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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: Russia has prepared retaliatory sanctions, Medvedev says - China faces arduous task meeting growth target
- Russia being pulled into a second Cold War
- New blood at the Bank of England may be a good thing, FT writes
techMARK 2,718.30 -0.04%
FTSE 100 6,828.87 -0.23%
FTSE 250 15,474.82 +0.62%
Stocks moved slightly lower after China's Commerce Ministry said the country faces an arduous task in meeting its target for 7.5 per cent growth in gross domestic product this year and Russian Prime Minister Dmitry Medvedev told Bloomberg News that his country is being pulled into a second Cold War with the US and its allies.
The Footsie was 9 points lower at 6,835 as of 09:01.
In an interview with Bloomberg News Medvedev indicated that Russia has prepared a raft of retaliatory steps in response to potentially wider sanctions imposed by the US and the European Union.
That comes as the world continues to watch for signs that Russian forces are indeed pulling back from the country's borders with Ukraine.
A report from Interfax, which cites Russia's Defence Ministry, says that "Russian troops have been ordered to pull back after drills in south-western Russia".
CPI expected to print at 1.7 per cent
Back in the UK, data out today is expected to show that CPI rose by 1.7% year-on-year in April, according to the consensus.
Nonetheless, so-called 'base effects' associated with an early Easter in 2013 and increases in fuel prices and transport costs may see a print of 1.8%, Barclays Research believes, close to the 1.9% level at which it sees CPI ending the year.
Forecasts from the Monetary Policy Committee point to CPI at 1.9% even as far out as at the start of 2017.
The retail price index (RPI) is expected to edge higher, towards a rate of 2.6% year-on-year, bolstered by strong house price growth, although as Governor Carney explained just last Sunday, the Bank may yet adopt further measures to restrain house prices.
Acting as a backdrop, the Financial Times reported on Tuesday on how it will become increasingly harder to anticipate the Monetary Policy Committee's (MPC) decisions come late summer, as three new members – from outside the Bank – come on board.
"The overseas people are going to be able to see the wood from the trees," one economist told the newspaper.
Sales drop 1.4 per cent at Marks&Spencer's general merchandise division
In this morning's company news, Marks and Spencer (M&S) reported a 3.9% fall in annual pre-tax profit to £623m, reflecting a drop in sales at the struggling general merchandise division. General merchandise, the clothing arm which has recently undergone a rapid transformation to turn business around, saw like-for-like sales fall 1.4% in the year ended March 29th. Total UK like-for-like sales rose 0.2% as food sales increased 1.7%.
Legal & General said it has completed the acquisition of Global Index Advisors, giving the UK insurer a bigger foothold in the US pensions market. The acquisition, by Legal & General Investment Management America (LGIMA), is for an initial payment of $30.75m with deferred consideration of $1.5m payable over two years from the date of completion. Further payments of up to a maximum of $18.15m will be made over three years from the date of completion.
Vodafone's earnings fell 7.4% in the year to end-March as the mobile operator confirmed its expected final dividend of 7.47p per share. Chief Executive Vittorio Colao admitted the group's performance had been "mixed", with competitive, regulatory and macroeconomic pressures leading to several write-downs in Europe.
Home emergency repair group HomeServe said costs related to the mis-selling of insurance products ate into full-year profit but it is confident of future progress as it looks to the US for growth opportunities. Statutory pre-tax profit fell to £24.4m for the year ended March 31st 2014 from £66.5m before.
Convenience store food producer Greencore Group reported an 8.2% rise in first half revenue to £619.8m , driven by store openings by major retailers. The company said a rise in employment and a milder winter also boosted revenue in the six months to March 28th, despite a challenging UK grocery market.
Insurer RSA is selling its majority-owned Canadian insurance brokerage business Noraxis Capital Corporation to a subsidiary of Arthur J. Gallagher & Co. for 500m Canadian dollars.
