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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 weighed down by Russia worries - Coca-Cola HBC, RSA disappoint
- Russia-West tensions high after food import ban
- BoE holds rates, ECB expected to do same
techMARK 2,710.03 -0.18%
FTSE 100 6,597.37 -0.58%
FTSE 250 15,240.10 -0.15%
UK stocks finished the session at their intra-day lows almost as traders continued to anxiously watch developments between Ukraine and Russia.
Nato said that the significant increase of Russian troops near Ukraine over the last few days is of "great concern" amid fears that Moscow is readying to invade. Meanwhile, Russia has denied the allegations, saying that comments from Nato are misleading.
That came as both the Bank of England and the European Central Bank (ECB) decided to keep their respective monetary policy settings unchanged.
The FTSE 100 ended the day 0.58% lower at 6,597.37.
That was as expected. Nevertheless, and as ECB President Mario Draghi indicated, authorities are facing multiple and interconnected instances of geopolitical tension which to a certain extent clouds the economic outlook.
As for the Monetary Policy Committee's (MPC) own musings at today's meeting, it seems likely that the debate was far more interesting than on other recent occasions. However, we will have to wait until at least the next Inflation Report to learn to just what extent the consensus in favour of staying put on rates until 2015 is fraying.
Meanwhile, and in response to the latest round of Western sanctions, the Kremlin imposed a ban on imports of agricultural goods from the US and European Union for up to one year.
In economic news on Thursday, German industrial production rose by just 0.3% in June after a revised 1.7% fall the previous month, though the rebound was much worse than the 1.2% rate of growth expected. The figures followed data on Wednesday showing an unexpected drop in German factory orders in June.
CCH disappoints with volume guidance
Aviva gained after delivering half-year improvements in its five key metrics, increasing cash flow, operating profits and new business, as well as cutting both costs and its combined operating ratio. However, insurance peer RSA declined after net written premiums fell 9% in the first half.
Bottling firm Coca-Cola HBC slumped after saying unfriendly consumer sentiment and foreign exchange headwinds looked unlikely to improve during 2014 as it downgraded its volume expectations for the year as a whole.
RSA was also a heavy faller after net written premiums fell 9% in the first half. Pre-tax profits slumped from £250m last year to just £69m, as a result of £117m of restructuring costs.
Shares in energy group Drax slumped after UK courts said one of its power-generating units is not eligible for government subsidies.
Investment group Henderson dropped 6% after first-half results failed to meet the market's expectations. Assets under management fell nearly 6% over the second quarter as improvements in retail were offset by falls in the institutional business.
Miner Rio Tinto was on the rise after it hailed an "outstanding performance" in the first half as underlying earnings jumped 21% and cash flow generation increased 8%, with the miner topping its cash cost reduction target ahead of schedule. |
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| | FTSE 100 - Risers
Sage Group (SGE) 382.10p +3.08%
Aviva (AV.) 502.50p +2.61%
Royal Mail (RMG) 414.00p +2.53%
Legal & General Group (LGEN) 237.70p +2.46%
ARM Holdings (ARM) 870.50p +2.23%
G4S (GFS) 254.70p +2.00%
Carnival (CCL) 2,177.00p +1.97%
Land Securities Group (LAND) 1,035.00p +1.67%
Hargreaves Lansdown (HL.) 1,050.00p +1.65%
Sports Direct International (SPD) 656.00p +1.39%
FTSE 100 - Fallers
Coca-Cola HBC AG (CDI) (CCH) 1,302.00p -5.31%
easyJet (EZJ) 1,239.00p -3.43%
RSA Insurance Group (RSA) 430.50p -3.02%
