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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: Supermarkets lead stocks lower Supermarkets led London's top flight lower on Tuesday after figures revealing three of the UK's biggest players losing sales and market share. Sainsbury's fell 15p to 263.8p after research group Kantar Worldpanel released data showing sales at the chain dropped 1.8% in the 12 weeks to 14 September, while Morrisons' sales dipped 1.3%, dragging its shares down 4.4p to 174.6p. Shares in Tesco, which on Monday was forced to revise its profit forecasts after an accounting error, reversed 8.5p to 194.5p as its sales declined 4.5%. Trader David White at Spreadex said: "Investors are today saying of the supermarkets that the rate at which earnings will change over time is increase to the downside." The FTSE 100 Index tumbled 97.55 points to 6676.08 by the close as eurozone purchasing managers index (PMI) data showed the slowest rate of growth in European business activity so far this year, although Chinese PMI figures were better than expected. The Chinese news buoyed miners, which were among the few risers. Rio Tinto lifted 49.5p to 3108p, Randgold Resources gained 47p to 4312p, miner and commodity trader Glencore increased 2.35p to 344.25p and BHP Billiton moved 11p higher to 1741.5p. Investors reduced stakes in health stocks on news that the US will act against inversion deals aimed at cutting the tax US corporations pay by moving their bases to countries with lower corporation tax. AstraZeneca fell 163.5p to 4414p, Smith & Nephew backtracked 30p to 1038p, Shire eased 130p to 5100p and GlaxoSmithKline was 21.5p off at 1422p. Sweetener group Tate & Lyle soured 122.5p to 610p after it blamed severe US weather and the temporary shutdown of a plant in Singapore for higher costs and a profit warning. Imperial Leather group PZ Cussons slipped 10p to 370p despite reporting a strong performance in its UK washing and bathing division between June and September. |
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| | FTSE 100 - Risers
Carnival (CCL) 2,491.00p +2.22%
Rio Tinto (RIO) 3,104.50p +1.50%
Randgold Resources Ltd. (RRS) 4,323.00p +1.36%
Glencore (GLEN) 345.70p +1.11%
BHP Billiton (BLT) 1,743.50p +0.75%
Fresnillo (FRES) 763.50p +0.46%
Anglo American (AAL) 1,429.00p +0.18%
London Stock Exchange Group (LSE) 1,899.00p +0.11%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 264.70p -5.06%
AstraZeneca (AZN) 4,346.50p -5.05%
Tesco (TSCO) 194.15p -4.36%
Schroders (SDR) 2,372.00p -3.54%
Smith & Nephew (SN.) 1,035.00p -3.09%
Tullow Oil (TLW) 647.50p -3.07%
Rolls-Royce Holdings (RR.) 972.50p -3.04%
United Utilities Group (UU.) 816.00p -3.03%
IMI (IMI) 1,285.00p -2.87%
GKN (GKN) 332.30p -2.86% FTSE 250 - Risers
JD Sports Fashion (JD.) 441.00p +2.56%
Polymetal International (POLY) 484.00p +2.30%
Go-Ahead Group (GOG) 2,487.00p +1.80%
Bank of Georgia Holdings (BGEO) 2,503.00p +1.79%
Centamin (DI) (CEY) 57.85p +1.58%
Just Eat (JE.) 304.00p +1.33%
Evraz (EVR) 125.10p +1.30%
AL Noor Hospitals Group (ANH) 1,042.00p +1.17%
SSP Group (SSPG) 259.40p +0.86%
Riverstone Energy Limited (RSE) 899.50p +0.84%
FTSE 250 - Fallers
Tate & Lyle (TATE) 611.00p -16.59%
Ocado Group (OCDO) 281.10p -5.35%
CSR (CSR) 720.00p -5.01%
Soco International (SIA) 386.30p -4.55%
Lonmin (LMI) 193.50p -4.16%
Informa (INF) 494.60p -4.15%
International Personal Finance (IPF) 493.60p -3.88%
Ferrexpo (FXPO) 125.00p -3.77%
Bwin.party Digital Entertainment (BPTY) 90.80p -3.56%
Senior (SNR) 268.40p -3.52% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks end lower on disappointing PMIs, Middle East tensions European stocks were in the red as a report showed Eurozone manufacturing activity declined and as tensions flared in the Middle East.
Markit's Eurozone manufacturing purchasing managers' index (PMI) dropped to 50.5 from 50.7 a month earlier, missing analysts' projections for a reading of 50.6. A level above 50 signals expansion.
Euro-area services PMI also declined to 52.3 in September from 52.1 in August, more than the 53 that was predicted.
In the US, Markit's manufacturing PMI held at 57.9 in September, compared to forecasts for an increase to 58.
HSBC's PMI on Chinese manufacturing earlier showed an increase to 50.5 in September from 50.2 the prior month, beating expectations for the reading to fall to 50.
Meanwhile, the US launched airstrikes against Islamic State (IS) positions in Syria in an attempt to abolish the Sunni extremist group. The Pentagon said in a statement on Tuesday that the United Arab Emirates, Saudi Arabia, Jordan, Bahrain and Qatar have helped with strikes against 14 IS targets near Raqqa and along the Iraqi border.
