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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: SABMiller and US gains lift FTSE - FTSE closes down 1.45 points at 6,873.55
- Lift provided by US markets
- SABMiller rises on takeover rumours
techMARK 2,859.23 +0.07%
FTSE 100 6,873.55 -0.02%
FTSE 250 16,210.64 -0.05%
Stocks were ultimately little changed from their opening level, although came off the lows seen mid-morning and rose further after markets opened Stateside.
The FTSE 100 closed down just 1.45 points at 6,873.55.
Chris Beauchamp, Market Analyst at IG, said: "As the US opened, we saw the FTSE 100 slowly begin to recover some of its losses, as yet again US indices drew the London market higher, if only slightly. Traders hoping to see the FTSE finally break out of its range will therefore be hoping that it is improving global data, rather than any signs of improvement in the UK, that will drag the market upwards."
There was a reasonable amount of macro news out in the UK today, including predictions from the Office for National Statistics that gross domestic product will likely be revised up by 4.6% in September following the inclusion of such changes as research and development costs and black market activities.
Industrial production expanded at a 0.4% month-on-month and 3% year-on-year pace in April. The consensus estimate had been for an increase of 0.4% and 2.8%, respectively.
Manufacturing output expanded by 0.4% during the month and 4.4% during the year, ahead of the 4.1% which the consensus had been expecting.
UK food sales fall for the first time since 2008
On a like-for-like basis UK retail sales grew 0.5% year-on-year in May, according to the British Retail Consortium (BRC), with signs of a recovery in consumer spending apparent.
However, whereas non-food sales expanded at a 4.3% pace over the last three months when compared to 2013, ahead of the 3.8% 12-month trend rate, food sales slipped by 0.2%.
Excluding distortions related to Easter, that was the first fall recorded in that category since the business lobby began carrying out its survey in 2008.
Looking abroad, US job openings were once again higher in April, with 4,455k registered for the month compared to 4,166k in March.
According to Barclays Research, "the largest jump came from the trade, transportation, and utilities sector, which saw job openings rise by 93,000 on the month, although the strength was fairly broad-based.
"Total hires and separations were both virtually unchanged on the month at 4,708k and 4,496k, respectively, consistent with hire and separation rates of 3.4% and 3.3%. The ratio of unemployed job seekers to job openings plummeted to 2.19 in April, well below the print of 2.51 in March and the lowest level since June 2008."
SABMiller rises on takeover speculation
SABMiller surged to the top of the leaderboard this afternoon after the Financial Times reported "rumours" regarding a potential takeover.
Weir Group was also a strong riser after Societe Generale upped its rating from 'sell' to 'hold'.
Technology tool maker Oxford Instruments was higher after hailing an improved set of full-year results, with orders, sales and profits all ahead of the prior year.
Meanwhile, BT declined, having yesterday gained on the back of an upbeat note from Nomura.
Next's share price dropped into the red after the British retailer announced the resignation of its long-running Executive Director and Group Product Director, Christos Angelides.
Anglo American was another notable faller, hit by news out late yesterday that talks between it, Lonmin, Impala and the platinum striker had "unfortunately been dissolved without an outcome".
Sports Direct fell after Goldman Sachs downgraded the stock from 'strong buy' to 'buy' with a target of 1,100p.
Also in the red was Ted Baker after Oriel Securities downgraded the shares from 'buy' to 'add', despite it reporting a strong start to the year. |
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FTSE 100 - Risers
SABMiller (SAB) 3,460.00p +5.57%
Smith & Nephew (SN.) 1,100.00p +2.33%
Weir Group (WEIR) 2,677.00p +1.63%
Royal Mail (RMG) 506.50p +1.10%
Unilever (ULVR) 2,685.00p +1.09%
Meggitt (MGGT) 529.50p +1.05%
United Utilities Group (UU.) 901.00p +0.84%
WPP (WPP) 1,310.00p +0.77%
Imperial Tobacco Group (IMT) 2,623.00p +0.77%
Wolseley (WOS) 3,408.00p +0.71%
FTSE 100 - Fallers
BT Group (BT.A) 396.50p -2.36%
International Consolidated Airlines Group SA (CDI) (IAG) 412.60p -1.97%
Mondi (MNDI) 1,097.00p -1.97%
Next (NXT) 6,515.00p -1.66%
Pearson (PSON) 1,132.00p -1.48%
Anglo American (AAL) 1,452.00p -1.33%
Sports Direct International (SPD) 815.00p -1.21%
Old Mutual (OML) 202.10p -1.17%
Aggreko (AGK) 1,660.00p -1.13%
Antofagasta (ANTO) 773.00p -1.02%
FTSE 250 - Risers
WH Smith (SMWH) 1,094.00p +2.72%
JD Sports Fashion (JD.) 1,750.00p +2.34%
Oxford Instruments (OXIG) 1,374.00p +2.23%
Berkeley Group Holdings (The) (BKG) 2,433.00p +2.23%
Betfair Group (BET) 1,022.00p +2.10%
Domino's Pizza Group (DOM) 560.00p +2.00%
Howden Joinery Group (HWDN) 322.50p +1.80%
Tate & Lyle (TATE) 696.50p +1.75%
3i Group (III) 435.30p +1.71%
RPS Group (RPS) 293.00p +1.67%
FTSE 250 - Fallers
Ted Baker (TED) 1,935.00p -4.16%
Vedanta Resources (VED) 1,150.00p -3.44%
African Barrick Gold (ABG) 217.00p -3.17%
Greencore Group (GNC) 282.50p -3.15%
Lonmin (LMI) 242.90p -3.15%
Imagination Technologies Group (IMG) 250.50p -2.64%
Xaar (XAR) 762.50p -2.43%
Cranswick (CWK) 1,280.00p -2.29%
Booker Group (BOK) 142.70p -2.19%
Dunelm Group (DNLM) 880.00p -1.79% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed after industrial output data - UK industrial and manufacturing output rises
- French industrial production gains
- Chinese inflation grows
FTSE 100: -0.02%
DAX: 0.20%
CAC 40: 0.13%
FTSE MIB: 0.14%
IBEX 35: -0.09%
Stoxx 600: 0.32%
European stocks were mixed as investors weighed reports on industrial production in the UK and France.
