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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 ends higher as investor sentiment improves - FTSE closes up 65.46 at 6,632.82
- Geopolitical tensions ease, sentiment improves
- UK home loans rise in June
techMARK 2,727.40 +1.23%
FTSE 100 6,632.82 +1.00%
FTSE 250 15,460.73 +1.43%
UK stocks registered a decent gain on Monday as investors took advantage of the bargains to be had following last week's declines and grew in confidence as geopolitical tensions eased somewhat.
After making a fairly steady climb throughout the day, the FTSE 100 ultimately closed 65.46 points higher at 6,632.82.
Capital Spreads dealer, William Nicholls, said: "The world's stock markets have started trading this week on much firmer footing following a dire start to August. The relief rally from Friday seems to be holding for now as various geo-political tensions come off the boil somewhat.
"A three day cease-fire in Israel and an end to Russia's Braveheart-style 'Ukraine baiting' on the edge of its border has put an end to the selling. It seems investors have decided that enough is enough and the risk-on button has been pressed."
A 72-hour ceasefire in Gaza, the end of Russian military exercises near eastern Ukraine and the news that US air strikes have aided Kurdish forces in northern Iraq have have together helped to rebuild confidence over the weekend.
In the latest geopolitical developments, Iraq's president on Monday asked Haider al-Abadi, the Shi'ite coalition's nominee for prime minister, to form a government.
The US has conducted three separate air strikes in the northern region of the country and, alongside Turkey and Britain, have also provided food and water supplies to more than 40,000 members of the Yazidi religious minority who are under the threat of Islamic State, formerly known as Isis, militants.
UK home loans rise in June despite mortgage crackdown
Back in Britain, data revealed that mortgage loans rose in June, defying expectations of a slowdown following a clampdown on irresponsible lending.
Total gross lending in June grew by 6% against May to £17.9bn and by a fifth against a year ago, according to Bank of England figures cited by the Council of Mortgage Lenders (CML).
It comes despite measures to ensure home-buyers can repay loans, such as the Mortgage Market Review, which obliged lenders to take more account of borrowers' ability to pay.
In other macro news, UK wage growth is expected to remain weak in the next three months, the Chartered Institute of Personnel and Development (CIPD) said.
Only 2% of employers saw their starting salaries rise in the last 12 months, against 2.5% in 2013, according to the quarterly survey of 1,026 employers and recruitment professionals.
The proportion of employers who expect basic pay to increase at their organisation has fallen to 42% from 48% in the last quarter.
Miners drive FTSE higher
The mining sector performed well with heavyweights such as Rio Tinto, Glencore and Anglo American making gains. Rio was supported by comments from Canaccord Genuity, which repeated its 'buy' rating on the back of the miner's strong free cash flows in the first half.
Airlines Easyjet and IAG also rose strongly.
Meanwhile, Deutsche Bank lowered its recommendation for Friends Life Group from 'buy' to 'hold', saying it sees worse-than-expected underlying trends at the life assurance firm.
Royal Bank of Scotland was down on reports it is set to sell the international branch of Coutts, its private bank, in a deal thought to be valued at around $1bn (£600m). RBS's decision will see Coutts split into two separate businesses, with one to be based in Britain and one to be based in Zurich, from where it'll manage operations in Dubai, Abu Dhabi, Singapore and Hong Kong.
Standard Chartered declined after Nomura reduced its target from 1,580p to 1,480p, maintaining a 'buy' recommendation.
On the second tier, chemicals group Synthomer cheered investors with a 25% jump in the interim dividend, which came despite a drop in half-year sales amid challenging market conditions. The company also said it anticipated delivering underlying full-year profit in line with last year's figure of £90.1m.
At the other end, Drax extended losses made last week which came after losing its appeal over its eligibility for a government contract. UBS said on Monday that the news "has reduced the potential valuation upside for Drax" as it downgraded the stock from 'buy' to 'neutral', while reducing its target from 800p to 680p. |
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FTSE 100 - Risers
Persimmon (PSN) 1,272.00p +4.52%
International Consolidated Airlines Group SA (CDI) (IAG) 331.20p +4.45%
Ashtead Group (AHT) 906.50p +4.26%
Schroders (SDR) 2,295.00p +3.71%
Rio Tinto (RIO) 3,502.00p +3.61%
Anglo American (AAL) 1,602.50p +3.32%
Shire Plc (SHP) 4,764.00p +3.14%
Petrofac Ltd. (PFC) 1,109.00p +3.07%
Johnson Matthey (JMAT) 3,000.00p +2.85%
G4S (GFS) 260.90p +2.68%
FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 339.60p -1.74%
Morrison (Wm) Supermarkets (MRW) 166.80p -1.65%
Friends Life Group Limited (FLG) 315.00p -1.35%
Randgold Resources Ltd. (RRS) 5,075.00p -0.68%
RSA Insurance Group (RSA) 425.60p -0.61%
Legal & General Group (LGEN) 237.00p -0.34%
Meggitt (MGGT) 471.00p -0.28%
Hargreaves Lansdown (HL.) 1,081.00p -0.28%
Tesco (TSCO) 246.30p -0.28%
HSBC Holdings (HSBA) 625.90p -0.26%
FTSE 250 - Risers
Synthomer (SYNT) 225.20p +8.32%
Ferrexpo (FXPO) 136.30p +5.91%
IP Group (IPO) 187.80p +5.80%
Enterprise Inns (ETI) 120.00p +5.26%
BTG (BTG) 608.00p +4.65%
Just Eat (JE.) 219.50p +4.57%
Michael Page International (MPI) 451.90p +4.12%
Ocado Group (OCDO) 343.00p +3.97%
Regus (RGU) 180.00p +3.69%
Amec (AMEC) 1,108.00p +3.65%
FTSE 250 - Fallers
Euromoney Institutional Investor (ERM) 1,055.00p -3.03%
Drax Group (DRX) 639.50p -1.77%
Foxtons Group (FOXT) 259.10p -1.48%
COLT Group SA (COLT) 135.00p -1.39%
Countrywide (CWD) 509.00p -1.17%
St. Modwen Properties (SMP) 372.60p -0.90%
Supergroup (SGP) 1,014.00p -0.88%
NMC Health (NMC) 471.00p -0.84%
Stock Spirits Group (STCK) 296.50p -0.77%
Renishaw (RSW) 1,669.00p -0.65% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rise as geopolitical crises moderate - Russia ends military drill
- Hamas and Israel begin ceasefire
- New Iraqi PM nominated
FTSE 100: 1.00%
DAX: 1.90%
CAC 40: 1.20%
FTSE MIB: 1.39%
IBEX 35: 0.88%
Stoxx 600: 1.37%
European stocks rallied as concerns over geopolitical crises moderated.