ITV has been upgraded to 'hold' versus 'sell' at broker Berenberg, while AstraZeneca was added to Citi's Focus List Europe overnight |
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| | FTSE 100 - Risers
Carnival (CCL) 2,388.00p +3.74%
BT Group (BT.A) 379.60p +2.29%
International Consolidated Airlines Group SA (CDI) (IAG) 378.30p +2.02%
ITV (ITV) 175.70p +1.68%
Whitbread (WTB) 3,998.00p +1.42%
Sage Group (SGE) 402.40p +1.18%
Royal Bank of Scotland Group (RBS) 327.20p +1.08%
St James's Place (STJ) 753.00p +1.07%
Travis Perkins (TPK) 1,633.00p +1.05%
InterContinental Hotels Group (IHG) 2,206.00p +0.96%
FTSE 100 - Fallers
Vodafone Group (VOD) 209.20p -3.66%
Marks & Spencer Group (MKS) 439.90p -2.46%
AstraZeneca (AZN) 4,200.00p -2.04%
Tesco (TSCO) 306.85p -1.65%
William Hill (WMH) 326.10p -1.60%
Fresnillo (FRES) 836.50p -1.18%
Tullow Oil (TLW) 844.50p -1.00%
Sainsbury (J) (SBRY) 341.70p -0.96%
Intertek Group (ITRK) 2,956.00p -0.94%
Morrison (Wm) Supermarkets (MRW) 212.10p -0.89%
FTSE 250 - Risers
Homeserve (HSV) 336.70p +6.18%
Greencore Group (GNC) 262.10p +6.07%
Paragon Group Of Companies (PAG) 370.00p +5.68%
Foxtons Group (FOXT) 298.50p +4.04%
Fidessa Group (FDSA) 2,254.00p +2.92%
Bank of Georgia Holdings (BGEO) 2,494.00p +2.76%
Regus (RGU) 192.00p +2.56%
Go-Ahead Group (GOG) 1,887.00p +2.55%
Supergroup (SGP) 988.50p +2.54%
African Barrick Gold (ABG) 219.40p +2.48%
FTSE 250 - Fallers
Afren (AFR) 148.80p -3.44%
Entertainment One Limited (ETO) 272.20p -2.44%
Ladbrokes (LAD) 130.90p -2.17%
Intermediate Capital Group (ICP) 420.60p -2.07%
BTG (BTG) 517.00p -1.52%
Kazakhmys (KAZ) 250.20p -1.50%
Cairn Energy (CNE) 185.80p -1.17%
888 Holdings (888) 127.40p -1.09%
Lonmin (LMI) 239.30p -0.99%
Redefine International (RDI) 56.10p -0.88%
FTSE TechMARK - Risers
DRS Data & Research Services (DRS) 20.50p +6.49%
Sarossa (SARS) 1.85p +2.78%
Oxford Biomedica (OXB) 2.05p +2.50%
Vectura Group (VEC) 129.00p +1.57%
Kofax Limited (DI) (KFX) 424.50p +1.13%
Filtronic (FTC) 38.00p +1.00%
Puricore (PURI) 31.50p +0.80%
Ricardo (RCDO) 672.00p +0.60%
Wolfson Microelectronics (WLF) 233.00p +0.11%
FTSE TechMARK - Fallers
Phoenix IT Group (PNX) 108.00p -3.14%
RM (RM.) 125.00p -2.82%
Torotrak (TRK) 23.00p -1.60%
Skyepharma (SKP) 232.25p -1.28%
E2V Technologies (E2V) 155.75p -1.11%
Dialight (DIA) 859.50p -0.29%
Anite (AIE) 89.00p -0.28% |
| | UK Event Calendar | | Tuesday May 20
INTERIMS
Driver Group, Bloomsbury Publishing, BTG, Paragon Group Of Companies, Renew Holdings, Victrex plc, Topps Tiles
INTERIM DIVIDEND PAYMENT DATE
Barratt Developments
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Producer Price Index (GER) (07:00)
Speech President Philadelphia Fed
Speech President New York Fed
Industrial orders (IT) (09:00)
Consumer confidence (BE) (14:00)
Index all-industry activity (JP) (14:30)
Q4
Big Yellow Group
GMS
Straight
FINALS
Afren, Babcock International Group, Big Yellow Group, BTG, Entertainment One Limited, First Derivatives, Homeserve, Intermediate Capital Group, Marks & Spencer Group, Vodafone Group
IMSS
Greencore, Spirax-Sarco Engineering
SPECIAL DIVIDEND PAYMENT DATE
Direct Line Insurance Group
AGMS
Advanced Medical Solutions Group, APR Energy, Caledonia Mining Corporation, Caledonia Mining Corporation, China Chaintek United Co. Limited, EKF Diagnostics Holdings , Glencore Xstrata, Instem, Kakuzi Ltd., London Capital Group Holdings, NetScientific , Publishing Technology, Regus, Royal Dutch Shell 'A', Royal Dutch Shell 'B', S&U, Sagentia Group, Somero Enterprises Inc.(Reg S), Spirax-Sarco Engineering, TMT Investments, UBM, Vmoto Ltd, Zotefoams
