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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 open: Housing stocks weigh as rate-hike expectations increase - Housing, property stocks provide a drag
- Carney warns of impending interest rate hike
- Osborne moves to cool housing market
- Oil prices spike on Iraq concerns
techMARK 2,830.21 -0.58%
FTSE 100 6,817.00 -0.38%
FTSE 250 15,984.76 -0.88%
Weakness in the housing sector dragged UK stocks lower on Friday morning as investors gave a cautious reaction to comments from British policymakers overnight.
The FTSE 100 was trading 0.4% lower at 6,817 early on.
During the Mansion House speeches on Thursday evening, Bank of England (BoE) Governor Mark Carney warned that the first hike in interest rates may come sooner than markets expect, saying that the central bank could tighten policy in as soon as six months.
Rob Wood, Chief UK Economist at Berenberg, said that Carney delivered a "significant" but "sensible" change in tone on interest rates. He now expects the first hike to come in November 2014, compared with analysts' previous expectation of an rate increase in the second quarter of 2015.
Meanwhile, Chancellor George Osborne moved to quell fears of rampant house-price inflation by giving the BoE powers to cap risky mortgage lending. He also announced a £5m fund to promote the development of brownfield sites.
Concerns over a spike in oil prices due to the recent flare-up of tensions in Iraq were also weighing on sentiment this morning. Brent crude jumped to a three-month high yesterday while West Texas futures soared to a nine-month high after Islamist militants seized control of major towns and cities and threatened to move on Baghdad.
"This has the potential to seriously disrupt the supply of oil from, what is, a major oil producing country, and therefore it is hardly surprising that we've seen such a significant reaction in the markets," said Craig Erlam, Market Analyst at Alpari UK.
Housing, real estate stocks slip
Housebuilders Barratt Developments, Persimmon, Bovis Homes and Bellway were all trading with heavy losses this morning as investors reacted to the prospect of higher interest rates and a potential cooling of the UK housing market.
Property firms such as Land Securities and British Land were also out of favour.
Oil and gas stocks were tracking the recent surge in crude prices this morning with Tullow, Shell, BG Group and BP putting in decent gains.
Tullow announced today that it has increased the size of its loan facility for exploration in Norway, which now provides pre-funding for around 75% of investment in the region.
FTSE 250-listed miner Petra Diamonds surged after recovering an "exceptional" 122.52-carat blue diamond at its Cullinan mine in South Africa. "The rarity of a blue diamond of this magnitude sets it apart as a truly significant find," the company said in a statement. |
| FTSE 100 - Risers
SSE (SSE) 1,578.00p +1.22%
Fresnillo (FRES) 807.50p +1.19%
Tullow Oil (TLW) 851.50p +1.13%
BP (BP.) 513.10p +0.94%
BG Group (BG.) 1,276.00p +0.87%
Severn Trent (SVT) 1,987.00p +0.71%
Royal Dutch Shell 'B' (RDSB) 2,500.50p +0.68%
Royal Bank of Scotland Group (RBS) 342.60p +0.68%
Royal Dutch Shell 'A' (RDSA) 2,388.00p +0.65%
United Utilities Group (UU.) 892.00p +0.62%
FTSE 100 - Fallers
easyJet (EZJ) 1,449.00p -3.46%
Barratt Developments (BDEV) 357.70p -3.22%
International Consolidated Airlines Group SA (CDI) (IAG) 378.70p -3.20%
Persimmon (PSN) 1,264.00p -2.92%
Land Securities Group (LAND) 1,044.00p -2.88%
British Land Co (BLND) 697.00p -2.79%
Ashtead Group (AHT) 899.50p -2.02%
Shire Plc (SHP) 3,499.00p -1.85%
Hammerson (HMSO) 587.50p -1.76%
Kingfisher (KGF) 378.00p -1.61%
FTSE 250 - Risers
Petra Diamonds Ltd.(DI) (PDL) 178.40p +6.76%
Direct Line Insurance Group (DLG) 267.20p +1.02%
Spectris (SXS) 2,397.00p +0.97%
African Barrick Gold (ABG) 219.00p +0.88%
KCOM Group (KCOM) 94.85p +0.85%
Cairn Energy (CNE) 203.00p +0.74%
Afren (AFR) 142.70p +0.71%
Vesuvius (VSVS) 459.60p +0.68%
Rathbone Brothers (RAT) 2,071.00p +0.58%
Polymetal International (POLY) 540.50p +0.56%
FTSE 250 - Fallers
Bovis Homes Group (BVS) 761.50p -3.61%
Berkeley Group Holdings (The) (BKG) 2,299.00p -3.57%
Crest Nicholson Holdings (CRST) 332.40p -3.48%