Russia's Defence Ministry has ended its military exercises near Ukraine's border, Interfax reported last Friday, in a boost to markets. The exercises were held at the Ashuluk firing range in the Astrakhan region.
However, NATO said on Monday there was a "high probability" that Russia could launch an invasion of Ukraine. The government said Russian troops have been closing in on Donetsk, the main city held by pro-Russian rebels.
Meanwhile, providing a lift to markets was news that militants in Gaza have agreed to an Egyptian-brokered 72-hour ceasefire which started on Sunday.
In Iraq, President Fuad Masum formally nominated a candidate on Monday to replace Prime Minister Nuri Kamal al-Maliki. Haider al-Abadi, a member of Maliki's Shia Islamist Dawa party, was nominated to take over as prime minister.
The nomination came after US conducted air strikes in the northern region of Iraq and, alongside Turkey and Britain, provided food and water supplies to more than 40,000 members of the Yazidi religious minority who are under the threat of Islamic State, formerly known as Isis, militants.
DKSH, Balfour Beatty
DKSH Holding gained after the financial advisor reported first half net income that exceeded analysts' estimates.
Balfour Beatty jumped after rejecting a revised merger proposal from Carillion.
Bilfinger edged up after the German builder said cost cutting measures will have a positive effect on second-half results.
Banco Popolare was a high riser after the Italian lender unexpectedly posted a profit in the second quarter.
Drax Group slumped after UBS lowered its recommendation on the utility to 'neutral' from 'buy'.
The euro fell 0.18% to $1.3386.
Brent crude futures rose 0.86% to $105.11 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks rise as global tensions ease US stocks opened higher as geopolitical tensions eased and as Federal Reserve vice chairman Stanley Fischer delivered dovish remarks.
Soothing global concerns was news that Russia had concluded its military exercises near Ukraine's border and that Israel and militants in the Gaza Strip had agreed to an Egyptian-brokered ceasefire.
In other geopolitical developments, Iraq's president on Monday asked Haider al-Abadi, the Shi'ite coalition's nominee for prime minister, to form a government.
The US have conducted three separate air strikes in the northern region of the country and, alongside Turkey and Britain, have also provided food and water supplies to more than 40,000 members of the Yazidi religious minority who are under the threat of Islamic State, formerly known as Isis, militants.
Remarks from Fischer were also supporting stocks after he suggested that monetary stimulus may still be needed to bolster the recovery.
He said that the US and wider global economic recoveries since the financial crisis have been "disappointing".
He said that while this may partly represent temporary factors, "it is also possible that the underperformance reflects a more structural, longer-term shift in the global economy".
In corporate news, deals website Priceline shares dropped after the firm said third-quarter adjusted earnings per share would be $19.60-21.10, below the $21.28 consensus estimate.
US buyout firm TPG Capital has offered A$3.4bn for the world's second-biggest listed winemaker Treasury Wine Estates, based in Australia.
The 10-year Treasury yield rose one basis point to 2.43%.
West Texas Intermediate crude futures climbed 0.68% to $98.32 per barrel on the NYMEX. |
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| | Broker Tips | | Broker tips: Friends Life Group, Rio Tinto, Drax Deutsche Bank has lowered its recommendation for Friends Life Group (FLG) from 'buy' to 'hold', saying it sees worse-than-expected underlying trends at the life assurance firm.
The bank said that its previous 'buy' call had been due to "four main planks", two of which now appear weaker than originally assumed. "While overall cash flow is undoubtedly recovering, progress is nonetheless slower than we had hoped [...]. Separately, the benefits of any future share buy-backs have reduced as the share price has lifted."
Canaccord Genuity has repeated its 'buy' rating for Rio Tinto on the back of the miner's strong free cash flows in the first half.
"After a period regaining control over its cash flows, RIO, like many large mining names is now moving towards the happy position of having surplus cash. This is over and above its reduced growth ambitions and need to cut its net debt position."
The risk/reward balance at Drax has lost its attractions, according to UBS, which downgraded the stock from 'buy' to 'neutral' on Monday, causing shares in the power plant group to fall.
Last week, the government won an appeal against granting Drax a subsidy to convert its second unit of its coal-fired power station to burn biomass. UBS said the news "has reduced the potential valuation upside for Drax". | | |
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