. – The Times
China is stockpiling oil for its strategic petroleum reserve at a record pace, intervening on a scale large enough to send a powerful pulse through the world crude market. The move comes as tensions mount in the South China Sea, and the West prepares possible oil sanctions against Russia over the crisis in Eastern Ukraine. Analysts believe China is quietly building up buffers against a possible spike in oil prices or disruptions in supply. – The Daily Telegraph
Pfizer tabled a "final" £55-a-share offer for AstraZeneca last night, but warned that it would walk away from the mooted £69bn takeover if its British rival refused to engage. The American drugs giant urged AstraZeneca's shareholders to put pressure on the board to engage as it raised the level of its offer and increased the cash element from 33% to 45%. – The Times
Britain's biggest chemist, Alliance Boots, could be wholly owned by America's largest drug-store chain within eight months. The Walgreen Company currently holds a 45% stake and has an option to buy the remaining 55% between February and August next year. But, according to reports, Walgreens is hoping to swoop sooner in a takeover valuing Boots at around £10.5bn. – The Daily Telegraph
GlencoreXstrata will face a fresh grilling over its business deals in the Congo with Israeli businessman Dan Gertler at its annual meeting tomorrow. The Swiss commodities giant is also due to face criticism over its accounting standards, but is reportedly closing in on hiring a female non-executive to end criticism over its position as the last FTSE 100 firm with an all-male board. Campaigners at Global Witness will highlight a series of transactions they claim left Gertler, the 'gatekeeper' to much of Congo's mineral wealth, $67m richer with no clear benefit to Glencore. – Daily Mail
Public support for fracking for shale gas in the UK has fallen below 50% for the first time, new polling suggests. Just 49.7% of people now say they think the controversial process should be allowed in the UK, marking the third fall in support since high-profile protests last summer in West Sussex which saw dozens of arrests including that of Green MP, Caroline Lucas and ongoing protests at a site in Salford. – The Guardian
BT is hiring 1,600 engineers amid criticism from regulators over the speed at which new internet connections are installed and faults are repaired. The telecoms company, whose network is also relied on by dozens of other broadband providers including Sky and TalkTalk, has been rapped by watchdogs for leaving customers stranded without web access for too long. – The Guardian | | |
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