GlaxoSmithKline (GSK) 1,377.00p -2.75%
Anglo American (AAL) 1,528.50p -2.64%
Royal Bank of Scotland Group (RBS) 337.40p -2.51%
BHP Billiton (BLT) 1,993.00p -2.06%
Smith & Nephew (SN.) 1,000.00p -1.96%
Antofagasta (ANTO) 806.50p -1.95%
IMI (IMI) 1,367.00p -1.94%
FTSE 250 - Risers
Victrex plc (VCT) 1,666.00p +4.71%
Elementis (ELM) 276.10p +4.43%
Spirax-Sarco Engineering (SPX) 2,793.00p +3.75%
Pets at Home Group (PETS) 190.20p +3.65%
Cobham (COB) 295.70p +3.03%
Savills (SVS) 590.00p +2.70%
Smith (DS) (SMDS) 266.20p +2.54%
Spectris (SXS) 1,978.00p +2.49%
Foxtons Group (FOXT) 267.50p +2.49%
Home Retail Group (HOME) 176.00p +2.33%
FTSE 250 - Fallers
Drax Group (DRX) 651.50p -8.24%
Henderson Group (HGG) 228.00p -5.59%
Petra Diamonds Ltd.(DI) (PDL) 186.00p -4.62%
Kazakhmys (KAZ) 302.10p -4.10%
Cairn Energy (CNE) 177.00p -3.38%
Xaar (XAR) 552.00p -3.07%
International Personal Finance (IPF) 521.00p -2.89%
Polymetal International (POLY) 516.50p -2.82%
AL Noor Hospitals Group (ANH) 970.00p -2.81%
Stock Spirits Group (STCK) 300.00p -2.76% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks fall as Draghi warns of risks to euro-area recovery - ECB and BoE keep policy unchanged
- German industrial production falls
- Russia imposes counter-sanctions
- US weekly jobless claims fall
FTSE 100:-0.58%
DAX: -1.00%
CAC 40: -1.36%
FTSE MIB: -1.94%
IBEX 35: -1.64%
Stoxx 600: -0.68%
European stocks declined after European Central Bank (ECB) President Mario Draghi warned of risks to the recovery, including geopolitical tensions in Russia.
Speaking at a press conference on Thursday after the monetary authority decided to keep policy on hold, Draghi said that the economic recovery remained "weak, fragile and uneven".
The president also said inflation would remain low for some time before gradually increasing and that further stimulus was not on the horizon.
The latest Eurozone inflation figures showed a drop to 0.4% in July, the lowest level since October 2009.
Draghi blamed energy and food prices along with an unfavourable exchange rate for the fall.
In June, the ECB cut its benchmark rate from 0.25% to 0.15% and became the first major central bank to introduce negative interest rates.
"After the meaningful easing of monetary conditions triggered by the June measures, the ECB is now in a wait-and-see mode, waiting for the stimulus to feed through to the real economy," accorinding to UniCredit vice president, Marco Valli. "There was nothing today that challenged this view."
Draghi also highlighted that Russia's counter-sanctions announced on Thursday could present a possible threat but was too early to tell how it would affect the euro-area exactly.
Russian Prime Minister Dmitry Medvedev said the restrictions include all cheese, fish, beef, pork, fruit, vegetables and dairy products after the European Union, US, Canada, Australia and Norway imposed sanctions against Russia for its insurgence in Ukraine.
The euro fell 0.20% to $1.3356 following the meeting.
BoE keeps policy unchanged
The Bank of England (BoE) announced it would keep interest rates at a record 0.5% low and asset purchases at £375bn, as expected by analysts.
Speculation of an earlier-than-predicted interest rate hike has been growing amid signs of a pick-up in UK economic growth.
The National Institute of Economic and Social Research (NIESR) on Tuesday predicted the BoE could raise interest rates as soon as February while most BoE policymakers expect an increase in mid-2015.
Berenberg said on Thursday that the inflation report on 13 August should leave open the possibility of a November rate hike.
"Those forecasts are a key signalling device and we look for the central bankers to raise their growth expectations and show inflation returning to the 2% inflation target by the end of its three-year forecast window," Berenberg chief economist Rob Wood said.
