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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: Stocks in holding pattern, watching Middle East and Ukraine - Slight rise in the FTSE 100
- Shire jumps after rejecting £27bn AbbVie proposal
- TSB rises strongly after IPO
- Iran still in the spotlight as Obama sends advisers
techMARK 2,860.98 +1.67%
FTSE 100 6,825.20 +0.25%
FTSE 250 15,791.42 +0.69%
UK stocks ended the day slightly higher as investors opted to remain on the side lines given the dearth of macroeconomic news and as they awaited greater clarity on the situation brewing in the Ukraine and in the Middle East.
Nevertheless, at the sector level the recent rotation towards more defensive issues would seem to belie the underlying moderately cautious tone in the equity space.
The FTSE 100 was trading 0.3% higher at 6,828 by around midday after hitting a one-week high of 6,808.11 the day before.
For today at least the negative news out of Iraq seems to have died down a bit. Of interest, Capital Economics wrote today to clients explaining to them that they see a benign scenario, under which the current conflict in Iraq abates and the price of oil declines, as the most likely. That comes after the US last night indicated that it has not taken the option of air strikes against the insurgents 'off the table'. In exchange, however, it has joined others' calls for political change in Iraq.
"The positive stance taken by Iran is already helping to improve relations between Iran and the West, or at least the EU, despite the reservations of Saudi Arabia and Israel. This could lead to an earlier lifting of sanctions on Iranian oil. More speculatively, the relative stability of the Kurdish area in the face of the insurgent threat could actually led to higher investment in the oil industry in that part of Iraq," the think-tank added.
In parallel, the conflict in Ukraine's eastern reaches seems to be intensifying, with heavy fighting having been reported near the city of Artemivsk, in the Donetsk region.
Data released today by the Office for National Statistics (ONS), the underlying public sector net borrowing requirement (PSNBR) for the UK came in at £13.3bn for May 2014, which was up from £12.6bn in May 2013.
Cable reached an intra-day high of 1.7062 ahead of next week's policy announcement from the Financial Policy Committee, but was rebuffed at technical resistance towards 1.7050.
A majority of the market seems to confide in the ability of the Monetary Policy Committee to raise rates gradually. However, and on a discordant note, BNP Paribas had this to say today: "If history is any guide, the Bank of England's Monetary Policy Committee will find it hard to raise rates as gradually in 2016 as it is currently suggesting."
Shire rebuffs AbbVie approach, healthcare stocks gain
Shares in Shire surged after the pharmaceutical group rejected a £27bn takeover approach by AbbVie, saying it "fundamentally undervalued" the company and its prospects.
Panmure Gordon hiked its target for the stock on Friday, saying that the AbbVie's proposal was "barely adequate". The broker said that Shire's rare diseases business is one of the "hottest assets in biopharmaceuticals".
Pharma peers AstraZeneca and GlaxoSmithKline were also rising today, along with medical devices maker Smith & Nephew which itself has been at the centre of takeover speculation in recent months.
TSB, the high-street banking arm of Lloyds, put in a moderately decent performance on its first day as a listed company. Lloyds sold a bigger stake than expected in the initial public offer that was priced to go at 260p, above the mid-point of the 220-290p range set out earlier this month. The stock was up 14.6% at 294p by noon.
Mining stocks edged higher with precious metal producers Fresnillo, Randgold and African Barrick Gold rising strongly after gold prices hit a two-month high yesterday.
Vodafone continued to slide after Bank of America Merrill Lynch on Thursday downgraded the stock to 'neutral' and raised questions about Project Spring, the company's £19bn infrastructure investment programme. The stock was also hit by the news its Australian network had suffered a major failure, resulting in the comany offering a free weekend of data to its customers. |
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| | FTSE 100 - Risers
Shire Plc (SHP) 4,371.00p +16.93%
International Consolidated Airlines Group SA (CDI) (IAG) 384.60p +2.40%
Whitbread (WTB) 4,403.00p +2.40%
British Sky Broadcasting Group (BSY) 891.50p +2.29%
easyJet (EZJ) 1,452.00p +1.89%
Aggreko (AGK) 1,632.00p +1.75%
Randgold Resources Ltd. (RRS) 4,812.00p +1.65%
Fresnillo (FRES) 847.00p +1.44%
Imperial Tobacco Group (IMT) 2,705.00p +1.42%
Carnival (CCL) 2,299.00p +1.32%
FTSE 100 - Fallers
Melrose Industries (MRO) 262.00p -2.78%
CRH (CRH) 1,622.00p -2.11%
BG Group (BG.) 1,239.50p -1.63%
Vodafone Group (VOD) 191.85p -1.54%
Sainsbury (J) (SBRY) 316.80p -1.40%
Marks & Spencer Group (MKS) 433.70p -1.32%
RSA Insurance Group (RSA) 491.60p -1.25%
BT Group (BT.A) 387.80p -1.20%
St James's Place (STJ) 746.50p -1.19%
Admiral Group (ADM) 1,541.00p -1.03%
FTSE 250 - Risers
Barr (A.G.) (BAG) 672.00p +12.28%
Rank Group (RNK) 175.80p +10.57%
Restaurant Group (RTN) 598.50p +7.55%
IP Group (IPO) 199.90p +7.18%
Wetherspoon (J.D.) (JDW) 831.00p +6.20%
Cranswick (CWK) 1,281.00p +6.13%
Fisher (James) & Sons (FSJ) 1,384.00p +5.65%
Petra Diamonds Ltd.(DI) (PDL) 192.30p +5.08%
Genus (GNS) 1,141.00p +4.87%
Kier Group (KIE) 1,754.00p +4.65%
FTSE 250 - Fallers
Renishaw (RSW) 1,595.00p -7.54%
Foxtons Group (FOXT) 279.90p -5.60%
Electrocomponents (ECM) 268.70p -3.52%
Daejan Holdings (DJAN) 4,830.00p -3.13%
Carillion (CLLN) 331.40p -2.64%
AL Noor Hospitals Group (ANH) 1,018.00p -2.49%
BH Macro Ltd. GBP Shares (BHMG) 1,920.00p -2.44%
Premier Oil (PMO) 335.20p -2.39%
BH Global Ltd. GBP Shares (BHGG) 1,162.00p -2.35%
Spirent Communications (SPT) 95.70p -2.10% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed on Iraq unrest - Iraq forces fight Sunni Islamists
- Eurozone consumer confidence falls
FTSE 100: 0.25%
DAX: -0.17%
CAC 40: -0.48%
FTSE MIB: -1.08%
IBEX 35: -0.29%
Stoxx 600: -0.02%
European stocks ended the week mixed as investors sat on their hands amid the Iraq crisis and a lack of economic data.
