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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: FTSE above 6,800, lifted by Fed, Rolls-Royce, housing stocks - FTSE closes up 29.55 points at 6,808.11
- Fed in focus
- Shire, housing stocks lead
techMARK 2,814.08 +0.33%
FTSE 100 6,808.11 +0.44%
FTSE 250 15,683.88 +0.38%
Despite a drop in the final minutes of trade, the top tier index ended today's session above the 6,800 level, having been fairly steady following a strong rise at the opening bell.
The FTSE 100 closed 29.55 points higher at 6,808.11, lifted by last night's Fed announcement, a strong performance from Rolls Royce, and gains amongst housing stocks.
It was announced yesterday evening that the Federal Reserve had decided to keep interest rates low at 0.25%, but cut a further $10bn off monthly asset purchases to $35bn.
"For the FTSE, Iraq worries have been banished for the time being, as the Federal Reserve seems distinctly relaxed about the path inflation is taking," Chris Beauchamp, Market Analyst at IG, said.
"This isn't a signal to go all out on equities, but it means that one reason for caution has been taken away, and traders can rest easy in the continuing assumption that US interest rates are going nowhere until the middle of 2015. The Fed's dovish stance has allowed many of the recent underperformers to bounce back, with Ashtead's shareholders returning and pushing the shares up 3.5%.
"Even so, the index still has to break 6,880 to avoid the impression that we are still struggling to find a catalyst for a sustained move higher for the FTSE 100."
UK retail sales drop in May, but get World Cup boost
UK retail sales dropped in May against April, although the dip was less than analysts expected as World Cup football kit sales boosted the figures.
Sales fell 0.5% in May compared with April, although the decline was less than the 0.6% retreat forecast by analysts, according to the Office for National Statistics.
Sales rose 3.9% in the year to May, lower than the 4.3% growth expected by a poll of analysts.
In other UK macro news, it was revealed mortgage lending stayed flat in May against April as a clampdown on borrowing to prevent a housing bubble kicked in.
Gross mortgage lending held steady in May at an estimated £16.5bn, according to the Council of Mortgage Lenders (CML), identical to April's gross lending total, but 12% higher than the £14.8bn in May last year.
In today's US news, initial jobless claims came in at 312,000 in the week to June 14th after a revised 318,000 the previous week. Analysts had predicted 314,000.
"Overall, this report is consistent with the steady improvement in the separations side of the labour market in the second quarter after a volatile first quarter in which continuing claims moved higher in January before resuming their downward trend in February," Barclays Research said.
Rolls-Royce soars on £1bn buyback proposal
Jet engine maker Rolls-Royce took off after pledging to buy back £1bn of shares if it succeeds in selling its energy gas turbine and compressor business to Germany's Siemens. The company also outlined plans to reduce capital spending in the next five years.
Construction equipment rental group Ashtead was once again on the up; earlier in the week its results failed to inspire the market, although yesterday saw several brokers, including Oriel and JPMorgan Cazenove issue bullish notes foretelling of long-term growth.
Housing stocks were also rebounding after share prices sank last week on concerns about a sooner-than-expected rise in interest rates in the UK. Barratt Developments, CRH and Travis Perkins were all very much in positive territory after Bank of England policymaker Martin Weale said he didn't see the need for an immediate rate hike.
Meanwhile, Vodafone shares were hit by reports its entire Australian network went down for several hours. Calls, SMS and data services were all affected, according to ITN.
Shire fell after making strong gains in the past few sessions, buoyed by widespread speculation that it will soon be the target of a takeover bid.
Standard Chartered was knocked lower by Nomura, which cut its target from 1,610p to 1,580p. |
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FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 1,092.00p +8.12%
Ashtead Group (AHT) 863.50p +4.04%
Barratt Developments (BDEV) 358.90p +3.91%
CRH (CRH) 1,657.00p +2.86%
Travis Perkins (TPK) 1,622.00p +2.59%
Randgold Resources Ltd. (RRS) 4,734.00p +2.47%
Mondi (MNDI) 1,095.00p +2.34%
Weir Group (WEIR) 2,688.00p +2.32%
BT Group (BT.A) 392.50p +1.95%
William Hill (WMH) 342.60p +1.93%
FTSE 100 - Fallers
Vodafone Group (VOD) 194.85p -1.64%
Shire Plc (SHP) 3,738.00p -1.24%
Standard Chartered (STAN) 1,269.50p -1.05%
Prudential (PRU) 1,345.50p -0.74%
Hargreaves Lansdown (HL.) 1,259.00p -0.63%
BG Group (BG.) 1,260.00p -0.55%
GKN (GKN) 367.60p -0.51%
easyJet (EZJ) 1,425.00p -0.42%
Tesco (TSCO) 290.90p -0.41%
St James's Place (STJ) 755.50p -0.40%
FTSE 250 - Risers
Supergroup (SGP) 929.50p +6.84%
Daejan Holdings (DJAN) 4,986.00p +6.09%
Man Group (EMG) 105.10p +6.00%
Renishaw (RSW) 1,725.00p +5.57%
Northgate (NTG) 519.00p +5.12%
Polymetal International (POLY) 559.50p +4.19%
Bovis Homes Group (BVS) 762.00p +4.03%
Go-Ahead Group (GOG) 2,263.00p +3.95%
Infinis Energy (INFI) 237.50p +3.94%
Bellway (BWY) 1,474.00p +3.66%
FTSE 250 - Fallers
Rank Group (RNK) 159.00p -5.36%
Ferrexpo (FXPO) 123.60p -5.29%
Barr (A.G.) (BAG) 598.50p -5.15%
African Barrick Gold (ABG) 204.60p -4.44%
Euromoney Institutional Investor (ERM) 1,100.00p -4.10%
Synthomer (SYNT) 236.30p -3.75%
Keller Group (KLR) 925.50p -3.69%
KCOM Group (KCOM) 91.10p -3.44%
Kier Group (KIE) 1,676.00p -3.29%
Laird (LRD) 286.10p -3.21% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rise as Fed forecasts US growth - Fed keeps interest rates low, cuts QE
- US jobless claims ease
- UK retail sales fall
- Iraq battles militants over control of oil refinery
FTSE 100: 0.44%
DAX: 0.74%
CAC 40: 0.72%
FTSE MIB: 0.85%
IBEX 35: 0.68%
Stoxx 600: 0.58%
European stocks gained after the Federal Reserve said the US economy will see further growth and decided to keep interest rates low.