Bellway (BWY) 1,474.00p -3.41%
Countrywide (CWD) 543.00p -3.38%
IP Group (IPO) 181.10p -3.16%
Henderson Group (HGG) 242.70p -3.04%
Thomas Cook Group (TCG) 145.70p -2.67%
Pace (PIC) 354.30p -2.66% |
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QUARTERLY PAYMENT DATE
Carnival, Duet Real Estate Finance Ltd, Energy XXI (Bermuda) (DI), M Winkworth, Utilico Investments Ltd (DI)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Fixed Asset Investment (China)
Retail Sales (China)
Industrial production (China)
Balance of Trade (EU) (10:00)
Consumer Price Index (GER) (07:00)
Producer Price Index (US) (13:30)
U. of Michigan Confidence (Prelim) (US) (14:55)
Bank of Japan Monetary Policy Meeting ends
FINALS
Bonmarche Holdings, Ensor Holdings
ANNUAL REPORT
BTG
SPECIAL DIVIDEND PAYMENT DATE
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AGMS
Duet Real Estate Finance Ltd, OJSC Phosagro GDR (Regs), Soco International, TLA Worldwide
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FINAL DIVIDEND PAYMENT DATE
Augean, Carillion, Chime Communications, Derwent London, Fidessa Group, G4S, Keller Group, Konami Corp., PPHE Hotel Group Ltd, Robert Walters, Tandem Group
FINAL EX-DIVIDEND DATE
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks slide after economic data, Iraq unrest - Chinese industrial output rises
- Chinese retail sales grow
- German inflation in line with forecast
- Iraq turmoil pushes oil prices higher
FTSE 100: -0.51%
DAX:-0.58%
CAC 40: -0.51%
FTSE MIB: -0.50%
IBEX 35: -0.59%
Stoxx 600: -0.33%
European stocks declined as investors weighed economic data out of China and German and as the Iraq unrest escalated.
A report showed Chinese industrial production rose 8.8% year-on-year in May, as expected by analysts, following an 8.7% gain a month earlier.
A separate report on Chinese retail sales showed a 12.5% jump, beating forecasts for a 12.1% increase and the previous month's 11.9% rise.
The data follows the government's introduction of policy measures to revive the
Chinese economy amid a slowdown.
"Today's output and spending data from China suggest that policymakers are being reasonably successful so far at fine-tuning policy in order to stabilise growth," said Capital Economics. "We suspect that downward pressures from the property sector may intensify but, for now, there is no pressing need for significant policy loosening."
In Germany, inflation rose by 0.6% year-on-year increase in May, in line with estimates. The figures come amid concerns over weak prices in the Eurozone. The European Central Bank last week introduced new measures to stabilise prices.
In the US later on, the focus will turn to the release of the University of Michigan's preliminary estimate of the consumer confidence index in June, which is tipped to climb to 83 from 81.9 the prior month.
Federal Reserve policymakers are monitoring economic data to gauge the health of the US economy in weighing whether to continue scaling back bond purchases.
Oil stocks rise amid Iraq turmoil
A gauge of European oil companies advanced as oil prices jumped in the wake of the unrest in Iraq.
US President Barack Obama said he won't rule out using air strikes to help the government in Baghdad as a group of rebels, called the Islamic State in Iraq and the Levant (ISIL), vowed to take over the city.
Brent crude futures jumped $1.370 to $114.590 per barrel, according to the ICE.
Gulf Keystone Petroleum gained after saying production at its Shaikan operation in the Kurdistan region of Iraq is stable and plans to increase output capacity are on track.
Genel Energy, which also owns stakes in oil and natural gas assets in the Kurdistan region, rallied.
R. Stahl edged higher as Weidmueller raised its offer for the company to 50 euros per share from a bid of 47.50 euros per share in April.
The euro rose 0.13% to $1.3570. |
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| | US Market Report | | US Close: Stocks slide after US data misses forecasts - Iraq unrest pushes up oil prices
- US retail sales ease back
- US initial jobless claims rise
DJIA: -0.65%
NASDAQ: -0.79%
S&P 500: -0.71%
US stocks declined as reports on retail sales and jobless claims missed estimates and as the turmoil in Iraq pushed oil prices higher.
