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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: Ex-divs, airlines, global forecast weigh FTSE down - FTSE ends 34.68 lower at 6,838.87
- World Bank lowers global forecast
- Airlines, Rolls-Royce drag
techMARK 2,840.73 -0.65%
FTSE 100 6,838.87 -0.50%
FTSE 250 16,087.63 -0.76%
London's blue chips finished today's session firmly lower, weighed down by stocks going ex-dividend, airlines, and a reduction in the World Bank's global forecast.
The FTSE 100 closed down 34.68 points at 6,838.87.
"It is becoming increasingly difficult to believe that this market will see 6,930 in the near future, having begun to inexorably falter the closer it gets to 6,880," Chris Beauchamp, Market Analyst at IG said.
"Previous guarded bullishness has given way to increased caution, making it increasingly likely that we see a retest of 6,800."
The main macro news of the day was that the World Bank has downgraded its forecast for global economic growth.
The Bank sees the global economy expanding 2.8% this year, down from a January prediction of 3.2%. The organisation projected slower growth for the US, Russia, China, Brazil and India. It left forecasts for world growth in 2015 unchanged at 3.4%.
Also firmly in focus was the bigger-than-expected drop in the UK unemployment rate to a five-year low of 6.6%, although this failed to have a positive effect on the market as it came alongside figures that showed that wages were rising at a rate well below inflation.
The annual growth in average weekly earnings slowed to just 0.7% in the three months to April, compared with the current consumer price inflation rate at 1.8%.
According to Jasper Lawler, Market Analyst at CMC Markets UK: "The news on unemployment is on the face of it very good for the UK economy. More worrying though is that a large percentage of the jobs created are self-employed perhaps indicating companies are not investing into their workforce as much as the headline number implies.
"With consumer price inflation last reported at 1.8%, inflation is rising at more than twice the rate of wages. The bank of England will be concerned that even though unemployment is falling, if real wage growth is slowing in the UK, the only way to keep up the same growth in spending is by using credit, and that becomes a problem when interest rates rise."
Randgold tracks price of gold higher
Mining group Randgold Resources was a top performer today, carried on the back of a recovering gold price.
J Sainsbury was also higher after coming in slightly ahead of expectations with a 1.1% first-quarter fall in like-for-like (LFL) retail sales, excluding fuel. Outgoing Chief Executive Justin King blamed the fall on lower food price inflation and reduced fuel prices for the group's second straight quarterly drop in sales.
On the downside, the cancellation of Emirates Airlines' major order for 70 new Airbus hit shares of engineer Rolls-Royce, whose order book is to reduce by 3.5% or £2.6bn as a result.
Meanwhile, a number of stocks were trading lower today after going ex-dividend, including heavyweights Vodafone and Johnson Matthey.
Airline groups IAG and easyJet were falling sharply after German peer Lufthansa plummeted in Frankfurt following the news that it would not hit profit guidance for the next two years.
Brewer SABMiller was lower as the stock pulled back after an M&A-inspired boost yesterday when it was reported that a merger with European peer Anheuser-Busch InBev could be on the cards. |
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| | FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 4,482.00p +1.70%
Coca-Cola HBC AG (CDI) (CCH) 1,406.00p +1.22%
AstraZeneca (AZN) 4,400.00p +1.20%
Sainsbury (J) (SBRY) 333.00p +0.97%
Anglo American (AAL) 1,464.50p +0.86%
Friends Life Group Limited (FLG) 330.90p +0.79%
Lloyds Banking Group (LLOY) 79.06p +0.78%
Admiral Group (ADM) 1,510.00p +0.67%
Fresnillo (FRES) 792.50p +0.63%
Morrison (Wm) Supermarkets (MRW) 195.50p +0.51%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 1,017.00p -5.48%
Vodafone Group (VOD) 199.40p -4.52%
easyJet (EZJ) 1,530.00p -3.95%
International Consolidated Airlines Group SA (CDI) (IAG) 400.00p -3.05%
Smiths Group (SMIN) 1,307.00p -2.97%
Mondi (MNDI) 1,067.00p -2.73%
SABMiller (SAB) 3,395.00p -1.88%
Land Securities Group (LAND) 1,074.00p -1.83%
Sage Group (SGE) 403.20p -1.75%
Aberdeen Asset Management (ADN) 445.50p -1.72%
FTSE 250 - Risers
esure Group (ESUR) 274.20p +4.54%
Polymetal International (POLY) 555.00p +3.45%
African Barrick Gold (ABG) 223.20p +2.86%
Perform Group (PER) 270.10p +2.70%
Fenner (FENR) 351.20p +2.66%
Dechra Pharmaceuticals (DPH) 717.50p +2.65%
Genus (GNS) 1,072.00p +2.58%
IP Group (IPO) 184.20p +1.82%
Dairy Crest Group (DCG) 477.40p +1.70%
Barr (A.G.) (BAG) 638.00p +1.59%
FTSE 250 - Fallers
Supergroup (SGP) 1,063.00p -7.57%
Intermediate Capital Group (ICP) 397.70p -5.20%
Afren (AFR) 144.20p -4.50%
Bank of Georgia Holdings (BGEO) 2,370.00p -3.66%
Halfords Group (HFD) 492.80p -3.66%
Ferrexpo (FXPO) 132.40p -3.64%
Greencore Group (GNC) 273.00p -3.36%
Ocado Group (OCDO) 367.40p -3.32%
JD Sports Fashion (JD.) 1,698.00p -2.97%
Homeserve (HSV) 329.60p -2.92% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Markets slump on World Bank growth forecast - World Bank cuts global growth forecast
- UK jobless rate falls
- ECB's Mersch outlines possible ABS plans
FTSE 100: -0.50%
DAX: -0.79%
CAC 40: -0.87%
FTSE MIB: -1.24%
IBEX 35: -0.70%
Stoxx 600: -0.56%
European markets reacted negatively to news the World Bank has cut its global growth forecast.
