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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: FTSE ends higher ahead of Fed meeting result Investors showed a degree of confidence in the Wednesday session as markets awaited the outcome of the latest Federal Open Market Committee (FOMC) meeting.
Steady gains were seen throughout much of the session, with a slight weakening towards the close, although the Footsie ultimately closed up 51.7 points at 6,453.87.
"There was an underlying confidence in European trading today in the expectation that despite ending its quantitative easing programme the Federal Reserve will keep monetary policy accommodative for a considerable period of time," said CMC market analyst Jasper Lawler.
To some extent, the meeting distracted traders from the bigger-than-expected slowdown in UK mortgage approvals and a profit warning from Next.
Total lending to individuals rose by £2.7bn or 0.2% month-on-month in September, to reach £1.46trn according to the Bank of England, while total mortgage lending was higher by 0.1% over the same month, or £1.8bn, hitting 1,294bn.
However, the number of mortgage approvals for home purchase slipped to 61,267 - a 16-month low - from the 64,054 seen in the previous month, below the 62,000 forecast by economists.
"The new mortgage regulations implemented by the Bank of England have cut some prospective buyers out of the market and limited others in the size of the mortgage that's obtainable [which] has tipped the balance a little between buyers and sellers and house prices have come down accordingly since the summer," Lawler explained.
"For now the slowdown in UK mortgages given would appear to be directly related to new regulations on lenders, but if the economic recovery continues to cool and house prices continue to slip then the slowdown in mortgages could reflect a genuine decrease in demand for housing."
JP Morgan comments lift Intertek
JP Morgan analysts reiterated their 'overweight' recommendation on shares of testing services firm Intertek following a sales meeting with the company's chief executive officer, Wolfhart Hauser, the previous afternoon.
"It was an interesting meeting and it seemed to us that, after a weak first half, trading should improve somewhat in the second half and then into next year," the analysts said.
TUI Travel shares also moved firmly higher after the majority of its shareholders approved the merger with TUI AG.
Tesco rose despite the news the Serious Fraud Office will begin an investigation into its profit misstatement.
Meanwhile, Royal Mail declined after Credit Suisse reiterated its 'underperform' rating.
Capita declined after missing out on Ministry of Justice contracts after FTSE 250 group Interserve became the only UK-listed group to be named as a preferred bidder. Capita had placed bids for five contracts.
A profit warnings from Next hit fellow retailers Marks & Spencer and Supergroup, although Next itself came off its intra-day low to end the day with minimal losses.
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techMARK 2,734.44 +0.95%
FTSE 100 6,453.87 +0.81%
FTSE 250 15,234.14 +0.73%
FTSE 100 - Risers
Intertek Group (ITRK) 2,709.00p +5.08%
TUI Travel (TT.) 395.40p +3.32%
IMI (IMI) 1,204.00p +2.56%
Experian (EXPN) 946.50p +2.38%
Sainsbury (J) (SBRY) 250.60p +2.16%
Old Mutual (OML) 190.00p +2.15%
Tesco (TSCO) 173.35p +2.09%
Imperial Tobacco Group (IMT) 2,645.00p +2.04%
Rolls-Royce Holdings (RR.) 802.00p +2.04%
Aberdeen Asset Management (ADN) 421.50p +2.01%
FTSE 100 - Fallers
Capita (CPI) 1,082.00p -6.48%
Royal Mail (RMG) 437.70p -3.44%
International Consolidated Airlines Group SA (CDI) (IAG) 385.20p -2.48%
Rio Tinto (RIO) 2,986.50p -1.22%
Barclays (BARC) 220.50p -1.12%
Fresnillo (FRES) 749.00p -1.12%
St James's Place (STJ) 688.00p -1.01%
CRH (CRH) 1,362.00p -0.95%
Whitbread (WTB) 4,286.00p -0.88%
Marks & Spencer Group (MKS) 404.00p -0.64%
FTSE 250 - Risers
Saga (SAGA) 160.00p +5.61%
Genus (GNS) 1,251.00p +5.30%
IP Group (IPO) 199.90p +4.93%
COLT Group SA (COLT) 130.90p +3.89%
Booker Group (BOK) 136.70p +3.80%
Ferrexpo (FXPO) 89.65p +3.58%
Pets at Home Group (PETS) 194.60p +3.51%
Serco Group (SRP) 297.60p +3.41%
Spectris (SXS) 1,767.00p +3.33%
Interserve (IRV) 614.50p +3.28%
FTSE 250 - Fallers
Playtech (PTEC) 708.00p -4.26%
Supergroup (SGP) 889.00p -3.58%
Countrywide (CWD) 450.70p -3.08%
Balfour Beatty (BBY) 154.60p -2.46%
PayPoint (PAY) 866.00p -2.15%
Spire Healthcare Group (SPI) 275.00p -1.79%
Evraz (EVR) 129.80p -1.67%
SSP Group (SSPG) 239.40p -1.64%
Infinis Energy (INFI) 213.10p -1.57%
TSB Banking Group (TSB) 261.50p -1.51% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed ahead of FOMC decision European stocks were little changed as the market braced for the latest policy decision by the Federal Reserve.
The Federal Open Market Committee (FOMC) is expected to end its monthly bond purchase programme but keep interest rates unchanged at 0.25%. The Fed has vowed to keep interest rates low for a considerable time.
"There was an underlying confidence in European trading today in the expectation that despite ending its quantitative easing program the FederalReserve will keep monetary policy accommodative for a considerable period of time," said CMC Markets analyst Jasper Lawler.
In the euro-area, the European Central Bank's (ECB) lending survey showed banks reported a net easing of credit conditions in the third quarter.
