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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 weighed by data, supermarkets and miners - FTSE drops 27.80 points to 6,836.30
- China, Eurozone UK construction in focus
- Supermarkets hit by Kantar data
techMARK 2,814.04 -0.30%
FTSE 100 6,836.30 -0.41%
FTSE 250 15,971.89 -0.70%
A slowdown in UK construction, concerns about growth amongst the Big Four, and Chinese data all contributed to a negative performance by UK stocks.
The FTSE 100 ended today's session 27.80 points lower at 6,836.30.
Brenda Kelly, Chief Market Strategist at IG, said: "Yet again miners are driving the FTSE 100, after weaker manufacturing PMI figures from China dispelled the cautiously optimistic atmosphere that prevailed yesterday.
"Construction data showed that the previously radiant assessment of the UK economy was not entirely accurate, adding to the more negative tone to the session, and home builders came under pressure as a result. Supermarkets moved in lockstep after data showed that the major supermarkets continue to suffer from the presence of budget rivals, with Tesco's situation becoming even bleaker as its market share fell by 1.5%."
The supermarket is due to publish what is expected to be its worst set of first quarter results in 20 years, with predictions of a 4% decline, compared to a 2.9% decline in the previous quarter. Kantar Worldpanel revealed today that the company's sales fell 3.1% year-on-year over the past 12 weeks, giving it a market share of 29%, down from 30.5%.
UK construction expansion slows in May
UK construction activity expanded again in May, but at its slowest pace since last October.
The seasonally adjusted UK construction purchasing managers' index from Markit and the Chartered Institute of Purchasing & Supply fell to 60 in May from 60.8 in April. That was still above the 50 threshold indicating growth for the 13th month in a row.
In other UK news, house prices rose for the 13th month in a row in May, contradicting signs that the market is slowing down.
Prices rose 0.7% in May against April and were up 11.1% over the same month a year ago - up from 10.9% the previous month, according to the monthly house price index from Nationwide Building Society. Experts said prices had hit a record, surpassing the previous high in October 2007.
Eurozone inflation below expectations
European stocks slumped as Eurozone inflation slowed more than forecast in May.
Consumer prices in the euro-area fell to 0.5% last month from 0.7% in April, according to the European Union's statistics office in Luxembourg today. Economists had predicted a decline to 0.6%.
Also in the Eurozone, the unemployment rate unexpectedly fell to 11.7% in April from 11.8% a month earlier. Analysts had predicted the rate would remain unchanged.
Wolseley leads gains, but supermarket and miners slide
Giving his assessment of the situation on the top tier, Jasper Lawler, Market Analyst at CMC Markets UK, said: "Utilities and Basic materials were a drag on the FTSE with National Grid and Anglo American both down over 2%. Oil and Gas were the best of a bad bunch with Royal Dutch Shell in the green."
Currency movements put a dampener on third-quarter results at heating and plumbing products group Wolseley, but strong growth in the US and Nordic regions drove an acceleration in like-for-like sales to 5.1%, helping shares to rise strongly throughout today's session.
Packaging and paper company Mondi Group climbed on the news it is set to acquire Graphic Packaging International's US bags and kraft paper business for $105m. The business's production base comprises an integrated kraft paper mill located in Arkansas, with production capacity of 135,000 tonnes a year, and nine bags plants across the States.
Anglo American was firmly in the red after Goldman Sachs reiterated its 'sell' rating and cut its target from 1,240p to 1,180p.
Both Melrose Industries and William Hill were lower on the back of expectations they will both be demoted to the second tier index at tomorrow's quarterly review. |
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| | FTSE 100 - Risers
Wolseley (WOS) 3,363.00p +1.60%
easyJet (EZJ) 1,580.00p +1.35%
Royal Dutch Shell 'B' (RDSB) 2,470.00p +0.88%
Meggitt (MGGT) 493.50p +0.65%
Capita (CPI) 1,115.00p +0.63%
Royal Dutch Shell 'A' (RDSA) 2,370.50p +0.59%
SABMiller (SAB) 3,293.50p +0.55%
Rexam (REX) 545.50p +0.55%
Diageo (DGE) 1,916.50p +0.50%
Unilever (ULVR) 2,692.00p +0.49%
FTSE 100 - Fallers
Coca-Cola HBC AG (CDI) (CCH) 1,380.00p -2.68%
Anglo American (AAL) 1,458.00p -2.25%
Morrison (Wm) Supermarkets (MRW) 194.40p -2.11%
William Hill (WMH) 350.30p -2.10%
National Grid (NG.) 877.50p -2.06%
Fresnillo (FRES) 785.50p -2.06%
Sports Direct International (SPD) 771.00p -1.91%
Barratt Developments (BDEV) 355.20p -1.77%
Royal Mail (RMG) 517.00p -1.71%
Melrose Industries (MRO) 275.30p -1.64%
FTSE 250 - Risers
Tullett Prebon (TLPR) 304.00p +4.76%
CSR (CSR) 619.50p +4.12%
Cairn Energy (CNE) 206.90p +2.94%
Hellermanntyton Group (HTY) 316.50p +2.26%
Synergy Health (SYR) 1,317.00p +1.94%
UDG Healthcare Public Limited Company (UDG) 352.00p +1.85%
Vedanta Resources (VED) 1,123.00p +1.72%
Centamin (DI) (CEY) 62.85p +1.37%
Halma (HLMA) 602.00p +1.35%
Senior (SNR) 293.70p +1.31%
FTSE 250 - Fallers
Foxtons Group (FOXT) 307.90p -6.64%
AL Noor Hospitals Group (ANH) 1,006.00p -4.01%
Euromoney Institutional Investor (ERM) 1,154.00p -3.91%
Rightmove (RMV) 2,211.00p -3.53%
Ophir Energy (OPHR) 259.50p -3.28%
Thomas Cook Group (TCG) 159.50p -3.22%
Greencore Group (GNC) 287.30p -3.14%
Pennon Group (PNN) 760.00p -3.00%
Imagination Technologies Group (IMG) 226.70p -2.95%
Interserve (IRV) 629.50p -2.93% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks decline as Eurozone inflation falls - Eurozone inflation slows
- Euro-area jobless rate falls
- Chinese manufacturing rises
- US factory orders increase
FTSE 100: -0.41%
DAX: -0.31%
C AC 40: -0.27%
FTSE MIB: -0.64%
IBEX 35: -0.47%
Stoxx 600: -0.46%
European stocks were in the red as Eurozone inflation slowed, adding pressure on the European Central Bank (ECB) ahead of its Thursday meeting.