The Fed maintained interest rates at 0.25% and reduced monthly asset purchases by $10bn to $35bn after wrapping up its two-day policy meeting yesterday.
"Economic activity has rebounded in recent months," the Federal Open Market Committee said.
The Fed forecast long-term growth for the US economy of 2.1% to 2.3%, compared with 2.2% to 2.3% three months ago.
Policymakers reiterated that they will continue to reduce the pace of asset purchases in further measured steps, given the pick-up in the economy.
Turning to today's US news, initial jobless came in at 312,000 in the week to June 14th after a revised 318,000 claims the previous week. Analysts had predicted 314,000 claims.
"Overall, this report is consistent with the steady improvement in the separations side of the labour market in the second quarter after a volatile first quarter in which continuing claims moved higher in January before resuming their downward trend in February," Barclays Research said.
In the UK, retail sales fell 0.5% in May compared with April, although the decline was less than the 0.6% retreat forecast by analysts, according to the Office for National Statistics.
Iraq turmoil
Iraq government forces are battling Sunni Muslim militants for control of the country's biggest oil refinery in Baghdad.
Officials insisted security forces were "in full control" of the Baiji refinery but militants led by the jihadist Islamic State in Iraq and the Levant (ISIS) have surrounded the facility.
Iraq has asked for US air strikes on the militants and President Barack Obama was due to make a statement at 16:30 GMT.
Brent crude futures rose $0.427 to $114.750 per barrel, according to the ICE, in the wake of concerns the crisis could disrupt oil supplies.
CGG, Rolls-Royce
CGG rallied after saying that Pan American geophysical bought one of its land-surveying systems for delivery in July.
Rolls-Royce gained after saying it will buy back £1bn of its own shares.
Electricite de France declined after French Energy Minister Segolene Royal said the utility won't increase rates on August 1st.
Peugeot was higher as Exane BNP Paribas cited Chief Financial Officer Jean-Baptiste de Chatillon as saying that growing volumes made the Chinese market a major contributor to profit and cash.
The euro rose 0.20% to $1.3622. |
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| | US Market Report | | US open: Stocks rise after Fed keeps interest rates low US stocks advanced after the Federal Reserve decided to keep interest rates low and a report showed the number of weekly jobless claims eased more than forecast.
The central bank yesterday announced it would maintain interest rates at 0.25% but cut a further $10bn off monthly asset purchases to $35bn.
"Economic activity has rebounded in recent months," the Federal Open Market Committee said.
Policymakers reiterated that they will continue to reduce the pace of asset purchases in further measured steps, given the pick-up in the economy.
In today's news, initial jobless came in at 312,000 in the week to June 14th after a revised 318,000 claims the previous week. Analysts had predicted 314,000 claims.
"Overall, this report is consistent with the steady improvement in the separations side of the labour market in the second quarter after a volatile first quarter in which continuing claims moved higher in January before resuming their downward trend in February," Barclays Research said.
Iraq crisis
Iraqi Prime Minister Nouri al-Maliki will not step down as a condition of US air strikes again Sunni militants, a spokesman told The Guardian.
The news comes amid pressure on President Barack Obama from US lawmakers to persuade Maliki to leave his position over what they see as failed leadership in the face of an insurgency.
West Texas Intermediate crude futures fell $0.236 to $105.720 per barrel, according to the ICE, amid concerns that the Iraq turmoil will disrupt oil supplies.
BlackBerry, Red Hat
BlackBerry gained after reporting a narrower first-quarter loss than analysts had projected.
Red Hat jumped after the seller of Linux operating-system software increased its annual revenue forecast.
Starbucks edged higher after UBS boosted its rating on the world's largest coffee-shop chain to 'buy' from 'neutral'.
The US 10-year yield fell two basis points to 2.57%. |
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| | Broker Tips | | Broker tips: Rolls-Royce, BG Group, Micro Focus, SuperGroup Investec has kept a 'buy' rating for Rolls-Royce, labelling the engineer as a "shareholder-friendly diversified financial" after a potential £1bn share buyback was announced on Thursday.
"We do not believe the share buyback was expected by investors and, as such, we think it is likely to be taken very positively," Investec said.
Credit Suisse has downgraded BG Group from 'neutral' to 'underperform', saying it sees "weak spots in BG's defence line".
The bank expects 2015 to be "another challenging year" for BG with risks to its liquefied natural gas (LNG) operations.
Numis Securities has upgraded its forecast for Micro Focus after the software group beat guidance and analysts' forecasts on Thursday.
While the broker has lowered its recommendation for the stock from 'buy' to 'add', it still said that the "rating is not demanding and we see room for further good upside". It left its 920p target unchanged.
Canaccord Genuity still recommends investors to 'buy' shares of SuperGroup despite the recent sell-off, with the broker saying that the "brand [is] still in fashion, even if shares aren't".
"With no change to the medium-term growth outlook, and the internal problems of the past now well behind the company, the share price offers an excellent entry point for any investors who missed the ramp up off the 2012 low." | | |
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