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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: Downbeat finish for FTSE as geopolitical tensions weigh - FTSE 100 closes 23.21 points lower at 6,754.64
- Iraq tensions escalate, oil prices rise
- Bad new for UK high street
techMARK 2,797.06 -0.64%
FTSE 100 6,754.64 -0.34%
FTSE 250 15,706.73 -0.68%
London's blue chips ended today's session broadly lower, hit by weak investor sentiment amid mounting tensions in Iraq.
The FTSE 100 closed 23.21 points lower at 6,754.64.
As noted by Chris Beauchamp, IG Market Analyst, the market's "underlying sentiment has not really shifted from the doom of last week".
According to the most recent reports, more than 270 rebels were yesterday killed by Iraq's army, with tensions escalating as further areas in the north of the country are seized.
The turmoil has raised concerns about oil supply, pushing prices significantly higher.
"Geopolitics is still at the top of the list of worries, with investors decidedly unconvinced that US assistance would make any real difference to the situation," Beauchamp continued.
"Mark Carney's comments last week seem to have kick-started speculation on rate increases by major central banks, and with the Federal Reserve meeting on the agenda for the week the focus has shifted from the Bank of England to Washington. Any changes to the statement will be in the form of subtle tweaking to the Fed's view, but as at the last meeting the net result is likely to be no change."
UK asking prices rise just 0.1% in June, Rightmove says
In today's macro news, property website Rightmove revealed that asking prices for homes in the UK were virtually unchanged in June, rising by 0.1% month-on-month to reach £272,275.
That followed a 3.6% increase in the previous month. Prices were left standing 7.7% higher versus last year.
Meanwhile, UK workers' productivity has failed to bounce back since the financial crisis, casting doubt on prospects for more jobs, the Bank of England said today.
Productivity, or the quantity of goods and services produced per worker or per hour, has been exceptionally weak since 2007/8, with whole economy output per hour still 16% below the level reached before the crisis, the Bank said in its quarterly bulletin.
Retail figures in focus
Retail insolvencies hit a five-year high last year as competition from supermarket convenience stores took its toll on street corner shops, a study out on Monday showed.
The number of shops going out of business in England, Scotland and Wales rose 12% to 1,287 in the year to March 31st against the previous year, according to accountants Wilkins Kennedy.
That comes as figures also showed that the number of people venturing onto the UK high street fell last month, fuelling concern about the sustainability of consumer spending.
Shopper numbers dropped 0.9% in May against the same month last year, although it was up on April's fall of 1.4%, data from the British Retail Consortium (BRC) and retail research group Springboard showed.
Over in the States, the International Monetary Fund (IMF) cut its forecast for US economic growth to 2% from 3%, due to the impact of the harsh winter.
In brighter news, industrial production grew 0.6% last month following a 0.3% fall in April, exceeding forecasts for a 0.5% increase.
Miners and oil stocks lead the upside
Fresnillo, Randgold Resources, Glencore, BHP Billiton and Anglo American were all tracking metals prices higher.
Glencore was also lifted by Investec, which moved its target from 302p to 319p and upgraded the stock from 'reduce' to 'hold'.
Driven higher by supply concerns, rising oil prices prompted yet another jump in oil stocks today, with Tullow Oil and Petrofac both strong gainers. As well, shares of Tullow Oil might be benefitting as traders look to get in ahead of a progress update from the firm on its Hanssen project.
Meanwhile, telecoms group BT was firmly in the red after The Sunday Times indicated that the company's pension costs may rise.
