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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: US markets help FTSE end higher following initial slump Following an initial decline, London's blue chips had a decidedly better afternoon of trading, thanks in part to an upbeat performance amongst US equities.
Coming off an intra-day low of around 6,306, the FTSE 100 ended Tuesday's session 26.44 points higher at 6,392.68.
The morning's losses were due in part to UK inflation figures, which slumped to a five-year low of 1.2% in September from 1.5% in August. Economists had expected a reading of 1.4%.
Investec analyst Victoria Clarke said that "the case for a near-term rate hike is becoming muddier".
Over in the US, stocks rallied as better than expected earnings from the likes of Citigroup turned markets positive for the first time in four days.
IG market analyst, Chris Beauchamp, said: "Earnings from big US banks have been greeted with a sigh of relief, and are a welcome distraction from the troubles of the eurozone and other parts of the world.
"Even the abysmal ZEW reading from Germany has been shrugged off, with some investors reasoning that if things really are as bad in the Eurozone as the data suggests, then European Central Bank quantitative easing has just taken a step closer to becoming reality."
German economic sentiment fell more than expected in October, adding pressure on the European Central Bank to ramp up its efforts to address the weak recovery. The ZEW Center for European Economic Research index of investor and analyst expectations fell to -3.6 from 6.9 in September. Analysts had predicted a reading of 0.
Meanwhile, Eurozone industrial output dropped by 1.8% over the month of August, according to Eurostat, worse than the 1.6% decline expected by the market.
The Ebola crisis has continued to act as a negative backdrop, with the World Health Organisation saying that it anticipates seeing 5,000 to 10,000 Ebola cases per week in Guinea, Liberia and Sierra Leone by December.
So far, the organisation had received reports of 8,914 Ebola cases and 4,447 deaths from the virus.
Burberry declines after experiencing "more difficult external environment"
Burberry delivered double-digit underlying growth in the first half but shares in the high end fashion group slumped after the firm said that it has experienced a "more difficult external environment" with a softening in growth from Chinese consumers both home and when travelling.
Oil stocks were in decline, with Tullow Oil, BP, BG Group and Royal Dutch Shell all firmly in the red as they tracked oil prices lower.
On the upside, IAG flew higher thanks to an upgrade from HSBC, from 'neutral', while United Utilities was pushed higher by Morgan Stanley, which raised its target from 865p to 875p.
On the second tier, the share price of Michael Page International dived after the recruitment firm delivered a profit warning, saying that its full-year bottom line would be "modestly lower than consensus market expectations". The company also said it was more cautious than it was previously on the short-term outlook for a number of international markets.
Also in the red was emerging markets asset manager Ashmore Group, which saw its assets under management (AuM) decrease by $3.7bn in the first quarter, driven mostly by poor investment performance. AuM was $71.3bn at 30 September as a result of negative investment performance of $3.4bn and net outflows of $0.3bn.