UK ECONOMIC ANNOUNCEMENTS
Consumer Price Index (09:30)
Producer Price Index (09:30)
Retail Price Index (09:30)
FINAL DIVIDEND PAYMENT DATE
Brady, Communisis, Direct Line Insurance Group, Holders Technology, Intu Properties, Wood Group (John)
Q1
AFI Development, OJSC Novolipetsk Steel GDS (Reg S)
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks little changed as German producer prices fall - German producer prices fall
- UK inflation expected to rise
- Russia hits back at sanctions
FTSE 100: -0.06%
DAX: 0.19%
CAC 40: 0.01%
FTSE MIB: 0.53%
IBEX 35: 0.38%
Stoxx 600: 0.23%
European stocks were little changed as German producer prices fell more than expected and as investors awaited the release of UK inflation figures.
German producer prices were down 0.9% year-on-year in April following a 0.9% drop a month earlier, missing forecasts for a 0.8% decline.
In the UK, the consumer price index (CPI) may have risen 1.7% year-on-year in April following a 1.6% increase the month before, according to the consensus estimate.
Forecasts from the Monetary Policy Committee point to CPI at 1.9% at the start of 2017, edging closer towards the Bank of England's target of just under 2%.
Russia prepares to retaliate on sanctions
Russian Prime Minister Dmitry Medvedev said he has prepared a raft of retaliatory steps in response to potentially wider sanctions imposed by the US and the European Union.
Medvedev told Bloomberg Russia is being pulled into a new Cold War with the US and its allies over the turmoil in Ukraine.
"We haven't especially commented on" sanctions "or responded to them harshly, although we could do something unpleasant or offensive to those countries that are introducing these sanctions," he said.
Vodafone, M&S slide on finals
Vodafone slumped after saying it forecasts earnings before interest, tax, depreciation and amortisation (EBITDA) to fall in the year ended March 2015.
Marks and Spencer retreated after reporting a 3.9% fall in annual pre-tax profit to £623m, reflecting a drop in sales at the struggling general merchandise division.
United Internet, a German online-access and domain provider, gained after first-quarter sales rose to beat analysts' estimates.
Sonova advanced as the maker of hearing aids proposed a dividend of 1.90 francs which exceeded expectations.
The euro fell 0.08% to $1.3698.
Brent crude futures rose $0.128 to $109.510 per barrel, according to the ICE. |
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| | US Market Report | | US close: Stocks gain, comments from Fed officials in focus - Fed: Fisher sees rate rise soon
- Fed: Williams sees adverse impact from super-easy policy
- Pfizer offer rejected by AstraZeneca
- AT&T to buy DirecTV
Dow Jones: 0.13%
Nasdaq: 0.87%
S&P 500: 0.38%
US stocks closed moderately higher on Monday, shrugging off a subdued start, as investors focused on comments from two policymakers.
The Dow Jones Industrial Average finished 0.1% higher, the S&P 500 rose 0.4% while tech-heavy Nasdaq jumped 0.9%, helped by decent gains in the internet sector.
"Without much macro data to guide them traders have been understandably cautious, but […] indices are showing increased resilience, boosting the probability that we will retest last week's highs," said Chris Beauchamp, Market Analyst at IG.
Comments from Richard Fisher, President of the Federal Reserve Bank of Dallas and voting member of the Federal Open Market Committee, were making headlines today after he said he sees a rise in interest rates "in the next year or so". He said: "We are basically moving toward normalisation."
