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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: Chinese data ensures positive finish, despite ISM miss - FTSE closes up 19.59 points at 6,864.10
- Chinese manufacturing sector improves
- US ISM manufacturing gauge misses forecasts
- German CPI surprise on the downside
techMARK 2,822.41 +0.36%
FTSE 100 6,864.10 +0.29%
FTSE 250 16,084.40 +0.46%
Lifted by positive manufacturing data from China, the FTSE 100 was able to end today's session higher, although gains were limited by misses on data elsewhere around the globe.
The top tier index closed 19.59 points higher at 6,864.10.
Mining stocks were buoyed by another jump in Chinese manufacturing activity, but investors were surprised by worse than expected German consumer price estimates, US ISM data and UK manufacturing.
David Madden, Market Analyst at IG, said: "Although still in positive territory for the afternoon, the FTSE 100 has been pushed further away from its seemingly-unreachable 6,900 target after ISM data from the US came in worse than expected [...]
"However, the FTSE 100 has clung on today thanks to the strenuous efforts of the mining sector, which continues to be buoyed by China optimism. Tomorrow's China PMI revision is not expected to contain any shocks, but this is evidently still a market that is worried about growth in that economy."
Chinese manufacturing growth improves
China's 'official' manufacturing sector purchasing managers' index (PMI) rose to 50.8 in May, up from 50.4 the month before, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. Growth came in at a five-month high and was slightly better than the 50.7 consensus forecast.
Nevertheless, enthusiasm was tempered slightly by the news that Chinese house prices fell for the first time in nearly two years in May.
In the UK, Markit's manufacturing PMI eased from 57.3 to 57 last month. However, this was expected by analysts and marked the 15th straight month of growth for the sector.
Meanwhile, the final reading of May's Eurozone manufacturing PMI was revised down from 52.5 to 52.2. This compared to April's reading of 53.4 and surprised economists who had expected the initial estimate to remain unchanged.
US ISM manufacturing gauge misses forecasts in May
The Institute for Supply Management's (ISM) US manufacturing sector gauge for May rose to a reading of 60, from 54.9 in the month before. The consensus estimate had been for a print of 55.5.
IG's Madden continued: "US indices turned red for the first time in five sessions, pushed back by the ISM reading. Most economists had been expecting a small increase that would tie in with the idea that the current quarter is a big improvement on the first quarter.
"That idea has taken a knock today, although not seriously. However, the market does now appear to have entered a consolidation phase, with traders taking their cue from the ISM number to book gains and await developments from the European Central Bank and non-farms. Bond markets also remain quiet, as a 'wait and see' approach predominates."
For their part, analysts at Barclays Research said: "We continue to expect that manufacturing activity growth will continue at a solid pace throughout the year."
German CPI surprise on the downside
The German consumer price index (CPI) is expected to decline by 0.1% month-on-month in May, according to a preliminary estimate from Germany's Federal Statistics Office.
The consensus estimate had been for an increase of 0.2% over the month (1.1% on the year).
Chinese PMI data drives miners higher
The data out on Chinese manufacturing PMI drove mining stocks higher with Anglo American, Rio Tinto and Glencore all having made strong gains this afternoon.
Shares in the latter two were also buoyed by the announcement Rio has completed the $1.02bn sale of its majority interest in the Clermont Mine in Australia, leaving buyer Glencore in charge. The disposal of the 50.1% stake, announced last October, "delivers good value for Rio Tinto's shareholders", the company said in a statement this morning.
Housebuilder Barratt Developments rose after analysts at Goldman Sachs upgraded the company from 'neutral' to 'buy' after the stock's recent weakness.
Meanwhile, nervousness ahead of Tesco's first-quarter results prompted some profit taking in supermarket shares on Monday, which were among the worst performers in afternoon trade.
The negative trend of UK like-for-like (LFL) sales at Tesco is likely to have worsened in its first quarter, analysts at Oriel Securities said.
