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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: Footsie drops to technical support, all eyes on Putin - Russian troops amass along Ukraine border
- UK, Italian and German data disappoints
- Ex-dividend stocks fall
- StanChart falls after results, Shire drops
techMARK 2,714.92 -0.98%
FTSE 100 6,636.16 -0.69%
FTSE 250 15,262.72 -0.58%
Fears about a possible Russian invasion of Ukraine set off another wave of selling in UK equity markets on Wednesday, with a string of disappointing data also weighing on sentiment.
The FTSE 100 finished the session 0.69% lower at 6,636.16, having slipped to a low of 6,588.43 - it has not fallen below 6,600 in intra-day trade since April 17th. The benchmark index is now at its 200-day moving average.
Reports on Tuesday evening said that Russia has significantly ramped up the number of troops on the eastern border of Ukraine in the last few days, raising fears of a potential invasion. The Kremlin has denied this. However, US Defence Secretary Jack Hagel went on the record saying that the risk of a Russian incursion is real.
The Financial Times cited senior Nato officials as saying that Russia has around 20,000 troops deployed in "battle-ready formations" on the border, more than the 15,000 US officials had estimated last week. However, official Ukrainian sources have claimed that there were up to 45,000 Russian soldiers near the border.
Economic data disappoints
Growth returned to UK industrial production in June after a slump in May but the increase was lower than expected, putting even more pressure on the services sector. The Office for National Statistics (ONS) revealed that overall industrial production rose by 0.3% month-on-month in June, after slipping 0.6% in May, though analysts had expected 0.6% growth. ONS's preliminary estimate that GDP expanded at a 0.8% pace quarter-on-quarter in the three months to June is not expected to be affected.
Italy unexpectedly dropped back into recession in the second quarter, according to the latest figures by Istat. Second quarter GDP shrank 0.2% from the prior quarter after the Italian economy shrank 0.1% in the first three months of the year.
A surprise drop in German factory orders was also on investors' minds. Orders fell 3.2% in June - the most since September 2011 - after a revised 1.6% slump in May.
Ex-div stocks provide a drag
Precious metals miner Fresnillo was the biggest riser after Credit Suisse upgraded the stock from 'underperform' to 'neutral', saying that the business should recover after a "rough patch". The bank hiked its target for the shares by 39% to 900p.
A number of heavyweight stocks traded lower on Monday after going ex-dividend, including Anglo American, Reckitt Benckiser, Reed Elsevier, BP, Barclays and Glaxosmithkline.
Standard Chartered delivered a less-than-expected 20% fall in first-half profits, but the stock slipped after the Asia-focused bank said it could face another US fine related to "certain issues" with its anti-money laundering systems and controls.
Pharmaceutical group Shire, which has agreed to a takeover by American rival Abbvie, fell sharply on reports that the US is looking to make rules over tax inversion deals stricter.
Budget carrier Easyjet managed to end the day higher after reporting a 7.7% jump in passenger numbers for June. Investors were still reeling from reports that Russia was considering a ban on European airlines flying over Siberia in response to Western sanctions, with sector peer IAG also under the weather.
Serco's shares were under pressure after Numis Securities cut its recommendation for the outsourcing group from 'hold' to 'reduce'. |
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| | FTSE 100 - Risers
Fresnillo (FRES) 985.00p +6.31%
Randgold Resources Ltd. (RRS) 5,155.00p +3.00%
Hargreaves Lansdown (HL.) 1,033.00p +2.48%
easyJet (EZJ) 1,283.00p +2.23%
Carnival (CCL) 2,135.00p +2.15%
Antofagasta (ANTO) 822.50p +1.36%
ARM Holdings (ARM) 851.50p +1.25%
Rio Tinto (RIO) 3,390.50p +1.18%
Vodafone Group (VOD) 197.90p +1.10%
