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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 open: Shire leads UK stocks lower as investors watch data Weak inflation data in China and Germany reignited fears about a global economic slowdown on Wednesday, pushing UK stocks sharply lower in morning trade.
The FTSE 100 was down 0.8% at 6,341 in early deals, with the share price of Shire plummeting after the news that Abbvie is reconsidering its takeover offer.
The annual rate of Chinese consumer price inflation fell near to a five-year low of 1.6% in September from 2% a month earlier, showing that domestic demand still remains weak. However, it has raised hopes that the government will step in with further stimulus to avert a slowdown.
Closer to home, the German consumer price index (CPI) remained at 0.8% year-on-year in September as expected, with prices actually unchanged when compared with August 2014. "Germany's CPI continuing to flat-line add[s] to deflationary and recessionary concerns in the Eurozone," said Mike van Dulken, head of research at Accendo Markets.
UK employment data is forecast to show jobless claims fell 35,000 in September and the unemployment rate dropped to 6.1% in August from 6.2% in July. Employers are forecast to have added 30,000 jobs in the three months to August, while weekly earnings are expected to have risen 0.8% over the period.
Stateside, a report on US retail sales will be in focus with analysts projecting a 0.1% drop in September. Consumer spending is a major contributor to gross domestic product in the world's biggest economy.
Shire sinks as Abbvie hopes fade
After US drugmaker Abbvie on Tuesday night said it was reconsidering its takeover of Shire, the UK company has pointed out it would be due a break fee of roughly $1.64bn if the deal falls through. However, that didn't stop the latter's shares from sinking by nearly 30% early on.
Chip designer Qualcomm will acquire UK-listed rival CSR for 900p a share or £1.56bn, causing shares in the latter to surge.
Engineering firm Weir was on the up after saying it is expanding its product offering in the minerals market with the $220m acquisition of Trio, a crushing and separation equipment business.
Infrastructure group Balfour Beatty saw its share price jump after appointing Qinetiq's chief executive officer Leo Quinn to take up the same position on its own board, starting at the beginning of 2015. Quinn has spent five years at Qinetiq, whose share price was sharply lower on Wednesday.
Mining stocks were mostly weaker in morning trade, including Fresnillo and Rio Tinto after poorly-received production upgrades. Mexican precious metals group Fresnillo said that silver production was flat over the third quarter but the output of gold slipped, while Rio Tinto underwhelmed with a record third quarter for its iron ore operations, though it left its guidance unchanged.
Travel and leisure stocks, which had been hammered as of late by concerns about the spread of Ebola, were putting in decent gains, including Easyjet, IAG, TUI Travel, Carnival and Intercontinental Hotels. |
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| Market Movers
techMARK 2,627.40 -1.81%
FTSE 100 6,340.68 -0.81%
FTSE 250 14,747.64 +0.53%
FTSE 100 - Risers
easyJet (EZJ) 1,407.00p +3.30%
International Consolidated Airlines Group SA (CDI) (IAG) 349.10p +2.80%
TUI Travel (TT.) 345.10p +2.22%
Carnival (CCL) 2,255.00p +1.90%
Morrison (Wm) Supermarkets (MRW) 158.80p +1.47%
Hargreaves Lansdown (HL.) 882.00p +1.15%
InterContinental Hotels Group (IHG) 2,194.00p +1.15%
Whitbread (WTB) 4,045.00p +1.12%
Kingfisher (KGF) 294.10p +1.10%
Severn Trent (SVT) 1,940.00p +1.09%
FTSE 100 - Fallers
Shire Plc (SHP) 3,788.00p -26.30%
AstraZeneca (AZN) 4,231.50p -3.97%
Smith & Nephew (SN.) 944.50p -3.03%
Randgold Resources Ltd. (RRS) 4,282.00p -1.97%
Royal Dutch Shell 'A' (RDSA) 2,138.00p -1.66%
Fresnillo (FRES) 777.50p -1.64%
Tullow Oil (TLW) 511.00p -1.45%
Royal Dutch Shell 'B' (RDSB) 2,225.00p -1.40%
Rio Tinto (RIO) 3,125.50p -1.20%
Glencore (GLEN) 322.40p -1.15%
FTSE 250 - Risers
CSR (CSR) 866.00p +31.51%
Balfour Beatty (BBY) 168.20p +13.11%
Hochschild Mining (HOC) 127.90p +5.09%
Thomas Cook Group (TCG) 108.10p +3.84%
Aveva Group (AVV) 1,413.00p +3.59%
Millennium & Copthorne Hotels (MLC) 570.50p +3.16%
Ocado Group (OCDO) 231.00p +3.03%
Countrywide (CWD) 479.80p +2.74%
Diploma (DPLM) 675.00p +2.58%
FirstGroup (FGP) 111.20p +2.39%
FTSE 250 - Fallers
QinetiQ Group (QQ.) 199.40p -8.87%
Afren (AFR) 96.25p -4.61%
Synergy Health (SYR) 1,745.00p -4.12%
EnQuest (ENQ) 83.95p -2.21%
African Barrick Gold (ABG) 198.60p -2.17%
Centamin (DI) (CEY) 58.40p -1.60%
Worldwide Healthcare Trust (WWH) 1,387.00p -1.42%
Hunting (HTG) 765.50p -1.42%
Ted Baker (TED) 1,833.00p -1.19% |
| | UK Event Calendar | | Wednesday 15 October
INTERIMS
Datatec Ltd. (DI), Vertu Motors
INTERIM DIVIDEND PAYMENT DATE