US President Barack Obama has ordered up to 300 militant advisors to assist in the training of troops in Iraq in the battle against the Islamic State of Iraq and Syria (ISIS) which has taken over various parts of the country. However, he held off granting a request for air strikes from the Shi'ite-led government.
Iraq forces are now massing north of Baghdad to fight the Sunni Islamists.
The turmoil has pushed the price of oil higher in recent days to levels not seen since last September. Brent crude futures eased back $0.314 to $114.700 per barrel in afternoon trading.
"The situation in Iraq could play out in many ways," Capital Economics said.
"In a 'good' scenario, the crisis would ease soon and there could even be some positive fallout for the region. (Our current forecast that Brent will drop back below $100 per barrel within the next 6-12 months assumes a benign outcome).
"In a 'bad' scenario, continued uncertainty would see oil prices grind higher to the $120 level that previously has been followed by a slowdown in the global economy. However, in an 'ugly'scenario, where the bulk of Iraqi supply is lost, the price of Brent could easily surge to new record highs above $140."
With little economic reports out, the focus was centred on the situation in Iraq.
The only significant release in Europe was Eurozone consumer confidence figures. The sentiment index fell unexpectedly to -7.4 in June from -7.1 a month earlier. Analysts had predicted a rise to -6.5.
France to take stake in Alstom
Alstom jumped as France announced it take a 20% stake in the company in an alliance with GE, according to reports.
Shire's shares surged after US drugmaker AbbVie confirmed it had made a bid to buy the firm. The UK-listed company, however, rejected the £27bn approach, saying it "fundamentally undervalued" its prospects.
TSB gained on its first day on the stock market in London. Lloyds Banking Group sold a 35% stake in the lender, more than the 25% it had planned, due to strong demand from investors.
Euronext fell on its own debut in Paris as Intercontinental Exchange offloaded the operator of stock markets in France, the Netherlands and Belgium.
The euro fell 0.18% to $1.3584. |
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| | US Market Report | | US open: Stocks little changed as US sends help to Iraq US stocks were little changed as investors assessed the crisis in Iraq.
President Barack Obama has ordered up to 300 militant advisors to assist in the training of troops in Iraq in the battle against he Islamic State of Iraq and Syria (ISIS) which has taken over various parts of the country.
Islamist-led militants and pro-government forces are fighting over Iraq's biggest oil refinery.
The turmoil has pushed the price of oil higher in recent days to levels not seen since last September.
West Texas Intermediate crude futures rose $0.385 to $106.460 per barrel, according to the ICE.
Meanwhile, the conflict in Ukraine's eastern reaches has been intensifying, with heavy fighting having been reported near the city of Artemivsk, in the Donetsk region.
Oracle, Sonic
Oracle declined after the tech company warned that fourth quarter profits and sales will be weaker than expected.
Sonic Automotive slipped after Goldman Sachs downgraded the shares to 'sell' from 'neutral'.
AbbVie edged higher after Ireland-based Shire revealed that it had rejected a £27.3bn ($46.5bn) takeover offer from the US group.
Yields on 10-year US Treasuries gained two basis points to 2.64% |
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| | Broker Tips | | Broker tips: Shire, SABMiller, Debenhams AbbVie's £27bn proposal for Shire was "barely adequate", according to Panmure Gordon, which hiked its target for the stock on Friday.
The broker said that Shire's rare diseases business is one of the "hottest assets in biopharmaceuticals".
Canaccord Genuity has upgraded beverages group SABMiller from 'hold' to 'buy', saying it sees the possibility of a possible merger with Belgian-Brazilian drinks giant Anheuser-Busch InBev (ABI).
The broker has hiked its target for SABMiller's shares from 3,000p to 3,800p, but said it sees the a 25% likelihood of a bid from ABI at 4,200p a share within the next two years.
Debenhams' third-quarter trading update was "reassuringly in line" according to Investec but that didn't stop the broker from recommending investors to 'sell' the stock on Friday.
The broker said that the stock's valuation is "not compelling enough given the structural pressures on the business". "We are unconvinced there is a quick fix and believe the investment needed to make its offer more attractive will hold back profits, though we can see a small bounce in profits [for the year ending August 2015] from lower markdowns." | | |
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