BHP Billiton (BLT) 2,035.00p +1.07%
FTSE 100 - Fallers
Smith & Nephew (SN.) 1,020.00p -4.14%
Shire Plc (SHP) 4,680.00p -4.02%
AstraZeneca (AZN) 4,190.00p -3.58%
Standard Life (SL.) 358.20p -3.19%
ITV (ITV) 202.10p -2.37%
Tesco (TSCO) 245.55p -2.21%
St James's Place (STJ) 712.00p -2.13%
GlaxoSmithKline (GSK) 1,416.00p -2.04%
Sports Direct International (SPD) 647.00p -1.97%
Barclays (BARC) 217.55p -1.96%
FTSE 250 - Risers
Hochschild Mining (HOC) 162.30p +7.84%
Cairn Energy (CNE) 183.20p +6.14%
Xaar (XAR) 569.50p +5.07%
Polymetal International (POLY) 531.50p +4.73%
Interserve (IRV) 637.00p +3.92%
ITE Group (ITE) 200.00p +3.63%
Supergroup (SGP) 1,042.00p +3.07%
Drax Group (DRX) 710.00p +3.05%
Afren (AFR) 100.90p +2.85%
Tate & Lyle (TATE) 657.00p +2.02%
FTSE 250 - Fallers
Serco Group (SRP) 336.10p -4.84%
Imagination Technologies Group (IMG) 182.20p -4.66%
EnQuest (ENQ) 123.20p -4.20%
Keller Group (KLR) 844.00p -3.87%
Hays (HAS) 116.20p -3.65%
Renishaw (RSW) 1,698.00p -3.41%
Kazakhmys (KAZ) 315.00p -3.23%
Exova Group (EXO) 220.00p -3.08%
Pennon Group (PNN) 785.50p -3.02%
Just Eat (JE.) 208.50p -3.02%
FTSE TechMARK - Risers
Kofax Limited (DI) (KFX) 460.50p +4.54%
Puricore (PURI) 36.25p +2.11%
Anite (AIE) 90.50p +1.12%
NCC Group (NCC) 208.00p +1.09%
Microgen (MCGN) 124.50p +0.81%
KCOM Group (KCOM) 102.00p +0.49%
Promethean World (PRW) 28.62p +0.44%
XP Power Ltd. (DI) (XPP) 1,540.00p +0.33%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 193.11 +0.26%
FTSE TechMARK - Fallers
Sarossa (SARS) 1.73p -9.21%
Gresham Computing (GHT) 111.00p -5.13%
Torotrak (TRK) 16.75p -4.96%
Dialight (DIA) 857.50p -3.76%
Oxford Biomedica (OXB) 2.95p -3.28%
Phoenix IT Group (PNX) 90.00p -3.23%
Vectura Group (VEC) 135.50p -2.34%
Ricardo (RCDO) 606.00p -1.62%
BATM Advanced Communications Ltd. (BVC) 16.75p -1.47%
DRS Data & Research Services (DRS) 17.50p -1.41% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks drop amid Russia concerns - German factory orders fall
- Russia adds troops on Ukraine border
- Italian GDP shrinks
- Eurozone retail PMI drops
- US trade gap narrows
FTSE 100: -0.69%
DAX: -0.65%
CAC 40: -0.61%
FTSE MIB: -2.70%
IBEX 35: -1.04%
Stoxx 600: -0.87%
European stocks retreated on Wednesday amid growing concern about Ukraine and after a report showed German factory orders fell unexpectedly.
Russia's decision to boost its military presence along the border of Ukraine weighed on markets. Investors fear that Moscow will invade its neighbour to stop the Ukrainian military from fighting the pro-Russian separatists.
Also dragging stocks lower was a report from the Economy Ministry in Berlin that showed German factory orders dropped 3.2% in June from May when they fell a revised 1.6%. Economists had pencilled in a 0.9% increase.
"The factory orders report for June was consistent with our view that the economy is losing some steam in Germany," according to Barclays Research.
"The softening trend is unlikely to revert any time soon as confidence data, and in particular forward looking indicators, continue to suggest."
In Italy, second-quarter gross domestic product shrank 0.2% from the prior quarter after the Italian economy eased back 0.1% in the first three months of the year. The two consecutive quarters of declines meant the economy contracted.
Markit's purchasing managers' index (PMI) for German construction activity rose to 48.2 from 45.5 in June. However it was under the 50 level that indicates expansion.
Separately, Markit showed retail activity in July declined in Germany and the Eurozone. The PMI for the retail industry in the Eurozone fell to 47.6 from 50 in June, signalling a contraction. In Germany it declined to 52.2 in July from 56.2 a month earlier.
UK industrial production climbed 1.2% year-on-year in June following a 2.3% gain in May, missing expectations for a 1.5% increase. Manufacturing output was 1.9% higher in June, compared to a 3.7% rise in May and forecasts for a 2.1% jump.
In the US, the Commerce Department said the US trade gap narrowed to $41.5bn in June from $44.7bn in May, beating the forecast for an increase to $44.9bn.
