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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: Company results please, but analysts cautious - Markets trim losses to finish almost flat
- Geopolitics in focus with aid on its way to Ukraine
- German ZEW survey disappoints
- Prudential, Just Eat, Ladbrokes and Serco rise after results
techMARK 2,728.24 +0.03%
FTSE 100 6,632.42 -0.01%
FTSE 250 15,465.81 +0.03%
UK stocks had practically clawed back all of their losses come the end of trading on Tuesday as investors continued to watch geopolitical developments across the globe.
To take note of, some analysts, such as Kathleen Brooks, Research Director at Forex.com, believe recent weakness in the price of oil might be hinting at a softer economic outlook than has been evident as of yet in official economic statistics.
Even so, well-received results from the likes of Prudential, Just Eat, Serco and Ladbrokes and a decent performance from travel stocks limited the downside in London.
The FTSE 100 was down just 0.01% at 6,632 by the close, having touched a low of 6,617.31 early on.
The index advanced 1% on Monday on the back of improved news-flow from Iraq, Gaza and Ukraine. In particular, investors welcomed the news of Russia stopping military exercises near the eastern border of Ukraine over the weekend.
Ukraine and Russia are now said to have agreed on a Red Cross-led humanitarian aid mission in Luhansk, where thousands of people are without access to water, power and medical help. However, there were conflicting reports that said the Red Cross was still waiting for information about the contents of a Russian convoy before agreeing to a mission. Meanwhile, with Ukrainian officials claiming that up to 45,000 Russian troops remain close to the frontier, tensions between the neighbouring nations are still high with developments having the potential to spark volatile moves on financial markets.
Elsewhere, Iraq plunged deeper into political crisis late on Monday, as embattled Prime Minister Nouri al-Maliki refused to step aside to allow his successor, Haida al-Abadi, to form a new government.
In economic data on Tuesday, German investor confidence declined significantly in August due to geopolitical tensions, the German ZEW survey said. The economic sentiment for Germany dropped to a worse-than-expected 8.6 in August from 27.1 in July. It marked the eighth consecutive decrease and reached its lowest level since December 2012.
Prudential leads gains
Insurer Prudential impressed the market on Tuesday after the insurer's US and Asia businesses helped to boost first-half group operating profits by 17% to £1.52bn despite a drop in UK annuity sales sparked by government pension changes.
FTSE 250 online takeaway marketplace Just Eat said profits trebled in the first half of 2014 on the back of strong demand and accelerating growth in mobile. The company said pre-tax profit was up 200% at £6m on revenues that jumped by 58% to £69.8m, causing shares to surge in morning trade.
High street bookie Ladbrokes was a high riser after saying it delivered on its key operational objectives in the first six months of 2014, as a good World Cup performance pushed revenues higher 4% to £589.3m. However, profits fell by nearly 50% as a result of "industry-wide customer-friendly results".
Support services group Serco was also making gains despite reporting "poor" first-half trading and predicted challenges ahead. Investors, however, welcomed the news that it had reduced net debt and appointed a new finance chief.
RSA Insurance was also in demand after Credit Suisse upgraded the stock from 'underperform' to 'neutral', saying that the stock's valuation is not demanding. African Barrick Gold was also higher after Investec upgraded the stock from 'sell' to 'hold'.
In contrast, financial services group Hargreaves Lansdown slumped after UBS initiated coverage of the stock with a 'sell' rating, saying that the "risk-reward [is] significantly skewed to the downside".
Royal Dutch Shell was lower, as was the wider oil sector as it tracked the price of crude lower.