Consumer prices in the euro-area fell to 0.5% last month from 0.7% in April, according to the European Union's statistics office in Luxembourg today. Economists had predicted a decline to 0.6%.
The ECB is expected to loosen monetary policy to address weak inflation at its meeting this week. The central bank is targeting inflation of just under 2%.
Also in the Eurozone, the unemployment rate unexpectedly fell to 11.7% in April from 11.8% a month earlier. Analysts had forecast the rate to remain unchanged.
"May's fall in Eurozone inflation and the still high level of unemployment in April will add to the pressure on the ECB to provide more policy support in order to address the growing risks of deflation in the single currency area," Capital Economics said.
In China the purchasing managers' index (PMI) from HSBC Holdings Plc and Markit Economics climbed to 49.4 in May from 48.1 in April. It missed the 49.7 forecast and was under the 50 level that signals expansion.
In the US, factory orders rose by 0.7% in April following a 1.5% increase in March, beating analysts' expectations for a 0.5% gain.
Pennon Group
Pennon Group declined after reported a 20% fall in annual pre-ta profit at its Viridor waste management unit.
Eutelsat Communications dropped as Abertis Infraestructuras SA sold its holding in the French satellite operator.
Wolseley advanced after posting higher sales on improved demand in the US and Nordic region.
Foxtons Group slipped after announcing Chief Executive Michael Brown will quit the UK real estate company for personal reasons less than a year after its initial public offering.
The euro rose 0.21% to $1.3625.
Brent crude futures fell $0.138 to $108.680 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks slide as factory orders slow US stocks declined as factory orders in the world’s biggest economy slowed and Eurozone inflation eased.
US factory orders rose by 0.7% in April following a 1.5% increase in March, beating analysts' expectations for a 0.5% gain.
In the euro-area, inflation fell to 0.5% last month from 0.7% in April, according to the European Union’s statistics office in Luxembourg today. Economists had predicted a decline to 0.6%.
The data adds pressure on the European Central Bank to address weak inflation ahead of its Thursday meeting. The ECB is projected to ease policy to bring prices up to its target of just under 2%.
Meanwhile, in China, the purchasing managers’ index from HSBC Holdings and Markit Economics climbed to 49.4 in May from 48.1 in April. However, it missed the 49.7 forecast and was under the 50 level that signals expansion.
Later on Federal Reserve official Esther George is also due to speak on the US economy.
Krispy Kreme slides
Krispy Kreme Doughnuts slumped after cutting its earnings forecast due to rising costs and slow first-quarter sales.
Quiksilver declined after the surfwear retailer posted a wider loss than analysts had estimated
Hillshire Brands advanced after confirming that Pilgrim’s Pride Corp. has increased its bid for the food producer.
The US 10-year yield rose three basis points to 2.56%.
West Texas Intermediate crude futures rose $0.088 to $102.560 per barrel, according to the ICE. |
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| | Broker Tips | | Broker tips: Shire, Foxtons, Tate & Lyle, Bowleven UBS has hiked its target for Shire by nearly a tenth, saying that the rumoured acquisition of Nasdaq-listed NPS Pharmaceuticals would "make sense" for the Dublin-based biopharmaceutical group. The bank kept a 'neutral' stance on the shares, but lifted its target from 3,150p to 3,450p.
UBS said that a potential takeover would focus on rare diseases, an area where Shire is aiming to build its position. NPS's expertise in gastro-intestinal disease also fits well with Shire, it said. Meanwhile, NPS has mostly de-risked its main pipeline with one drug already approved and another one filed with US regulators.
Credit Suisse has maintained an 'outperform' rating for estate agent chain Foxtons, saying that the exit of Chief Executive Officer Michael Brown does not change its positive view on the stock.
Foxtons plans to replace Brown with Chief Operating Officer Nic Budden from July 1st. "Budden has been central in designing and executing the company's successful roll-out strategy and Mr. Brown will remain on the board as a non-executive director," the bank said.
In spite of a tough year ahead of Tate & Lyle, JPMorgan Cazenove has reiterated its 'overweight' recommendation for the sugar and sweeteners manufacturer, saying that the business is "focused, fixed and ready for growth".
"While [this year] is likely to be another tough year, we believe Tate's ingredients business has a stronger product pipeline, deeper customer relationships and better infrastructure. This should drive high-quality, sustainable profit growth and group earnings per share growth from [next year]," JPMorgan said.
Westhouse Securities has maintained its 'buy' recommendation for Africa-focused oil and gas group Bowleven after the company achieved a "key hurdle" in progressing its Etinde gas and condensate project offshore Cameroon.
"We think that this is the first key step that will trigger a significant de-risking of the Etinde project," according to Westhouse analysts Mark Henderson and Jamal Orazbayeva. | | |
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