The World Bank downgraded its 2014 outlook to 2.8% from 3.2%, citing weaker than expected expansion in the US, the crisis in Ukraine and a slower growth outlook for China.
In the UK, a report showed employers added 345,000 jobs in the three months to April, compared to 283,000 the previous quarter. Analysts had expected 270,000 jobs.
The unemployment rate fell to 6.6% in the three-month period from 6.8% previously, better than the 6.7% that was forecast by analysts. It marked the lowest point in five years.
Jobless claims dropped 27,400 in May following a fall of 28,400 a month earlier. Economists had pencilled in a 25,000 decline.
However, average weekly earnings rose by 0.7% in in the three months to April, missing the 1.2% estimate and less than the 1.7% the prior period.
"With consumer price inflation last reported at 1.8%, inflation is rising at more than twice the rate of wage," said CMC Markets UK Analyst Jasper Lawler.
"The Bank of England will be concerned that even though unemployment is falling, if real wage growth is slowing in the UK, the only way to keep up the same growth in spending is by using credit, and that becomes a problem when interest rates rise."
ECB may buy "simple and transparent" ABS, says Mersch
European Central Bank (ECB) official Yves Mersch said the monetary authority is working towards a more holistic approach to the regulatory treatment of ABS in Europe.
"There is a growing consensus that an instrument once seen as part of the problem could in fact be part of the solution," he said of talks about ABS in a speech entitled 'Next steps for European securitisation markets'.
Airlines descend
Airbus dropped after saying that Emirates pulled out of its planned purchase of 50 A350-900 planes and 20 of the larger -1000 variant.
Rolls-Royce Holdings declined after revealing that the Emirates' cancellation reduces its order book by about £2.6bn.
Lufthansa slumped after lowering its forecast for operating profit this year and next, citing the effect of strikes and the devaluation of the Venezuelan bolivar for the reduction.
Vallourec retreated as the French producer of steel pipes for the oil and gas industry said 2014 earnings before interest, taxes, depreciation and amortisation will be about 10% lower than the previous year due to a fall in orders from Petroleo Brasileiro.
H&M advanced after the European retailer said revenue in May jumped 19% from a year earlier, exceeding analysts' estimates.
Inditex gained as the world's largest apparel retailer posted first-quarter net income that beat analysts' estimates.
Nutreco edged lower after saying it has halted a process to sell its Iberian compound feed and meat assets.
Genel Energy, which owns oil and gas assets in Iraq's Kurdistan region, plunged on news militants from a breakaway al-Qaeda group captured the city of Mosul.
The euro fell 0.13% to $1.3530.
Brent crude futures rose $0.337 to $109.890 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks fall on World Bank downgrade US stocks opened lower after the World Bank downgraded its forecast for global economic growth.
The World Bank sees the global economy expanding 2.8% this year, down from a January prediction of 3.2%. The organisation projected slower growth for the US, Russia, China, Brazil and India. It left forecasts for world growth in 2015 unchanged at 3.4%.
In the US, a report from the Mortgage Bankers Association showed mortgage applications in the week ended June 6th rose by 10.3% following a 3.1% fall a week earlier.
Alpari UK analyst Craig Erlam noted it will be a quiet day for the US with little data due out and no major events scheduled.
"With that in mind, the lack of a positive catalyst may offer the opportunity for traders to lock in some profits and wait for a lower entry," he said.
"I don't expect a significant correction at this stage but a shallow correction or, at least, a consolidation of some kind may be on the cards."
Bank of America
Bank of America retreated after a report said the Justice Department may seek $17bn to settle probes into mortgage lending.
Hilton Worldwide declined after registering to sell 90m shares held by Blackstone Group.
CBS Corp. advanced after saying it will sell its 81% stake in CBS Outdoor Americas Inc.
H&R Block jumped after reporting fourth quarter sales that beat analysts' forecasts.
The US 10-year yield fell two basis points to 2.62%.
Brent crude futures rose $0.391 to $109.950 per barrel, according to the ICE. |
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| | Wednesday broker round-up | | ASOS: Berenberg reduces target from 5350p to 3785p, while its buy recommendation is kept.
Babcock International: Citi reduces target from 1320p to 1280p and retains a neutral rating.
Cobham: UBS raises target from 290p to 315p and keeps a neutral rating.
Dechra Pharmaceuticals: Investec increases target from 787p to 842p and maintains its buy recommendation.
Fenner: JP Morgan cuts target from 405p to 355p and retains a neutral rating.
Premier Foods: Goldman Sachs ups target from 75p to 90p and upgrades to buy.
Pure Circle: Numis ups target from 555p to 600p and upgrades from hold to buy.
Ted Baker: Oriel downgrades from buy to add with a target of 2200p.
Whitbread: Exane initiates with a target of 5000p and an outperform rating. | | |
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