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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: UK stocks rise after European elections, IHG jumps - Eurosceptism tempered by strong election results in Italy, Greece
- FTSE 100 tracks gains made in Europe on Monday
- IHG rises strongly on takeover rumours
- Lloyds to float TSB
- Pfizer walks away from AstraZeneca
techMARK 2,779.89 +0.79%
FTSE 100 6,830.41 +0.22%
FTSE 250 15,824.59 +0.75%
UK stocks rose on Tuesday morning following a three-day weekend, as traders looked to play 'catch up' after a strong performance by European markets the previous session.
InterContinental Hotels Group (IHG) was leading the risers early on in London on the back of weekend press reports of a takeover bid, while Lloyds pleased with the announcement of its intention to float TSB.
While UK markets were closed on Monday for a Bank Holiday, indices across the continent posted strong gains in the wake of the European Parliament elections at the weekend. The FTSE 100 rose 0.22% to 6,830.41 in early trading.
Though the standings of anti-EU parties increased in some countries - such as UKIP in the UK and the Front National party in France - stocks were given a boost as the overall rise of 'euroscepticism' was outweighed by strong results from pro-euro parties in Italy and Greece. Italy's FTSE MIB in particular surged nearly 4% yesterday after incumbent President Matteo Renzi's Democratic Party managed to secure a sound victory this weekend.
"The election results are a positive, especially for Italy and Greece, where euroscepticism would have been a powerful threat to pending reforms and to the return of international investors," according to analysts at RBS.
Meanwhile, Chief Market Analyst Michael Hewson from CMC Markets said that developments in Ukraine also helped to lift sentiment on European markets yesterday despite Ukrainian forces launching air strikes on pro-Russian militants along the eastern border.
"The weekend vote in the Ukraine appears to have been one major catalyst for yesterday's strong European session, with the new Ukrainian President Petro Poroshenko making conciliatory noises towards Russia, as well as the European Union in an attempt to bring together the various factions in an attempt to de-escalate recent tensions," he explained.
IHG jumps on bid interest
IHG shares surged this morning after Sky News reported that the the company rejected a £6bn takeover bid on the grounds that it was too low. While the identity of the bidder has not been confirmed, analysts have suggested that the proposal could have come from Starwood Hotels & Resorts Worldwide.
Lloyds also rose after confirming it will float a quarter of shares in TSB on the London Stock Exchange in June. Chief Executive António Horta-Osório said the initial public offering of TSB "is an important further step for the group as we act to meet our commitments to the European Commission".
Heading the other way was AstraZeneca after US pharmaceutical giant Pfizer called an end to its takeover pursuit following continued rejections from the board of the Anglo-Swedish rival. Societe Generale was weighing further on AstraZeneca's share price this weekend after cutting its rating on the stock from 'hold' to 'sell'.
Oil and gas firm BG Group was also lower after being hit with a downgrade by Kepler to 'reduce'.
Ophir Energy sank after saying it failed to encounter significant hydrocarbon shows after drilling the Affanga Deep-1 well in the Gnodo block offshore Gabon. Similarly Tullow Oil was in focus after revealing that drilling of one of its majority-owned wells offshore Norway failed to meet targets.
Software maker Aveva rose strongly as it revealed an 11% increase in full-year profit underpinned by strong demand at its Engineering and Design Systems unit and improved margins. |
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| FTSE 100 - Risers
InterContinental Hotels Group (IHG) 2,348.00p +5.48%
Weir Group (WEIR) 2,584.00p +2.30%
TUI Travel (TT.) 413.30p +2.00%
ARM Holdings (ARM) 899.50p +1.98%
William Hill (WMH) 342.00p +1.94%
Travis Perkins (TPK) 1,701.00p +1.86%
International Consolidated Airlines Group SA (CDI) (IAG) 386.40p +1.84%
St James's Place (STJ) 783.50p +1.75%
ITV (ITV) 181.60p +1.74%
Sports Direct International (SPD) 787.00p +1.68%
FTSE 100 - Fallers
AstraZeneca (AZN) 4,216.00p -2.59%
Fresnillo (FRES) 836.00p -1.53%
Smiths Group (SMIN) 1,303.00p -1.44%
Morrison (Wm) Supermarkets (MRW) 200.50p -1.09%
Sainsbury (J) (SBRY) 340.20p -1.02%
SABMiller (SAB) 3,303.50p -0.72%
Tesco (TSCO) 302.55p -0.53%
Hammerson (HMSO) 587.50p -0.51%
BHP Billiton (BLT) 1,938.00p -0.49%
Rio Tinto (RIO) 3,242.00p -0.48%
FTSE 250 - Risers
Aveva Group (AVV) 2,414.00p +11.71%
Betfair Group (BET) 1,030.00p +4.04%
Supergroup (SGP) 1,061.00p +4.02%
Halfords Group (HFD) 496.00p +3.33%
Informa (INF) 515.50p +3.31%
Henderson Group (HGG) 241.70p +2.72%
FirstGroup (FGP) 140.20p +2.71%
Electrocomponents (ECM) 286.40p +2.69%
BTG (BTG) 597.50p +2.66%
Ferrexpo (FXPO) 141.10p +2.62%
FTSE 250 - Fallers
Ophir Energy (OPHR) 245.70p -5.54%
Partnership Assurance Group (PA.) 124.30p -1.03%
Croda International (CRDA) 2,553.00p -0.93%
Booker Group (BOK) 135.90p -0.88%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 532.00p -0.84%
Genus (GNS) 1,055.00p -0.75%
Hunting (HTG) 805.00p -0.74%
Wood Group (John) (WG.) 763.50p -0.65%
Dignity (DTY) 1,352.00p -0.59% |
| | UK Event Calendar | | Tuesday May 27
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Confidence (US) (15:00)
Durable Goods Orders (US) (13:30)
House Price Index (US) (14:00)
GMS
Starcom
FINALS
Aveva Group, Renold
ANNUAL REPORT
Nature Group
IMS
Barr(AG)
AGMS
Accesso Technology Group, Barr (A.G.), Bullabulling Gold Limited (DI), Coalfield Resources, Concurrent Technologies, Highland Gold Mining Ltd., ICG-Longbow Senior Secured UK Property Debt Investments Ltd, Mallett, Starcom, Tower Resources
FINAL DIVIDEND PAYMENT DATE
Aggreko, Hunting, Informa, Jupiter Fund Management , Microgen, Total Produce, UBM
Q1
Espirito Santo Financial Group SA
UK ECONOMIC ANNOUNCEMENTS
BBA Mortgage Approvals
Speech Governor Mark Carney (20:00)
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks little changed ahead of US data - US durable goods report due
- US consumer confidence data out
- European Parliament election votes in
FTSE 100: 0.27%
DAX: 0.00%
CAC 40: -0.24%
FTSE MIB: -0.07%
IBEX 35: 0.05%
Stoxx 600: 0.08%
European stocks were little changed ahead of the release of US data on durable goods and consumer confidence.
