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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: Stocks pare gains as Ukraine tensions flare - Annual UK GDP growth revised higher
- Ukraine crisis in focus as Russian convoy nears border
- BHP leads miners higher on demerger comments
techMARK 2,755.64 +0.22%
FTSE 100 6,689.08 +0.06%
FTSE 250 15,667.81 -0.05%
Gains in London stocks petered out towards the end of trading after the Ukrainian government announced that its military had attacked and destroyed part of a Russian armoured column.
Andriy Lysenko, a spokesperson for the Ukrainian army, told journalists that the armoured Russian column had been tracked from the moment it had crossed the border.
Even so, the Footsie managed to dodge the losses which dragged its European peers
sharply lower, after an upgrade to UK second-quarter growth estimates and a jump in the share prices of 3i and mining giant BHP Billiton.
The Office for National Statistics' second estimate of annual UK gross domestic product (GDP) growth in the April-to-June period was lifted unexpectedly to 3.2%.
This was up 10 basis points from the original prediction on the back of a strong construction sector and marked the strongest annual growth rate in over six years. The estimate for quarter-on-quarter growth of 0.8% was left unchanged.
The FTSE 100 was up 0.06% at 6,689.08 by the end of trading.
Disappointing indicators from China and a stagnation in Europe spurred hopes in recent days that policymakers will step in to give growth a boost. Easing concerns about an early rate hike by the Bank of England were also supporting stocks after the central bank warned about weak wage growth in the UK.
Comments on Thursday from Russian President Vladimir Putin about ending the crisis in Ukraine had earlier helped investor risk appetite in London, as well as the resignation of Iraq Prime Minister Nouri Maliki overnight as he supported the formation of a new government.
BHP gains on demerger comments
BHP Billiton shares were higher after the miner said that it is considering a demerger of certain assets in an effort to make the business "simpler and more productive".
The company, reiterated its focus on its "four pillars" - iron ore, copper, coal and petroleum - with potash being a potential fifth, suggesting that nickel, aluminium and bauxite assets could be spun off. It will update the market after the board reconvenes next week.
Other miners such as Rio Tinto, Anglo American and Glencore also performed well.
Shares in Smith & Nephew were under pressure after analysts at Morgan Stanley downgraded the medical devices maker from 'overweight' to 'equal weight'. The bank said that even if US peer Stryker returns with a bid in November, the deal "remains uncertain" and the stock "could start to lose its M&A premium of around 10%" in the near term.
Construction group Balfour Beatty slipped lower after reaffirming its rejection of a takeover proposal by Carillion, branding it "opportunistic" and accusing Carillion of wanting to reduce Balfour's UK construction revenues by up to two-thirds. Carillion's shares were firmly lower in morning trade. |
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| | FTSE 100 - Risers
3i Group (III) 377.00p +1.70%
Ashtead Group (AHT) 907.50p +1.45%
Morrison (Wm) Supermarkets (MRW) 173.10p +1.41%
BHP Billiton (BLT) 2,050.00p +1.21%
Babcock International Group (BAB) 1,106.00p +1.19%
Whitbread (WTB) 4,275.00p +1.14%
Sainsbury (J) (SBRY) 311.70p +1.14%
Tesco (TSCO) 248.00p +1.14%
Sports Direct International (SPD) 696.00p +1.02%
Experian (EXPN) 1,032.00p +0.98%
FTSE 100 - Fallers
Smith & Nephew (SN.) 1,018.00p -2.21%
Fresnillo (FRES) 1,005.00p -2.14%
Royal Mail (RMG) 435.60p -1.80%
HSBC Holdings (HSBA) 643.50p -1.21%
G4S (GFS) 263.70p -1.09%
Randgold Resources Ltd. (RRS) 5,065.00p -1.07%
Rexam (REX) 496.70p -0.96%
Petrofac Ltd. (PFC) 1,134.00p -0.87%
TUI Travel (TT.) 366.60p -0.84%
Antofagasta (ANTO) 807.00p -0.74%
FTSE 250 - Risers
Afren (AFR) 103.80p +6.57%
Ted Baker (TED) 1,804.00p +4.58%
Genus (GNS) 1,109.00p +3.94%
Perform Group (PER) 214.10p +3.43%
Premier Oil (PMO) 336.80p +3.15%
Big Yellow Group (BYG) 540.50p +3.15%
Unite Group (UTG) 426.00p +2.95%
Exova Group (EXO) 235.00p +2.62%
Barr (A.G.) (BAG) 661.00p +2.48%
Computacenter (CCC) 625.50p +2.46%
FTSE 250 - Fallers
Centamin (DI) (CEY) 66.50p -4.86%
SVG Capital (SVI) 410.00p -4.54%
Petra Diamonds Ltd.(DI) (PDL) 190.00p -4.47%
Hochschild Mining (HOC) 161.90p -4.20%
Carillion (CLLN) 333.10p -3.95%
Kazakhmys (KAZ) 303.50p -3.56%
African Barrick Gold (ABG) 246.30p -3.41%
Just Eat (JE.) 254.00p -3.05%
Spirent Communications (SPT) 100.20p -3.00%
Pets at Home Group (PETS) 181.00p -2.58% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks fall after Ukraine attacks Russian convoy - Ukraine attacks Russian convoy
- UK GDP grows
- US factory output rises
- US consumer confidence falls
FTSE 100: 0.06%
DAX: -1.44%
CAC 40: -0.74%
FTSE MIB: -0.29%
IBEX 35: -0.71%
Stoxx 600: -0.40%
European stocks ended Friday's session lower on news Ukraine destroyed a significant part of a Russian convoy.