Rolls-Royce was lower after analysts at Societe Generale cut their rating on the stock from 'hold' to 'sell', saying that there is "some risk of a further earnings downgrade" at the engine maker. |
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FTSE 100 - Risers
Fresnillo (FRES) 822.00p +1.86%
Tullow Oil (TLW) 856.50p +1.78%
Glencore (GLEN) 322.50p +1.42%
Aberdeen Asset Management (ADN) 445.10p +1.39%
Next (NXT) 6,320.00p +1.12%
Randgold Resources Ltd. (RRS) 4,615.00p +1.12%
William Hill (WMH) 340.70p +1.01%
Petrofac Ltd. (PFC) 1,268.00p +0.88%
Anglo American (AAL) 1,422.00p +0.85%
BHP Billiton (BLT) 1,865.00p +0.81%
FTSE 100 - Fallers
London Stock Exchange Group (LSE) 1,920.00p -2.39%
BT Group (BT.A) 384.90p -2.38%
Melrose Industries (MRO) 273.90p -2.25%
Experian (EXPN) 1,005.00p -2.24%
Morrison (Wm) Supermarkets (MRW) 188.30p -2.08%
St James's Place (STJ) 768.00p -2.04%
Carnival (CCL) 2,307.00p -2.00%
Persimmon (PSN) 1,187.00p -1.98%
Royal Mail (RMG) 488.70p -1.89%
TUI Travel (TT.) 384.70p -1.84%
FTSE 250 - Risers
PayPoint (PAY) 1,140.00p +4.30%
Kazakhmys (KAZ) 284.00p +3.09%
Infinis Energy (INFI) 217.00p +2.89%
Premier Oil (PMO) 351.60p +2.84%
African Barrick Gold (ABG) 224.20p +2.66%
Debenhams (DEB) 73.00p +2.46%
Dechra Pharmaceuticals (DPH) 704.50p +1.73%
Centamin (DI) (CEY) 63.10p +1.45%
Hunting (HTG) 856.00p +1.24%
AL Noor Hospitals Group (ANH) 1,006.00p +1.16%
FTSE 250 - Fallers
Supergroup (SGP) 905.00p -9.50%
Evraz (EVR) 92.00p -5.20%
888 Holdings (888) 113.00p -3.83%
Dignity (DTY) 1,341.00p -3.80%
St. Modwen Properties (SMP) 353.70p -3.76%
Ferrexpo (FXPO) 124.60p -3.71%
Howden Joinery Group (HWDN) 297.40p -3.32%
Tullett Prebon (TLPR) 268.80p -3.31%
Ted Baker (TED) 1,812.00p -3.10%
Rathbone Brothers (RAT) 1,997.00p -3.06% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks slide amid Iraq turmoil - Eurozone inflation falls
- US said to be in talks with Iran to aid Iraq
- Russia cuts off gas supply to Ukraine
- IMF downgrades US growth forecast
FTSE 100: -0.34%
DAX: -0.29%
CAC 40: -0.73%
FTSE MIB: -0.86%
IBEX 35: -0.95%
Stoxx 600: -0.45%
European stocks slumped as tensions in Iraq grew and as a report confirmed Eurozone inflation fell in May.
The US is reportedly considering talks with Iran to support the Iraq government in their fight against Sunni Islamist insurgents.
The news comes after militants from the Islamic State of Iraq and the Levant (ISIL) routed Baghdad's army and seized the north of the country.
Concerns over the unrest's impact on oil supplies have pushed prices higher. Brent crude futures rose $0.504 to $113.030 per barrel in afternoon trading, according to the ICE.
Also weighing on stocks, Russia's OAO Gazprom cut off gas supplies to Ukraine after saying it hadn't received any payments before a deadline of 10:00 Moscow time. The energy company will continue to supply its customers in the European Union through the same pipeline. The state-run firm warned the European Commission of possible risks to the transit of gas before the announcement.
In the Eurozone, consumer price figures were unrevised at 0.5% in May, falling from 0.7% in April, as expected, well below the European Central Bank's (ECB) 2% target.
"All in all, today's release was largely within our expectations, confirming that euroarea inflation remains weak," Barclays Research said. "We expect 2014's average to be 0.6% and look for inflation to stay at around these levels until the end of the year."
The ECB earlier this month cut interest rates and the deposit rate in an effort to curb weak inflation and boost the stagnant recovery.