"For the second time in a row, a small net percentage of euro area banks (3%, after 2% in the previous quarter) reported an easing of credit standards on loans to enterprises, as compared with an overall tightening in the period from mid-2007 to early 2014," the ECB revealed.
Deutsche Bank, Total
Deutsche Bank declined as the German lender swung to a loss in the third quarter, reflecting legal costs.
Total SA advanced after news chief executive Patrick Pouyanne said he'll continue slashing costs after reporting a slowdown in third quarter profits.
STMicroelectronics NV dropped as Europe's largest semiconductor maker said fourth-quarter sales will fall around 3.5% from the previous period due to weaker demand.
TUI gained after the shareholders of TUI Travel Plc approved proposed merger terms for the two companies.
Fiat Chrysler jumped on news the company plans to spin off Ferrari.
The euro rose 0.16% to $1.2754.
Oil prices not a concern, says OPEC
Speaking from the London Oil&Money conference OPEC Secretary General Abdalla Salem el-Badri signalled the cartel does not have the intention of cutting its output anytime soon.
He also seems to have stated quite clearly that OPEC is, at least in part, taking aim at the US shale industry.
He added that the recent drop in oil prices was not a major concern. |
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| | US Market Report | | US open: Markets fluctuate ahead of Fed's decision US stocks fluctuated on Wednesday, as investors awaited a decision from the Federal Open Market Committee that is expected to end the Fed's bond-buying program. At 10:06: in New York, the Dow Jones Industrial Average was 40.45 points up to 17,046.20, while the S&P 500 was 2.74 higher at 1,987.79 and the Nasdaq was 10.10 points down to 4,096.529.
Federal Reserve officials will meet at 2pm Eastern Time (4pm GMT) and are expected to announce the end of the bond-buying program. Yet traders were adopting a more bullish approach early on Wednesday, as they anticipated the Fed would be dovish in its forward guidance.
In corporate news, Facebook shares dropped sharply as investors showed concern over the firm's operating costs, even though the social media outfit's quarterly results exceeded estimates on Tuesday.
Electronic Arts rose sharply on the heels of its results, while US Steel and Marriott International both advanced after delivering better-than-expected results and Goodyear shares rose steadily.
The tyre-maker reported lower third-quarter financial results as taxes and exchange rate headwinds limited profitability, though it beat analyst expectations and generated a profit in Latin America despite the economic turmoil in the region.
InvenSense plummeted over 20% after the sensor firm fell well short of its targets, while Orbital Sciences dropped over 10% before the bell after one of the company's rockets exploded soon after lift-off on Tuesday.
Alibaba surpassed Wal-Mart in terms of market capitalisation but that did not stop shares from retreating slightly, while Twitter slid further back as a result analysts' downgrades on Tuesday.
The dollar advanced slightly against the pound but fell against the euro and the yen, while gold futures slipped marginally to reach $1,224.00.
West Texas intermediate and Brent crude futures both took small steps forward, trading at just over $82 and just over $87 a barrel respectively. |
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| | Broker Tips | | Broker tips: Intertek, Next, StanChart JP Morgan on Wednesday analysts Robert Plant, Chris Gallagher and Jolyon Wellington reiterated their 'overweight' recommendation on shares of testing services firm Intertek. That followed a meeting with the company's chief executive officer, Wolfhart Hauser, on Tuesday afternoon.
"It was an interesting meeting and it seemed to us that, after a weak first half, trading should improve somewhat in the second half and then into next year," the analysts said.
Management reiterated its revenue guidance from the first half results presentation, saying the outlook for the second half was better and they expect growth in the range of between 2% and 3%.
Nevertheless, the chemicals division is expected to still see a decline in the second half of this year, but to then flatten out in 2015 and subsequently improve in 2016.
As for the more subdued outlook for minerals at Intertek than at rival SGS, the broker pointed out the fact that the two companies have different product and geographic exposures. Intertek was also especially affected by the nickel export ban in Indonesia.
Lastly, JP Morgan emphasised how the business appears to have become more cyclical over the last decade, as the more stable prototype testing business's share of revenues has decreased from 90% of revenues to 60%. In parallel, the company has been expanding into more cyclical minerals testing within the commodities division and energy infrastructure within Industry & Assurance.
Unfortunately, fashion retailer Next is not due to hold a press conference call following Wednesday's disappointing figures, writes Brewin Dolphin's Nicla di Palma.
The company reported sales for the third quarter which were higher by 5.4%, well below the 10% which management had been expecting. Executives at the firm blamed "unseasonably warm weather" for the results.
Indeed, people are not in the mood to buy winter clothes. That observation is consistent with the general commentary coming out of the retail sector. However, analysts at the broker are concerned that the company cannot continue to grow at double digit rates given the size which it has already reached - with a market a share of 7.5% in the UK.
Smaller more nimbler players such as Ted Baker, on the other hand, registered strong growth despite the spell of warm weather.
Broker Charles Stanley has lowered its recommendation on shares of Standard Chartered to 'hold'.
That follows the "stark" reversal by management on its outlook for underlying profits in the second half of the year. Just a few months ago it had been saying that momentum was ahead of that seen in the second half of 2013.
"With this latest disappointment, management have a lot to do to convince the market that these initiatives are not just further promises of "jam tomorrow," it said.
In a more positive vein, analyst Minal Shah pointed out the fact that management has ruled out the need for an equity issue, while also acknowledging the importance of the dividend to shareholders.
Furthermore, the shares are now trading at just one times historical book value, and offer a yield above 5%, in comparison to 1.3 times for HSBC, which has a similar yield.
That may mean that Tuesday's dislocation, on the heels of a weak quarter for "lumpy" corporate impairments, may offer a "good" entry point for a switch trade, Shah explained. | | |
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