In the UK, industrial output in the UK climbed 3% year-on-year in April following a 2.5% increase in March, exceeding analysts' estimates for a 2.8% gain.
In France, industrial production rose 0.3% in April, matching the consensus forecast, after a revised 0.4% increase in March.
Another report showed manufacturing production in the UK jumped 4.4% year-on-year in April after rising 3.5% a month earlier. Economists had pencilled in a 4% rise.
In China, inflation rose by 2.5% in May year-on-year following a 1.8% increase a month earlier. Analysts had predicted a 2.4% gain. However, it remains well below the 3.5% target set out by the Chinese government.
The data comes a day after the People's Bank of China decided to cut the reserve requirement ratio by 50 basis points for some select banks, which will take effect on June 16th.
Bank of Ireland, Booker Group
Bank of Ireland declined after US billionaire Wilbur Ross decide to sell his remaining shares in the lender.
Booker Group dropped after Goldman Sachs removed the British food wholesaler from its conviction-buy list, as it forecast a drop in sales at the company's Makro division this year and next.
Orange, which has held talks with Bouygues about buying its telecommunications business, retreated following reports Iliad SA made an informal offer to buy Bouygues Telecom for €4bn to €5bn within the last few weeks.
Gemalto advanced after saying China Telecom's SIM cards will use its software.
The euro fell 0.37% to $1.3544.
Brent crude futures dipped $0.347 to $109.610 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks little changed after jobs and wholesale data US stocks were little changed as reports showed a rise in wholesale inventories and job openings.
US wholesale inventories climbed 1.1% in April, ahead of the 0.6% gain expected by analysts and following a 1.1% increase a month earlier.
Job openings jumped by 4,455 in April after 4,166 openings in March. Analysts had predicted a 4,050 gain.
The National Federation of Independent Business' small-business optimism index increased to 96.6 last month from 95.2 in April, beating forecasts for a reading of 96.2.
eBay slides
eBay declined after saying David Marcus will step down as the head of its PayPal unit to join Facebook. Facebook advanced on the news.
RadioShack Corp. slumped after reporting a wider quarterly loss.
Allergan Inc. edged higher as the Botox maker's board unanimously rejected a takeover offer.
Molson Coors Brewing Co. gained as the North American beer company reported a jump in first quarter earnings.
The 10-year Treasury yield rose three basis points to 2.63%.
West Texas Intermediate crude futures fell $0.038to $104.370 per barrel, according to the ICE. |
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| | Brokers Tips | | Morgan Stanley screens say sell CRH, JD Wetherspoon and many others Morgan Stanley has put out a note compiling a list of stocks that its stock screens suggested were worthy of selling, including building materials group CRH and pub operator JD Wetherspoon.
The note, entitled 'Stock screens suggest selling small caps', contains the latest in the broker's regular screens for potential sell ideas, to help investors find potential underperformers.
"They are based on quantitative metrics only and should be used as a starting point for investors looking for potential sell ideas or underperformers," the broker stressed.
Morgan Stanley's screen included one based on famous hedge fund manager Joel Greenblatt theories, which looks for companies showing low return on capital employed as well as high enterprise value-versus-earnings before interest, tax depreciation and amortisation.
Other screens include a 'Reverse Intelligent Investor' based on the teachings of investor Ben Graham, 'Hype Stocks Running Out of Steam', 'Intra-Sector Hype Stocks', 'Expensive Outperformers' and 'The 3 O’s Screen: Over-loved, Over-owned and Overvalued'.
Building materials group CRH appeared on three screens, as did JD Wetherspoon. 3i, Aviva, Barratt Developments, Dixons Retail, Drax, DS Smith, Greencore, Thomas Cook, Tui and Tullow Oil all appeared on two screens.
The broker recently argued that now was the time to raise exposure to large-cap stocks, as they offer the best risk-reward across the market, in its opinion.
"Consistent with our view that investors should prefer large caps over small and mid-caps, the average size of stocks appearing in two or more of our sell screens is at a record relative low."
The average market cap of the companies that make multiple appearances in its screens is just 35% of the size of the average stock in the MSCI Europe index, "and these sorts of levels have often provided a strong signal to rotate out of small caps", it said.
Over the last six years, the median stock on the ‘Multiple Appearances’ screen has had a cumulative return 21.7% below MSCI Europe, the broker pointed out.
"Over the last year, results have been reasonable, with the median stock underperforming by a cumulative 3.2% in that time, and underperforming by 3.7% relative in the most recent quarter."
Intra-Sector Hype Stocks has been the most effective screen in the last year, while the 3O’s has been the most effective in the last quarter.
The Hype Stocks Running Out of Steam screen included Rightmove, Telecom Plus, Supergroup, Domino's Pizza and Clarkson.
"These stocks are popular, expensive, have high expectations and have rallied recently, but also have weak earnings revision trends. All stocks meet at least four of the five hype criteria: in the top third of European stocks in terms of broker rating, six-month performance, price-to-earnings, price-to-book value and sales growth expectations," Morgan Stanley explained. "In addition, they have a negative and falling earnings revision ratio."
Intra-Sector Hype Stocks looked for strong performers, high valuation, high expectations but weak revisions. These included Thomas Cook, Aviva and Workspace. | | |
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