Travel and leisure stocks were on the rise, with Easyjet, IAG, TUI Travel and Carnival performing well. |
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| | FTSE 100 - Risers
Sports Direct International (SPD) 682.50p +3.10%
Prudential (PRU) 1,368.50p +2.20%
Associated British Foods (ABF) 2,769.00p +1.99%
Smith & Nephew (SN.) 1,023.00p +1.39%
Intertek Group (ITRK) 2,800.00p +1.16%
BAE Systems (BA.) 433.00p +1.03%
Reckitt Benckiser Group (RB.) 5,135.00p +0.98%
Aviva (AV.) 500.50p +0.93%
RSA Insurance Group (RSA) 429.50p +0.92%
Carnival (CCL) 2,211.00p +0.91%
FTSE 100 - Fallers
Hargreaves Lansdown (HL.) 1,050.00p -2.87%
Mondi (MNDI) 1,009.00p -1.56%
Petrofac Ltd. (PFC) 1,092.00p -1.53%
Johnson Matthey (JMAT) 2,960.00p -1.33%
Ashtead Group (AHT) 894.50p -1.32%
Tesco (TSCO) 243.35p -1.20%
Rexam (REX) 500.00p -1.19%
Royal Dutch Shell 'B' (RDSB) 2,495.50p -1.15%
Anglo American (AAL) 1,586.00p -1.03%
Royal Dutch Shell 'A' (RDSA) 2,376.00p -0.96%
FTSE 250 - Risers
Just Eat (JE.) 240.00p +9.34%
AO World (AO.) 213.90p +6.95%
AL Noor Hospitals Group (ANH) 1,025.00p +3.43%
Beazley (BEZ) 250.50p +3.26%
Xaar (XAR) 563.00p +2.83%
Betfair Group (BET) 1,091.00p +2.54%
Investec (INVP) 517.50p +2.37%
Electrocomponents (ECM) 238.30p +2.36%
JD Sports Fashion (JD.) 393.90p +2.05%
Restaurant Group (RTN) 639.50p +1.99%
FTSE 250 - Fallers
Lonmin (LMI) 219.40p -4.23%
Ophir Energy (OPHR) 197.70p -3.42%
Afren (AFR) 96.70p -3.30%
Ferrexpo (FXPO) 132.50p -2.79%
SIG (SHI) 167.60p -2.56%
Amec (AMEC) 1,082.00p -2.35%
Dixons Carphone (DC.) 322.30p -2.33%
Regus (RGU) 175.90p -2.28%
ITE Group (ITE) 190.50p -2.16%
Genus (GNS) 1,029.00p -2.00% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed as German investor confidence falls - German investor confidence drops
- Ukraine says no to Russian aid
- Thousands of civilians still trapped in Iraq
- No progress on Gaza negotiations, says official
- French deficit widens
FTSE 100: -0.01%
DAX: -1.21%
CAC 40: -0.85%
FTSE MIB: -0.23%
IBEX 35: 0.47%
Stoxx 600: -0.19%
European stocks were little changed as German investor confidence declined on geopolitical crises and the French deficit expanded.
ZEW's economic sentiment index for Germany plunged to 8.6 in August from 27.1 in July, marking the eighth consecutive decrease and the lowest level since December 2012.
"The decline must relate largely to fears about the effects of the Ukraine crisis, which could prove short-lived given the recent partial recovery in German equity prices," Capital Economics said.
"But the further confidence falls, the greater the risks to actual economic activity. Data later this week are likely to reveal that the German economy more or less stagnated in second quarter. While a renewed expansion seems likely in third quarter and beyond, the recovery seems to have passed its peak."
Ukraine has said it will not allow a Russian convoy carrying humanitarian aid to enter its territory.
"We will not consider the possibility of any movement of the Russian column on the territory of Ukraine," said Valeriy Chalyy, deputy head of the presidential administration, according to The Telegraph. Chalyy added that any aid would have to be loaded onto transport provided by the Red Cross and Russian personnel were not allowed to escort the delivery.
Russia sent almost 300 trucks carrying humanitarian aid to eastern Ukraine early on Tuesday morning.
In Iraq, tens of thousands of civilians remain trapped by fighters from Islamic State (IS) on a mountain in northern Iraq, the United Nations said.
US air strikes continued on Tuesday, with a drone targeting an IS mortar near Kurdish troops, the Pentagon said.
On Monday Iraq's president asked MP Haider al-Abadi to form a new cabinet, removing Prime Minister Nouri Maliki.
Meanwhile, negotiations to end the month-long conflict between Israel and Hamas have made little progress, officials said on Tuesday.
The 72-hour truce that began on Sunday held for a second consecutive day but Israeli and Palestinian negotiators weren't any closer to reach an agreement last night, as both parties attended talks in Cairo.
In France, the current-account deficit widened in June after the country's largest listed bank by assets, BNP Paribas, paid a multibillion-dollar fine in the US for violating sanctions against Iran, Cuba and Sudan.