"That would leave plenty of room for a majority of rate setters to support a hike by November. A very dovish forecast would, of course, make a November hike unlikely."
Meanwhile, German industrial production fell 0.5% year-on-year in June, after rising 1.1% in May, surprising analysts who predicted a 0.3% increase.
In the US, jobless claims dropped to 289,000 in the week to 2 August, the Labor Department reported. It was down from a revised 303,000 the week before and better than the 304,000 expected by analysts.
Nestle, Commerzbank
Nestle gained after announcing an 8bn Swiss franc share buyback and reiterated its full-year sales forecast.
Commerzbank rallied as the German bank posted a rise in second-quarter net income as it shed unwanted assets.
Munich Re declined after the world's biggest reinsurer announced profit that missed estimates.
Adidas retreated as the sports-gear maker cut its profit forecast for 2014 following a drop in first-half revenue in North America.
Beiersdorf slumped as the maker of Nivea body wash reported first-half organic sales growth that fell short of analysts' estimates.
Aviva was up after the UK insurer posted a 4% increase in operating profit to £1.05bn, ahead of forecasts.
Brent crude futures dropped 0.28% to $104.29 per barrel, according to the ICE. |
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| | US Market Report | | US open: Stocks rise as initial jobless claims fall US stocks gained at the opening bell on Thursday after a report showed weekly jobless claims fell.
Jobless claims dropped to 289,000 in the week to 2 August, the Labor Department reported. It was down from a revised 303,000 the week before and better than the 304,000 expected by analysts.
The four-week moving average dropped to 293,500, the lowest since February 2006.
"Overall, this report shows that layoffs remain subdued and is consistent with solid job growth," said analyst Dean Maki from Barclays.
It comes after the government's monthly employment report last Friday showed companies in the US added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997.
Strong labour market data has increased speculation that the Federal Reserve may be prompted to hike interest rates sooner than expected.
21st Century Fox, Keurig Green Mountain
21st Century Fox advanced as X-Men: Days of Future Past and Rio led to a jump in income at its film business.
Keurig Green Mountain declined after the coffee brewer's profit forecast for the current period disappointed analysts.
Centurylink was a high riser as high-speed internet connections helped second quarter sales to grow.
Carnival Corp. rallied after Bank of America raised its rating on the cruise ship operator.
The 10-year Treasury yield fell two basis points to 2.45%.
West Texas Intermediate crude futures rose 0.1% to $96.93 per barrel, according to the ICE. |
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| | Broker Tips | | Broker tips: Rio Tinto, Hargreaves Lansdown, Henderson, Dixons Carphone Rio Tinto easily beat consensus estimates with its first-half results on Thursday, though Investec repeated its 'hold' recommendation for the stock on a valuation basis. It said that the stock appears "fully valued" on a price-to-earnings basis.
Nevertheless, the broker said that shareholders could still see "increased returns" from 2015 after the miner's recent strong performance.
Numis Securities has upped its rating for Hargreaves Lansdown (HL) from 'hold' to 'buy', playing down recent concerns about the impact on the financial services group from the Retail Distribution Review
The broker said that its upgrade follows a period of share-price weakness, with the stock having fallen by nearly a quarter since the start of 2014.
Henderson Group's first-half profits came in ahead of Canaccord Genuity's estimates but failed to meet up to the market's expectations.
The broker kept a 'hold' rating for the investment company on Thursday, highlighting the still-yet-to-be-seen turnaround in the institutional business.
Investec issued a 'buy' recommendation on Dixons Carphone, saying the newly merged company should benefit from strong buying synergies and is well-positioned to capitalise on structural changes in mobile.
After Carphone Warehouse and Dixons Retail completed their merger, Investec analyst Alistair Davies took a fresh look at the potential benefits of the deal, spying superior earnings growth potential and an undemanding valuation. | | |
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