A report at 12:30 GMT may show durable goods orders fell 0.7% in April following a 2.5% increase a month earlier, according to the consensus forecast by economists.
Another set of figures is expected to reveal consumer confidence was higher in May. The sentiment index is projected to climb to 83 this month from 82.3 in April.
Markit Economics will also release its preliminary index for services which is forecast to drop to 54.5 in May from 55 the previous month.
Italian banks rally on Renzi win
Italian banks rallied after Prime Minister Matteo Renzi's centre left Democratic party won 40.8% of the vote at the European Parliament elections at the weekend.
European leaders will meet today to discuss the next move after protest parties across the 28-nation bloc pushed for an easing of fiscal policy in the Eurozone.
Lloyds, AstraZeneca
Lloyds Banking Group advanced after saying it will sell a 25% stake in its TSB consumer bank in an initial public offering next month.
AstraZeneca declined as US drugmaker Pfizer ended its six-month effort to buy the UK company after offering £69.4bn.
Accor jumped after agreeing to buy hotels in Germany and the Netherlands for about €900m.
Tullow Oil slumped as the exploration company said it will abandon a prospect well in Norway.
The euro rose 0.03% to $1.3650.
Brent crude futures fell $0.091 to $110.220 per barrel, according to the ICE. |
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| | US Market Report | | US close: Stocks end higher ahead of long weekend - Strong existing home sales figures
- Aeropostale shares tumbles 19%
- GE extends deadline for Alstom offer
Dow Jones Industrials: 0.38%
Nasdaq Composite: 0.76%
S&P 500: 0.45%
Stocks ended the day higher 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 6%. 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 higher by one basis points to 2.53%.
Front month West Texas crude futures edged higher by 0.14% to $104.49/barrel on the NYMEX. |
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| | Newspaper Round Up | | Tuesday newspaper round-up: Households, Prices, AstraZeneca TSB will today attempt to sweeten the pill of a three-year dividend blackout by offering free loyalty shares to retail investors. Lloyds Banking Group will promise one free TSB share for every 20 bought and held for a year by retail investors as it formally sets out the intention to float announcement. TSB, a 631-branch bank carved out from Lloyds last year, is planning to conserve cash to finance an aggressive campaign to grab market share from its rivals on the high street. – The Times
Ukraine, its Western allies and Russia signalled that they were taking a step back from the worst East-West stand-off since the end of the Cold War, even as fighting flared Monday between Ukrainian troops and pro-Russian separatists. The change came after a pro-Europe chocolate baron was declared the victor of Ukraine's fraught presidential election, and Russia continued increasingly conciliatory overtures toward its neighbour, which has accused it of inciting insurrection and grabbing its territory. – The Wall Street Journal Europe
Mario Draghi has reinforced expectations that the European Central Bank will cut interest rates or launch a bond-buying programme next month after admitting that "pre-emptive action" may be needed to head off deflation. The ECB is on guard against deflation and ready to act with conventional and targeted measures, while a broad asset-buying plan remains an option, the bank's governor said in a speech on Sunday. To guard against a drop in price expectations, "more pre-emptive action may be warranted", he said.- The Guardian
Confidence about the prospects for service sector businesses is rising at the fastest rate for 26 years, according to the CBI. Optimism among service based companies - from hotels and bars, to travel agents, accountants and the legal profession - showed a marked rise in the three months to May, and encouraged firms to increase recruitment and increase spending on staff training. - The Daily Telegraph
The outskirts of Donetsk were wreathed in thick smoke and resounded to loud explosions and machine gun fire yesterday as the government sent in warplanes and paratroopers to dislodge heavily armed Russian separatists from the biggest airport in east Ukraine. At least one civilian died in the fighting, which began shortly after Petro Poroshenko, who won a landslide victory in Ukraine's presidential elections, said that the insurgency could be crushed in a "matter of hours". – The Times
Nigel Farage has piled more pressure on Ed Miliband to change tack on Europe and immigration by promising to step up his assault on Labour's heartlands. A triumphant Mr Farage celebrated his victory in the European elections by announcing that he would launch his party's manifesto in Doncaster, Mr Miliband's constituency, where Ukip topped the poll. – The Times | | |
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