IMF cuts US growth forecast
The International Monetary Fund (IMF) has cut its projection for economic growth this year to 2% from 3%, due to the impact of the harsh winter. The Washington-based lender still sees that economy expanding 3% next year. The IMF said the forecasts mean the Federal Reserve may have scope to keep interest rates at zero for longer than investors expect.
Meanwhile, US industrial production grew 0.6% last month following a 0.3% fall in April, exceeding forecasts for a 0.5% increase.
Separate data showed manufacturing output climbed 0.6% in May after a 0.1% drop a month earlier, in line with analysts' estimates.
BT slides
BT Group declined after the Sunday Times reported that the former state-run firm may have to increase payments to its company pension plan.
Telecom Italia SpA dropped as Mediobanca SpA said it will withdraw from Telco SpA, an investment vehicle that owns 22.4% of Telecom Italia, according to Bloomberg data.
Actelion gained after saying its experimental treatment for a lung disease met the main goal of a late-stage study.
The euro rose 0.26% to $1.3575. |
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| | US Market Report | | US open: Stocks fall on Iraq turmoil, IMF downgrade US stocks dropped as the turmoil in Iraq intensified and the International Monetary Fund (IMF) cut its forecast for US economic growth.
Militants from the Islamic State of Iraq and the Levant (ISIL) have routed Baghdad's army and seized the north of the country in the past week.
The US is reportedly considering talks with Iran to support the Iraq government in their fight against Sunni Islamist insurgents.
Concerns over the turmoil's impact on oil supply have pushed prices higher. West Texas Intermediate crude futures rose $0.053 to $112.540 per barrel at 14:36 BST, according to the ICE.
Back in the US, the IMF cut its projection for economic growth this year to 2% from 3%, due to the impact of the harsh winter. The Washington-based lender still sees that economy expanding 3% next year.
Meanwhile, US industrial production grew 0.6% last month following a 0.3% fall in April, exceeding forecasts for a 0.5% increase.
Separate data showed manufacturing output climbed 0.6% in May after a 0.1% drop a month earlier, in line with analysts' estimates.
Covidien agrees to buy Medtronic
Covidien jumped after Medtronic agreed to buy the Irish company for $42.9bn. Medtronic also gained.
Williams Cos. edged higher after agreeing to buy control of Access Midstream Partners LP for $6bn.
The US 10-year yield was flat at 2.60%. |
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| | Broker Tips | | Broker tips: Rolls-Royce, Reckitt, Mitchells & Butlers, Majestic Societe Generale has cut its recommendation for engine maker Rolls-Royce from 'hold' to 'sell', saying that earnings forecasts are at risk.
Ahead of the company's investor briefing in London on Thursday, the bank said: "We expect some concerns over the outlook for 2014 earnings given management guidance of a strong second-half bias to the results and uncertainty over the group's interest in Wärtsilä."
Exane BNP Paribas has upped its target for consumer products group Reckitt Benckiser but has kept a cautious stance, saying that the stock's valuation is too high.
"The Reckitt story is not a bad one, but with the shares trading at 20 times [core estimated earnings for 2015] for a 7% underlying mid-term earnings grower, we believe it is more than priced.
Numis Securities has maintained a 'buy' rating for Mitchells & Butlers (M&B) and upgraded its forecasts after the pub group's £266m acquisition of the Orchid Group estate.
The broker said "the deal is a good one for M&B", buying 173 of Orchid's 220 pubs, adding food-led brands including The Great British Carvery, Thai Dragons and Oriental Restaurants and All Inns. Numis said that the estimated £6m of synergies from the deal could be a "conservative" target.
Oriel Securities repeated its 'reduce' rating for Majestic Wine after the company's annual results on Monday.
"Given the March profit warning we knew FY14 would look grim and management's rhetoric for FY15 remains highly cautious," the broker said. It added that momentum at the wine retailer is negative yet the stock's valuation is still at a premium to the sector. | | |
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