Insurance stocks such as Standard Life were also out of favour after reports suggested that the pension industry in the UK could undergo yet more reforms after the annuities shake-up in March. Investors were reacting to speculation about a potential Dutch-style collective pension scheme, which would reduce risks for pensioners but could be less lucrative for providers. |
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FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 1,418.00p +3.35%
Royal Mail (RMG) 526.00p +2.73%
Anglo American (AAL) 1,491.50p +2.33%
Ashtead Group (AHT) 900.00p +2.21%
Rolls-Royce Holdings (RR.) 1,063.00p +2.21%
Hargreaves Lansdown (HL.) 1,245.00p +2.13%
Rio Tinto (RIO) 3,120.00p +2.06%
AstraZeneca (AZN) 4,370.50p +2.03%
Shire Plc (SHP) 3,482.00p +1.99%
International Consolidated Airlines Group SA (CDI) (IAG) 401.30p +1.96%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 339.10p -2.02%
Smith & Nephew (SN.) 1,027.00p -1.82%
Standard Life (SL.) 393.30p -1.68%
Morrison (Wm) Supermarkets (MRW) 198.60p -1.54%
Kingfisher (KGF) 386.50p -1.40%
SABMiller (SAB) 3,275.50p -1.07%
Tesco (TSCO) 300.55p -0.99%
Imperial Tobacco Group (IMT) 2,669.00p -0.85%
Diageo (DGE) 1,907.00p -0.63%
Weir Group (WEIR) 2,604.00p -0.61%
FTSE 250 - Risers
PayPoint (PAY) 1,115.00p +5.69%
Ophir Energy (OPHR) 268.30p +4.40%
JD Sports Fashion (JD.) 1,672.00p +3.66%
Entertainment One Limited (ETO) 307.70p +3.57%
Moneysupermarket.com Group (MONY) 182.60p +3.16%
NMC Health (NMC) 500.00p +3.09%
Go-Ahead Group (GOG) 2,268.00p +3.09%
Petra Diamonds Ltd.(DI) (PDL) 160.30p +2.95%
Oxford Instruments (OXIG) 1,347.00p +2.90%
Perform Group (PER) 285.00p +2.89%
FTSE 250 - Fallers
Xaar (XAR) 830.00p -3.94%
Ocado Group (OCDO) 375.80p -2.82%
Playtech (PTEC) 664.00p -2.78%
Pace (PIC) 364.90p -2.75%
Just Retirement Group (JRG) 148.80p -2.55%
Close Brothers Group (CBG) 1,296.00p -2.34%
Genus (GNS) 1,045.00p -2.34%
Evraz (EVR) 102.40p -2.29%
Senior (SNR) 289.90p -2.13%
Redefine International (RDI) 57.95p -2.11% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed after mixed factory reports - China manufacturing expands
- Eurozone factory PMI revised down
- US manufacturing slows
- German inflation falls
- Spain's King abdicates
FTSE 100: 0.29%
DAX: 0.07%
CAC 40: -0.08%
FTSE MIB: 0.77%
IBEX 35: 0.27%
Stoxx 600: 0.24%
European stocks were little changed following the release of mixed manufacturing data in China, the Eurozone and the US.
China's manufacturing purchasing managers' index (PMI) rose to 50.8 in May from 50.4 in April, according to official figures from the National Bureau of Statistics and China Federation of Logistics and Purchasing yesterday, the strongest figure since December. Economists had pencilled in a reading of 50.7. A reading above 50 signals expansion.
In the Eurozone, Markit's manufacturing PMI was revised down to 52.2 in May from the flash estimate of 52.5, surprising analysts who expected the reading to remain unchanged. It compared to April's 53.4.
The Institute for Supply Management's (ISM) said its manufacturing index for the US fell to 53.2 last month from 54.9 in April, missing analysts' expectations of 55.5.
A separate release from Markit showed US manufacturing PMI climbed to 56.4 in May from 56.2 in April. Analysts had forecast the reading to remain unchanged.
German inflation
German inflation fell to 0.9% year-on-year in May from 1.3% the previous month, compared to the consensus forecast of 1.1%.
The report comes a day ahead of Eurozone inflation data amid speculation over the European Central Bank (ECB) easing monetary policy at its Thursday meeting.
Many economists predict new policy measures will be introduced this week by the ECB to address weak inflation and a stagnant recovery.
European Central Bank (ECB) policymakers Yves Mersch, Daniele Nouy and Luis Linde were due to speak today ahead of the meeting.
Berenberg Senior Economist Christian Schulz said it predicts the ECB will ease its stance and "keep the door wide open for further steps".
Elsewhere in the euro-area making waves was news that Spain's constitutional monarch King Juan Carlos I will abdicate in favour of Crown Prince Philip, capping a nearly 40-year reign.
Orion Oyj
Orion Oyj gained after the Finnish drugmaker upgraded its profit forecast for 2014 because of an agreement with Bayer AG to jointly develop and sell a treatment for prostate cancer.