Capital Economics said the decline was likely to result in second-quarter gross domestic product growth being revised higher from the initial estimate of 4.0% annualised to about 4.2%.
Illiad, Swiss Re
Illiad tumbled after reports that T-Mobile US plan to reject the French company's $15bn bid to buy a controlling stake. Deutsche Telekom, which owns 67% of T-Mobile, slumped.
Swiss Re retreated after posting second-quarter earnings that fell short of analysts' estimates.
Standard Chartered was lower following reports the lender has held talks with New York's banking regulator to settle claims.
Ageas gained after the Belgian insurer reed to sell its UK unit Ageas Protect to American International Group.
Hannover Re declined after the German reinsurer posted a second-quarter operating profit that missed market forecasts.
The euro fell 0.16% to $1.3354.
Brent crude futures rose 0.37% to $105 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks slide on Russia-Ukraine concerns US stocks fell amid concerns over the build-up of Russian troops on Ukraine's eastern border.
Russia's decision to bolster their military presence along the border with Ukraine looks set to have knockdown effect on the markets, with investors in the US and Europe worried about a possible invasion.
The Russian army began military exercises involving more than 100 aircraft near the border with eastern Ukraine on Monday while a further 8,000 troops were deployed over the last couple of days, adding to the 12,000 forces that were already present on the territory.
Russia's increased military presence comes a week after the US and the European Union decided to go ahead with increased economic sanctions on the country for its support of pro-Russian separatists in the regions of Donetsk and Luhansk.
Alpari UK analyst Craig Erlam said "if Russian troops cross the border, with Putin justifying the actions as an attempt to protect Russian speaking civilians, the situation could escalate quite rapidly and force Europe and the US to take a stand".
"This is the biggest fear for investors right now and explains why we're seeing more risk aversion in the markets today, following the late sell-off in the US last night," he added.
On a brighter note, the Commerce Department said the US trade gap narrowed to $41.5bn in June from $44.7bn in May, beating the forecast for an increase to $44.9bn.
Capital Economics said the decline was likely to result in second-quarter gross domestic product growth being revised higher from the initial estimate of 4.0% annualised to about 4.2%.
Time Warner slides after Fox bolts
Time Warner declined after Rupert Murdoch's 21st Century Fox withdrew its $75bn offer. Time Warner also reported earnings that beat estimates and said it plans to buy back $5bn of its shares.
Walgreen Co. slumped after the biggest US drugstore chain said it will pay about $5.29bn in cash plus $10bn in Walgreen shares for the remaining 55% stake in the UK's Alliance Boots that it doesn't already own.
Groupon retreated as the voucher company forecast third-quarter earnings that fell short of market expectations.
The US 10-year Treasury yield fell three basis points to 1.34%.
Brent crude futures rose 0.447% to $105.09 per barrel, according to the ICE. |
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| | Broker Tips | | Broker tips: Standard Chartered, Fresnillo, Meggitt, Serco Investec says Standard Chartered coped well with a difficult first half of the year and is "still probably the best bank in the world".
The broker acknowledges that 2014 "may not be a stellar year", but it expects a kick-start for revenue-led growth in the second half of the year and beyond. It kept a 'buy' rating and 1,450p target for the stock.
Credit Suisse has upgraded Fresnillo from 'underperform' to 'neutral', saying the precious metals miner should recover after a "rough patch".
The bank said that the "storm is over" now for Fresnillo, as its hiked its target for the shares from 646.91p to 900p. "After a strong investment cycle, Fresnillo is getting to the sweet spot of growth delivery, we estimate the surge of cash flows by 2016.
Investec has downgraded its rating for aerospace engineer Meggitt from 'add' to 'hold' and slashed its target from 530p to 480p "following a rough landing in the first half".
"Meggitt's disappointing first half has likely shaken investor confidence (again). A number of Meggitt's end markets have stabilised or shown signs of growth, but these have not sufficiently boosted revenues or orders," Investec said.
Serco's shares were under pressure on Wednesday after Numis Securities cut its recommendation for the outsourcing group from 'hold' to 'reduce', saying that the market was already pricing in a "significant operational turnaround" at the company after new chief executive Rupert Soames started in May.
"In our opinion, significant risks still exist to short-medium term forecasts (both operationally and from a probable rights issue) and it will take a considerable length of time to stabilise a business that has seen huge staff turnover, and very significant contract attrition, before any sort of recovery can be delivered," Numis said. | | |
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