AO World led the upside, but made only a slight dent in the heavy losses seen in its share price since its flotation earlier this year. Since its initial public offering in February, the stock has tumbled more than 58%. Analyst Mike Stewart at Shore Capital today upgraded the stock to 'hold' on the belief that it is now trading at fair value. |
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| | Market Movers
techMARK 2,675.86 +0.78%
FTSE 100 6,392.68 +0.42%
FTSE 250 14,669.76 +0.86% FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 339.60p +4.78%
Johnson Matthey (JMAT) 2,876.00p +4.39%
ARM Holdings (ARM) 853.00p +3.77%
Sports Direct International (SPD) 593.50p +3.22%
Weir Group (WEIR) 2,213.00p +2.69%
Carnival (CCL) 2,213.00p +2.69%
Anglo American (AAL) 1,423.00p +2.52%
IMI (IMI) 1,163.00p +2.47%
Rio Tinto (RIO) 3,163.50p +2.38%
Rolls-Royce Holdings (RR.) 957.50p +2.19%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,425.00p -3.65%
Tullow Oil (TLW) 518.50p -2.08%
BG Group (BG.) 1,025.00p -1.44%
BP (BP.) 426.65p -1.23%
Standard Chartered (STAN) 1,086.00p -1.23%
Pearson (PSON) 1,137.00p -0.87%
Royal Dutch Shell 'A' (RDSA) 2,174.00p -0.84%
Royal Bank of Scotland Group (RBS) 357.80p -0.75%
Barclays (BARC) 222.00p -0.63%
Direct Line Insurance Group (DLG) 273.60p -0.58%
FTSE 250 - Risers
AO World (AO.) 166.30p +7.99%
Spirent Communications (SPT) 76.00p +5.56%
Bellway (BWY) 1,565.00p +5.53%
Centamin (DI) (CEY) 59.35p +5.04%
Brown (N.) Group (BWNG) 300.90p +4.99%
Computacenter (CCC) 615.50p +4.41%
Wetherspoon (J.D.) (JDW) 784.50p +4.39%
Moneysupermarket.com Group (MONY) 188.30p +4.15%
Kazakhmys (KAZ) 255.00p +4.04%
Northgate (NTG) 467.00p +3.78%
FTSE 250 - Fallers
Michael Page International (MPI) 383.90p -7.63%
Infinis Energy (INFI) 216.00p -4.42%
Balfour Beatty (BBY) 148.70p -3.25%
COLT Group SA (COLT) 119.00p -2.62%
Hellermanntyton Group (HTY) 283.00p -2.51%
Essentra (ESNT) 681.00p -2.44%
Cairn Energy (CNE) 160.90p -2.07%
Ashmore Group (ASHM) 295.30p -2.02%
Poundland Group (PLND) 306.00p -1.92% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks end higher ahead of batch of data European stocks finished Tuesday’s session higher as investors prepared for a slate of economic data releases in the day ahead. Chinese inflation, German inflation, UK jobs and US retail sales figures will pack Wednesday’s session. European Central Bank President Mario Draghi will also speak in Frankfurt as the monetary authority comes under scrutiny amid low inflation and a weak economy. Highlighting the struggles of the Eurozone, was a report on Tuesday showing a bigger-than-forecast fall in German economic confidence. The ZEW Center for European Economic Research index of investor and analyst expectations in Germany fell to -3.6 from 6.9 in September. Analysts had predicted a reading of 0. “The ZEW highlights that latest sell-off in European equity markets in response to bad economic data from Germany for August risks reinforcing the confidence hit which like in a game of domino has spread from German investors via German manufacturing to German consumers and the rest of the Eurozone throughout this year,” said Berenberg analyst Christian Schulz. ZEW also released its economic confidence index for the Eurozone which dropped to 4.1 in October from 14.2 a month earlier. Against this backdrop, the German government cut its economic growth forecast on a declining outlook for German exports. Germany expects its economy to grow by 1.2% this year and by 1.3% in 2015, marking compared to an April forecast of 1.8% and 2%, the Economy Ministry said. In the UK, inflation fell to 1.2% year-on-year in September from 1.5% a month earlier, surprising analysts who had expected a drop to 1.4%. The slowdown was driven mostly by air fares and oil prices which come off the back of the crises in the Middle East and the Ebola virus. “September’s sharp fall in consumer price inflation supports those members of the Monetary Policy Committee arguing that there is still no hurry to raise interest rates,” Capital Economicssaid. The Bank of England, which is targeting inflation of 2%, last week decided to keep interest rates at 0.5%. On Monday Governor Mark Carney highlighted that the central bank had taken the recent dip in inflation into consideration. In Greece, the 10-year yield rose above 7% for the first time since March as euro-area finance ministers bumped heads with the nation’s leaders over calls to end a bailout programme. Burberry, Michael Page Burberry edged lower after the UK fashion company forecast downward pressure on retail and wholesale margins. Recruitment firm Michael Page International slumped after saying full-year profit will fall short of analysts’ estimates. Iliad gained as it pulled a plan to buy a majority stake in T-Mobile US. SABMiller declined as the UK brewer reported a rise in half-year revenue that missed expectations. Daimler advanced after luxury car maker said its cash flow from industrial operations jumped 80% in the third quarter. The euro tumbled 0.73% to $1.2659. Brent crude futures slipped 1.89% to $87.24. |
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| | US Market Report | | US open: Markets rally for the first time in three days US stocks rallied on Tuesday as better than expected earnings from Citigroup and Johnson & Johnson turned markets positive for the first time in four days.