The Eurozone's second-largest economy recorded a €7.4bn current-account deficit in June compared with €3.3bn in May, the Bank of France said. Excluding the impact of the fine, the deficit was €3.1bn.
Fugro, Prudential
Fugro retreated after Natixis downgraded the shares to 'reduce' from 'neutral', blaming first-half impairment charges, restructuring of some of its operations and margin pressures.
Prudential rallied after saying first-half operating profit rose 17% to £1.52bn, exceeding market expectations.
Hargreaves Lansdown edged lower after UBS initiated coverage of the stock with a 'sell' rating, saying that the "risk-reward [is] significantly skewed to the downside".
Ladbrokes advanced after the UK operator of betting shops reported a 1.6% increase in first-half revenue to £577.8m. The company forecast a return to growth in the second half of the year after pre-tax profit dropped in the first six months.
Serco Group was a high riser as the outsourced-services provider said Aggreko's Angus Cockburn will take over as chief financial officer.
Henkel declined as the German maker of Loctite glue and Persil washing detergent said earnings growth will slow in the second half, reflecting the impact of crises in Ukraine and the Middle East.
The euro fell 0.19% to $1.3359.
Brent crude futures dropped 1.4% to $103.18 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks move lower, oil pressured by IEA forecasts - Job openings ahead of forecasts
- Oil futures slip lower
- Traders eye Russian convoy heading to Ukraine
Dow Jones Industrials: -0.10%
Nasdaq Composite: -0.23%
S&P 500: -0.15%
The main US equity averages were registering small declines in early trading as traders continued to keep a bead on the latest events in Ukraine.
Russia said it would send 280 trucks carrying humanitarian aid across the border.
Meanwhile, figures from European powerhouse Germany showed that economic sentiment was worse than expected in August, as professional investors' sentiment took a hit from the recent geopolitical tensions in the east.
The Bureau of Labor Statistics' latest job openings and labour turnover survey (JOLTS) showed job openings at a 13-year high, rising by 90,000 to hit 4.67m (consensus: 4.55m) in June, versus a revised 4.58m in May.
In other macro news, the National Federation of Independent Business' small business optimism index increased from 95 to 95.7 in July, slightly short of the 96 consensus estimate.
In corporate news, Apple shares were higher ahead of the bell amid speculation that the company has started production of new iPad models.
Large drop in crude futures
US 10-year Treasury yields are edging higher by one basis point to 2.43%.
Front month West Texas crude futures are now slipping 0.93% to the $97.17/barrel mark on the NYMEX.
In a report released on Tuesday the IEA said: "Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin." |
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| | Broker Tips | | Broker tips: Hargreaves Lansdown, Prudential, African Barrick Gold, Ladbrokes Shares in financial services group Hargreaves Lansdown were under pressure on Tuesday after UBS initiated coverage of the stock with a 'sell' rating, saying that the "risk-reward [is] significantly skewed to the downside".
The bank set a 850p target for the stock, which implies downside from the 1,081p closing price on Monday. It believes that at current prices, the market "significantly overestimates" the flow potential at Hargreaves Lansdown.
The Share Centre has given Prudential a 'buy' rating, saying that the insurer is "attractive for investors" after another set of strong results on Tuesday.
"We continue to recommend Prudential as a 'buy' for investors looking for a positive investment idea that spans the US, Asia and the UK. The Asian growth story continues to remain highly attractive along with strong UK and US operations."
The "tide has turned for the better" at African Barrick Gold (ABG), according to Investec which upgraded the stock from 'sell' to 'hold' on Tuesday. The broker hiked its target for the shares from 212p to 260p.
Investec said ABG's second-quarter and first-half figures released last month showed a good production performance, but the key takeaway was that operating cash flows exceeded investing cash flows. This was "the first time this has occurred in 10 quarters", the broker said.
Numis Securities reiterated a 'hold' stance on shares of Ladbrokes on Tuesday after a broadly in-line first half, but said it expects a "material turnaround" in profitability at the UK bookmaker.
Numis reckons that the recent share-price performance - the stock has fallen by a third over the last year - suggests "scepticism among investors about the online strategy as well as concern over the somewhat hostile regulatory environment". | | |
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