Ukrainian President Petro Poroshenko told UK Prime Minister David Cameron that Ukrainian forces attacked the military column that had crossed the border, sparking fresh concerns about tensions with Russia.
Moscow accused Ukraine of trying to disrupt its humanitarian mission, which according to the Russian government intends to deliver aid to civilians in Eastern Ukraine, and has demanded a ceasefire in the region to allow deliveries.
The news dragged on European stocks following earlier gains.
"If the reports are true that there is an exchange of arms between Russia and Ukraine, that is a setback in the recent calm," Jim McDonald, chief investment strategist at Chicago-based Northern Trust Asset Management, told American broadcaster CNBC.
"It is hard to know how serious this is, but any sustained upturn in violence could lead to a short-term setback."
UK GDP, US data
Britain's gross domestic product (GDP) expanded at a 0.8% quarter-on-quarter and 3.2% year-on-year pace in the three months to June, according to revised data from the Office for National Statistics.
Economists had been expecting a rate of expansion of 0.8% over the quarter and of 3.1% in comparison with the same quarter a year ago.
Capital Economics said the figures showed the UK's economic recovery became less balanced in the second quarter as growth in industrial production was revised down from 0.4% to 0.3%.
In the US, industrial output climbed 0.4% in July, the same rate of growth as the previous month and beating forecasts for a 0.3%.
US manufacturing production rose 1% in July following a 0.3% increase in June. Analysts had predicted a 0.4% gain.
The figures followed a disappointing New York Fed Empire Manufacturing report which fell to 14.69 in August from 25.6 in July, missing the consensus estimate of 20.
The University of Michigan's consumer confidence index for August unexpectedly slipped to 79.2 from 81.8 the month before (consensus: 82.5).
BHP Billiton, H&M
SVG Capital slumped after Permira Holdings sold its entire stake in the company.
BHP Billiton advanced after proposing to spin off minor businesses to focus on four main products.
Hennes & Mauritz gained after the operator of H&M clothing stores reported July sales that exceeded estimates.
Deutsche Lufthansa was higher following a report that German lawmakers are reviewing their aviation policy.
The euro climbed 0.19% to $1.3390.
Brent crude futures increased 1.16% to $103.29 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks rise after better-than-forecast factory data US stocks advanced after a report showed a better-than-expected increase in industrial and manufacturing production.
Industrial output climbed 0.4% in July, the same rate of growth as the previous month and beating forecasts for a 0.3%.
Manufacturing production rose 1% in July following a 0.3% increase in June. Analysts had predicted a 0.4% gain.
"On balance, these data support our view that the economy remains fundamentally healthy and will strengthen in the second half of the year," said Capital Economics economist Paul Dales.
The figures offset a disappointing New York Fed Empire Manufacturing report which fell to 14.69 in August from 25.6 in July, missing the consensus estimate of 20.
Policymakers have been weighing data to weigh whether the world's biggest economy has recovered enough to sustain an interest rate hike.
The University of Michigan's consumer confidence index for the month of August unexpectedly slipped to 79.2 from 81.8 the month before (consensus: 82.5). The expectations for the sub-index fell to 66.2 from 71.8, hitting its lowest mark since October.
On Thursday, Federal Reserve St. Louis President James Bullard said he would still like to see the central bank raise interest rates for the first time this cycle in March 2015. "The end of the first quarter of 2015 is still my preferred liftoff date," Bullard said in an interview with The Wall Street Journal.
Meanwhile, the market continued to watch geopolitical developments, particularly in the Ukraine after the nation said Russia is still supplying rebels in the eastern part of the country with equipment. NATO also said it sees a continuous flow of Russian weapons into the region. Officials from the International Committee of the Red Cross began inspecting a convoy of trucks sent by Russia to provide humanitarian aid to eastern Ukraine.
On the company front, Monster Beverage Corp. surged after Coca-Cola Co. agreed to buy a stake in the company.
J.C. Penney Co. rallied after reporting a narrower second-quarter loss.
Applied Materials gained after forecasting fiscal fourth-quarter sales that may beat analysts' estimates.
West Texas Intermediate crude futures rose 0.28% to $102.36 per barrel, according to the ICE.
The US 10-year yield fell two basis points to 2.37%. |
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| | Broker Tips | | Broker tips: Smith & Nephew, Centamin, Balfour Beatty, UK motor insurers Shares in Smith & Nephew were under pressure on Friday after analysts at Morgan Stanley downgraded the medical devices maker from 'overweight' to 'equal weight' following a recent strong run in the stock.
The bank said that even if US peer Stryker returns with a bid in November, the deal "remains uncertain" and the stock "could start to lose its M&A premium of around 10%" in the near term.
Numis Securities has cut its recommendation for Centamin from 'buy' to 'hold', saying that it will be challenging for the Egypt-focused gold miner to hit its full-year output target of 420,000 ounces.
The broker said that considering first-half production was just 156,000 ounces, 264,000 ounces will need to be produced in the second half to meet forecasts. It, however, estimates full-year output of just 406,000 ounces.
Investors in takeover target Balfour Beatty should sit tight in case a bid battle breaks out for the construction company, according to broker Brewin Dolphin.
Berenberg has lifted its targets for Admiral, Direct Line and Esure but reckons that the UK motor insurance market is "about to enter a very challenging period".
"We expect recent declines in pricing to squeeze underwriting margins as claims costs continue to grow, while regulatory change presents a threat to some revenue streams," the broker said.
Nevertheless, Esure, famous for the Sheilas' Wheels brand, is now Berenberg's "preferred play" in the sector, as it upgraded the stock from 'hold' to 'buy'. The target for the shares was raised from 267p to 286p. | | |
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