There was mixed data from Europe, with UK inflation slowing to a five-year low, while the German government cut its economic forecasts for this year and next. Consumer prices fell in Sweden and Spain.
"Following a sharp decline to indices at the close of US equities on Monday night, prices have once again stabilised for the time being," said David White, financial trader at Spreadex.
"The extent to which global growth concerns are being played out in prices currently shows just how vulnerable the market is to the idea of equities being overvalued.
"This could be a relatively normal stage in this bull-run, where investors seek to re-balance based on anxiety. This in itself could help to promote the longevity of performance for equities by removing some of the so-called froth.
In equity markets' favour, the S&P 500 has still to confirm the loss of its so-called 200-day moving average and is well inside 'oversold' territory, as technical analysts would say.
In corporate news, Johnson & Johnson rose early on after its third quarter results exceeded estimates and the firm raised its full year estimates, while Citigroup gained as much as 2.5% as lending improved and bond-trading revenue increased.
Wells Fargo & Co. slipped even though the bank's revenues beat estimates and quarterly profit was on target, while JP Morgan swung to a third quarter profit, but shares fell as the banking giant's revenue and profits per share missed expectations.
Versar surged as fears over an Ebola outbreak continue to grow, though Lakeland Industries and Alpha Pro Tech plummeted over 20% after soaring over the last couple of days in the wake of Ebola-related panic.
Domino's Pizza rose sharply after delivering better than expected results.
Apple is bouncing back after having slipped earlier on the heels of the Irish government's announcement that it will move to close some of its corporate-tax loopholes.
The yield on the 10-year Treasury note dropped six basis points to 2.23%, while the yield on the 30-year Treasury bond fell four basis points to 2.98 and the yield on the five-year note shed eight basis points to 1.46.
Gold futures edged forward a little, while the price of West Texas intermediate crude continued to fall, losing almost two percentage points and trading at just over $84 a barrel. |
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| | Broker Tips | | Broker tips: Burberry, Hargreaves Lansdown, SABMiller, BSkyB The Share Centre has repeated its 'buy' stance on Burberry despite the luxury fashion group's gloomy outlook which sunk shares on Tuesday.
There are short-term challenges, analyst Helal Miah admitted, but "we believe there are solid grounds for optimism". He said that the "sheer scale" of the middle class in the Far East should underpin demand for luxury companies, while exports should be boosted with a recovery in global economic growth and a weaker pound.
Financial services group Hargreaves Lansdown is still worth a 'buy' for its long-run prospects, but the short-term outlook is less certain, according to Peel Hunt.
"We continue to believe that the strength of Hargreaves' offering will help it retain its leading market position, albeit that revenue trends in the short - term remain more challenging. "We retain our 'buy' recommendation, although we recognise the negative sentiment in the short - term," the broker said.
Consensus forecasts for SABMiller "might come under a little pressure", according to Numis Securities, after a trading update from the beverages group showed weakness in the Asia Pacific region.
Nevertheless, the broker maintained its 'buy' recommendation and 4,100p target for the stock. The broker kept its upbeat stance, saying that the company could now be considered to be "in play" with regards to M&A.
Berenberg has recommended investors to 'sell' shares of British Sky Broadcasting ahead of the broadband and pay-TV group's first-quarter results on Thursday. | | |
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