A gauge of miners rallied, including Anglo American and Rio Tinto, following the upbeat Chinese PMI report.
Det Norske Oljeselskap edged higher after agreeing to buy Marathon Oil Corp.'s Norwegian business for $2.7bn.
STMicroelectronics slumped after Citigroup recommended selling shares in Europe's largest semiconductor maker.
Air France-KLM Group edged higher after a report that the airline will start a €1bn cost-cutting programme in 2015.
Lagardere SCA retreated as Societe Generale SA lowered the publisher of the Asterix series of books to 'hold' from 'buy'.
The euro fell 0.22% to $1.3605.
Brent crude futures dropped $0.330 to $109.050 per barrel, according to the ICE. |
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| | US Market Report | | US close: Dow, S&P at record highs despite weak data - Markets post meagre gains but finish at record highs
- Consumer spending and confidence data miss forecasts
- Google and GM in focus
Dow Jones: 0.11%
Nasdaq: -0.13%
S&P 500: 0.18%
US stocks finished broadly higher on Friday as traders shrugged off weak consumer spending and confidence figures to push indices to record highs.
"The 'Sell in May' fans will have been disappointed with the month so far, and with the European Central Bank and non-farms next week most traders will head into the weekend confident that renewed volatility lies ahead," said Brenda Kelly, Chief Market Strategist at IG.
The Dow Jones Industrial Average ended a rather subdued session just 0.1% higher, but finished at 16,717.17, ahead of the previous record set earlier in the month.
The S&P 500, meanwhile, extended gains to close up 0.2% at a new all-time high of 1,923.57.
The Nasdaq, however, fell 0.1% to 4,242.62.
In economic data today, the Commerce Department revealed that consumer spending fell by a seasonally-adjusted 0.1% in April, below the 0.2% growth expected by analysts. This followed a upwardly-revised 1% gain the month before, the largest increase since 2009.
Personal incomes increased by 0.3% last month as expected, following a 0.5% increase in March. April's increase was the smallest in 2014 so far.
Meanwhile, the final reading of the University of Michigan consumer confidence index for May disappointed. The figure was revised up from 81.8 to 81.9, but came in short of the 82.5 expected and well below the 84.1 recorded in April.
On a more positive note, regional manufacturing figures from Milwaukee and Chicago came in ahead of forecasts.
The data comes as Federal Reserve President Kansas 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.
Google, GM in focus
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 finished flat despite the automaker continuing to dominate headlines on the back of lawsuits associated with vehicle recalls.
Lions Gate Entertainment dropped sharply after the film production company disappointed analysts with weaker-than-expected quarterly results. Profits fell 70% on revenues that were 8% lower.
Retail chain Express was also a heavy faller after lowering its guidance for full-year earnings.
Mining stocks were mostly lower on Friday amid falling metal prices and concerns over a slowdown in China. US Steel and Freeport-McMoRan Copper & Gold finished in the red. |
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| | Broker Tips | | Anglo Pacific: FinnCap places both its target prev.: 216p and its hold recommendation under review.
Associated British Foods: Berenberg increases target from 2600p to 3060p, while maintaining its hold recommendation.
Barr: Numis moves target from 612p to 624p retaining a hold recommendation.
Bellway: Numis upgrades to buy with a target of 1810p.
Breedon: Numis upgrades from add to buy with a target of 58p.
Brooks Macdonald: Canaccord Genuity upgrades to buy with a target of 1865p.
Dairy Crest: Credit Suisse lowers target from 465p to 450p and leaves its underperform rating unchanged.
Fenner: N+1 Singer cuts target from 395p to 337p and stays with its hold recommendation.
GKN: Goldman Sachs raises target from 330p to 404p, but still recommends selling.
Halma: Investec cuts target from 715p to 700p retaining its buy recommendation.
Hammerson: Liberum Capital moves target from 619p to 628p, while downgrading from buy to hold.
Man Group: Panmure Gordon ups target from 100p to 125p and retains a buy recommendation.
PayPoint: Numis increases target from 745p to 800p, while staying with its sell recommendation.
Rathbone Brothers: Canaccord Genuity downgrades to hold with a target of 2160p.
Renold: N+1 Singer moves target from 72p to 80p and keeps a buy recommendation.
Royal Dutch Shell: UBS ups target from 2250p to 2300p reiterating a neutral rating.
RWS Holdings: Numis reduces target from 1120p to 975p and keeps its add rating.
Unilever: Berenberg raises target from 2700p to 2800p and retains a hold recommendation. | | |
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