Raiffeisen, Yara
Raiffeisen Bank International plunged after saying it expects an annual loss amid exposure to risks in the Ukraine and Russia.
Yara International gained after the Oslo-based company said it's in merger talks with CF Industries Holdings to create a fertiliser supplier with 420bn in sales to growth in North America.
Tesco dropped as Kantar Worldpanel said the grocer's market share had declined this year. The UK supermarket chain also said Alan Stewart would leave M&S to join as chief financial officer on Tuesday.
Tate & Lyle edged lower after the maker of Splenda sweetener forecast an annual profit that missed analysts' estimates.
The euro rose 0.04% to $1.2854. |
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| | US Market Report | | US open: Markets open lower as geopolitical tension rises in Syria US markets opened lower on Tuesday, amid disappointing data from European and Asian markets and news of a US operation against Islamic State (ISIS) militants in Syria.
The Chinese HSBC manufacturing purchasing managers' index (PMI) delivered strong figures overnight rising from 50.2 to 50.5, while the Eurozone PMI once again came in weaker with the only main boost coming in the form of the French manufacturing sector, which managed to rise from 46.9 to 48.8.
The US was joined by its "coalition partners", Bahrain, Saudi Arabia, Jordan and the United Arab Emirates in an attack against ISIS in Syria, the first attack conducted alongside Middle Eastern countries.
The markets responded almost immediately to the US intervention in Syria, as the 10-year Treasury note rose 0.02 to 2.546%, while the five-year note yield dropped 1.5 basis points to 1.769% and the 30-year bond yield fell 0.02% to 3.270%.
"The escalation of the conflict will of course raise questions over the risk appetite of many within the markets, who are no doubt worried about a major war which appears to be unfolding," said Joshua Mahony, research analyst at Alpari UK.
Shares of Abbvie declined in early trading following news that the Treasury Department decided to implement new measures aimed at curbing tax benefits to corporations that move their headquarters abroad.
As a result, Abbvie, which agreed to buy Dublin-based Shire in July, saw its share price drop almost 5%, a similar fate to that suffered by Astrazeneca, which also fell.
CF Industries rose slightly after news emerged that the fertilizer producer was in talks with Norway-based chemical firm Yara International over a possible takeover.
Apple registered a marginal fall after it denied a report from Techcrunch that it planned to close Beats Music, the streaming service it recently purchased, while Herbalife shares were on an upward curve in early trading following a 10% drop on Monday to their lowest level in 17 months. |
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| | Brokers Tips | | Broker tips: BAE Systems, Tesco, Dairy Crest Analysts at UBS believe BAE Systems is in the right segments of the defence industry – aerospace and high-end technology – to capitalise on the increased emphasis on higher technology military operations.
That is manifestly the case when one looks at the recent 50 nations for Air Power operations to counter Islamic State (IS) in Iraq and Syria. BAE has the right mix of businesses to capitalise on them (51% Air, 25% Sea, 17% Land and 7% Cyber) UBS analysts think.
Furthermore, as a result of rolling forward its five-year profit forecasts to a fifth year its estimate of the five-year growth rate rises from 1.9% per annum to 2.2%, as the company moves further past the 2014-16 plateau in defence spending and more towards GDP-type growth towards the end of the decade.
For that reason the broker´s price target on the shares rises to 505p from 460p previously.
As well, the aerospace and defence manufacturer´s 4.4% dividend yield is decsribed as ´rock solid´.
On the basis of all of the above the Swiss broker maintains its 12-month 'buy' recommendation on the shares.
In a note to clients analysts at SocGen highlight the lack of detail provided to shareholders by Tesco´s management, with the company having offered no breakdown between the commercial income from suppliers and delayed accrual costs to explain its reduced profit guidance.
"At this stage, we are still finding it very difficult to understand what happened (significant accounting issues, poor practices with suppliers that might not be one-offs, lax internal control, governance)," the French broker goes on to add.
In the opinion of SocGen the retailer should follow the route taken by Carrefour when it traversed a similar situation three years ago and divest some non-core assets.
Averaging out a 20% discount to the European sector average and the discounted value of the company´s cash flows yields a price target of 190p for SocGen, which it maintains.
Under a worst case scenario, the UK trading margins would fall to 1.5% and earnings per share to 12.9p, implying a valuation of 150p.
That would be the threshold for viewing Tesco as a value stock, the broker concludes.
SocGen has reiterated its ´sell´ recommendation on the shares.
Despite the losses incurred at its Dairies division during the first half of fiscal year 2015, resulting from declines in milk prices and cream prices, Dairy Crest has the opportunity to drive growth over the medium-to-longer-term through the management and and development of its flagship brands.
Hence, while volatility in that part of the business exposed to diary processing is expected to continue analysts at JP Morgan think the current multiples on which the shares are trading are "undemanding".
That is particularly so in light of the 6% dividend yield, it adds.
As well, the benefit of recent farmgate price cuts will materialise in the second half and the comany did see steady growth at its four flagship brands.
For all of the above reasons the broker has kept its 'overweight' recommendation on the shares although it has lowered its price target to 480p from 530p beforehand. | | |
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