Advance retail sales in the US rose 0.3% in May following a revised 0.5% increase in April, below the 0.6% gain expected by analysts.
"The disappointing 0.3% rise in US retail sales values in May (consensus +0.6%) implies that some of the weakness in the first quarter has continued into the second," said Capital Economics.
"That said, with payrolls now rising by more than 200,000 a month, this is unlikely to last."
Initial jobless claims came in at 317,000 in the week to June 7th, more than the 312,000 the previous week and the 309,000 forecast.
Alpari UK Analyst Craig Erlam said weekly jobless claims have become a "reliable source of good news for the US recently, having consistently hovered around the 300,000 level".
"This suggests that aside from seeing fewer job cuts, we're also seeing job creation pick up to the point that people are able to move from one job to another without having to sign on," Erlam said.
"This is an encouraging sign that the labour market is getting back to good health, although clearly, it's not quite there yet."
The Federal Reserve has been monitoring the labour market closely to gauge the health of the economy in determining whether to continue scaling back bond purchases.
Meanwhile, investors are also watching Iraq as the unrest boosted oil prices up with West Texas Intermediate crude futures rising $2.311 to $106.870 per barrel at 21:44 BST.
President Barack Obama said Iraq is going to need more assistance from the US and the international community as a group of rebels gained control of Mosul, Iraq's second-largest city.
The Islamic State in Iraq and Syria, or ISIS, is threatening the takeover of more cities, including the capital, Baghdad.
Lululemon, Amazon
Lululemon Athletica retreated as the athletics-apparel retailer lowered its full-year forecast.
Amazon slumped on reports its music service has run into hurdles landing a deal with Universal Music Group.
Keurig Green Mountain gained after saying it is "committed" to returning more cash to investors.
Restoration Hardware Holdings climbed as the home-furnishings chain lifted its forecast for full-year profit.
The US 10-year yield fell four basis points to 2.60%. |
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| | Newspaper Round Up | | Friday newspaper round-up: Oil prices, Mortgage lending, SSE... Oil prices surged to a three-year high after insurgents took control of Iraq's second city and threatened to advance on Baghdad amid fears that the escalating conflict would disrupt oil exports. The price of Brent crude in London jumped $2 to hit $112 a barrel at one point yesterday, a level last seen at the outbreak of the Arab Spring in 2011. Christopher Bellew, a trader at Jefferies Bache, the brokerage, said: "If this conflict knocked out Iraq as an exporter, that would have a significant impact on prices." - The Times
The Bank of England will be given legal powers to rein-in mortgage lending and councils will be forced to release brownfield sites for building after the Chancellor warned that Britain's housing market poses a threat to financial stability. George Osborne used his annual Mansion House speech to bow to international concerns about a housing bubble. Although he insisted that there was "no immediate cause for alarm" and repeated that his flagship Help to Buy scheme will not be shut down, the Chancellor conceded that roaring house prices could destabilise the economy in the future. - The Telegraph
Alistair Phillips-Davies, chief executive of energy group SSE, saw his pay and pension package increase by two-thirds to £2.7m last year, according to the company's annual report. The leap came as new statistics from the Department of Energy and Climate Change showed more than two million households – 10% of all households – were living in fuel poverty. - The Guradian
Discount retailer B&M yesterday proved there is still an appetite for flotations on the London Stock Exchange as its first day of trading saw the company's value grow to almost £3 billion. The Liverpool-based chain, set up in 1978 and now among the UK's biggest retailers with 373 stores and 16,000 staff, saw its shares rise in conditional dealings from an opening price of 270p to more than 290p at one stage. The initial puplic offering valued the chain at £2.7bn, and delivered a £1bn windfall for its backers. - The Scotsman
Electric car maker Tesla Motors is handing over the keys to its technology in an effort to encourage other automakers to expand beyond gasoline-burning vehicles, Elon Musk, Tesla's CEO, promised on Thursday to give away the company's entire patent portfolio to all comers, as long as they promised not to engage courtroom battles over intellectual property. - The Guardian
Price comparison websites may seem like the perfect way to shop around for an insurance policy – providing an unbiased breakdown of all the best deals. But the websites – which allow customers to compare a range of different quotes – were exposed as a sham yesterday, as many prices offered for motor insurance are being unfairly restricted by secret agreements. Industry watchdogs claim some comparison websites make deals with insurers to get an exclusive price, making their website the cheapest for a certain product. - The Daily Mail | | |
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