Meanwhile, San Francisco Fed President John Williams warned that the Fed's ultra-loose monetary policy could have adverse consequences over time. He said that if interest rates remain low for too long, it would push asset prices too high or prompt investors to become too risky.
The comments come ahead of the release of the minutes of the latest Fed meeting on Wednesday. Fed Chair Janet Yellen said last week the US economy has further to go in its recovery and said small businesses would be key in nursing the country back to health.
Markets had opened in the red, tracking European markets lower, after a report on the Chinese 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.
In other world news, Russia's President Vladimir Putin has ordered the withdrawal of troops near the Ukraine border, the Kremlin said. Units in the Rostov, Belgorod and Bryansk regions should return to their permanent bases, according to a statement.
Pfizer, AT&T in M&A spotlight
Shares in Pfizer edged higher after AstraZeneca rejected a sweetened offer from the US pharmaceutical group, which valued it at £69bn. Pfizer said this was a "final proposal" and would not be increasing it any further. It said it would not pursue a hostile offer and would only announce another offer with the recommendation of AstraZeneca's board.
AT&T finished slightly lower after unveiling plans to buy pay-TV group DirecTV for $48.5bn. The cash-and-stock bid, equal to $95 a share, is a 10% premium to DirecTV's closing price last Friday. Including debt, the deal values it at $67.1bn.
Internet stocks gave markets a lift during Monday's session with Pandora Media, TripAdvisor and Netflix all rising strongly. |
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| | Newspaper Round Up | | Tuesday newspaper round-up: Households, Prices, AstraZeneca British households are willing to splash out a little bit extra on luxuries as confidence in people's finances and the state of the economy continues to rise. Consumer confidence is at its highest level since Lloyds started charting it in its Spending Power Report in November 2010. Confidence in April hit 138 points, a rise of 29 points from this time last year. Confidence rose thanks to reduced pressure on household budgets as the cost of several essential items fell. – Daily Mail
Prices are rising faster than wages again, official figures could show on Tuesday, days after Mark Carney, the Bank of England governor, said that the cost of living crisis was over. Inflation on the CPI measure was 1.8% in April, the Office for National Statistics is expected to report, according to forecasts from City economists. That figure, an increase on the March reading, would temper hopes that a long period of wages falling in real terms is over. – The Daily Telegraph
Pfizer is refusing to throw in the towel over a takeover bid for AstraZeneca, and is now counting on shareholder pressure to force the board of the Anglo-Swedish company to the negotiating table. Sources close to the American drug giant said it would leave its £69bn offer - or £55 per share - for AstraZeneca, which technically runs out of time next Monday, in place to test investor reaction. "Pfizer put the £55 out there to see if they could get engagement or any progression because AstraZeneca have been focused on independence," said one source. – The Daily Telegraph
The 'big 10' global food and drink companies together emit more greenhouse gases than Scandinavia and would rank as the 25th most polluting country in the world if grouped together, the international charity and agency Oxfam claims in a new report on Tuesday. In a highly critical overview of their climate change policies, it warns the companies – which represent the world's most famous household brands – that they are risking financial ruin if they do not do more to use their clout and size to tackle the climate crisis. – The Guardian
About £40bn of tax is being illegally evaded every year by companies in Britain, four times the official estimate, according to new research. The study into Britain's shadow economy, published by Tax Research UK, Tax Justice Network and the Association for Accountancy and Business Affairs (AABA), found that £100bn of sales by companies were not reported in 2012. The paper claimed that £40bn of VAT, income tax, national insurance and corporation tax went unpaid. – The Times
Standard Chartered has stepped outside the banking sector for its new finance director, luring Andy Halford, Vodafone's former beancounter in chief, with a £2.8m "golden hello". Mr Halford will join Standard Chartered in June 16th after leaving the British telecoms giant in March. Mr Halford, who is also a non-executive director at Marks & Spencer, is being handed up to £2.8m in shares to replace the bonus scheme he had been awarded at Vodafone but was required to forfeit upon taking a new job.- The Times | | |
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