Belvoir Lettings, Chesnara, Dairy Farm International Holdings Ltd. (Singapore), Hellermanntyton Group, Hongkong Land Holding Ltd. (Sing.Reg), IDOX, Jardine Matheson Holdings Ltd (Singapore Reg), Jardine Matheson Holdings Ltd. (Bermuda), Jardine Matheson Holdings Ltd. (Jersey), Jardine Strategic Holdingd Ltd. (Bermuda), Jardine Strategic Holdingd Ltd. (Singapore), Mandarin Oriental International (Singapore), Neptune-Calculus Income & Growth VCT, New Europe Property Investments, Stilo International, UTV Media
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Beige Book Fed Survey (US) (19:00)
Business Inventories (US) (13:30)
Consumer Price Index (GER) (07:00)
Manufacturing Inventories (US) (15:00)
MBA Mortgage Applications (US) (12:00)
Producer Price Index (US) (13:30)
Retail Sales (US) (13:45)
Retail Sales Inventories (US) (15:15)
GMS
Premier Foods
FINALS
Animalcare Group, Connect Group, Imperial Innovations Group
DRILLING REPORT
Fresnillo, Rio Tinto
UK ECONOMIC ANNOUNCEMENTS
Claimant Count Rate (09:30)
Unemployment Rate (09:30)
FINAL DIVIDEND PAYMENT DATE
Accumuli , HML Holdings |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Bigger-than-expected fall in Chinese inflation drags stocks lower European stocks declined as Chinese inflation fell more than expected, raising fears about the health of the world's second largest economy. China's consumer price index declined to 1.6% in September from 2% a month earlier, compared to analysts' estimates of 1.7%. The drop was driven by lower commodity prices and food inflation. Inflation has now fallen to its lowest levels since January 2010.
"Although today's inflation data suggest that broad price pressures remain subdued, we aren't yet concerned about deflation risks," said Capital Economics.
"Looking ahead, we expect broad price pressures to remain subdued. That said, consumer price inflation remains highly sensitive to pork prices, which look set to rise on the back of the fall in pig stocks since the start of the year. As such, we still expect inflation to edge up again over the coming quarters, though it is unlikely pick-up enough to become a policy concern."
In Europe, a report on German inflation is tipped to confirm consumer prices at 0.8% in September as the European Central Bank (ECB) comes under pressure to address price instability and a stagnant recovery in the Eurozone.
ECB President Mario Draghi will speak in Frankfurt at 8:00 London time, potentially shedding further insight into the monetary authority's next move.
The ECB recently announced its asset backed securities and covered bonds programme but some analysts remain sceptical that it will make much of a difference.
UK employment data is forecast to show jobless claims fell 35,000 in September and the unemployment rate dropped to 6.1% in August from 6.2% in July.
Employers may have added 30,000 jobs in the three months to August, economists predict. Weekly earnings are expected to have risen 0.8% over the period.
The Bank of England has been keeping its eye on the health of the jobs market in making its policy decisions, including the timing of an interest rate rise.
In the US, a report on retail sales will be in focus with analysts projecting a 0.1% drop in September. Consumer spending is a major contributor to gross domestic product in the world's biggest economy.
The Federal Reserve also releases its Beige Book report of regional anecdotal information about the US economy.
Company-wise Shire tumbled after AbbVie said its board will reconsider a recommendation to shareholders to back its purchase of the UK drugmaker.
Danone advanced after the yogurt maker posted third-quarter sales that beat forecasts.
SML Holding gained after predicting growth early next year.
The euro fell 0.08% to $1.2648. |
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| | US Market Report | | US close: Market rebound loses momentum as crude plummets On Tuesday, US stocks rallied earlier on but the rebound faded towards the end of the session as energy shares slid with the price of oil dropping over four percentage points. The Dow Jones Industrial Average closed 2.99 down to 16,318.08 points, while the S&P 500 gained 3.03 to 1,877.74 points and the Nasdaq gained 13.52 to 4,227.17 points.
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 dropped 2.13% even though its third quarter results exceeded estimates and the firm raised its full year estimates, while Citigroup gained 3.1% as lending improved and bond-trading revenue increased.
Wells Fargo & Co. slipped 2.73% 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 0.29% as the banking giant's revenue and profits per share missed expectations.
Versar surged 16.67% as fears over an Ebola outbreak continued to grow, though Lakeland Industries, which has risen274% this year, and Alpha Pro Tech both plummeted over 26% after soaring over the last couple of days in the wake of Ebola-related panic.
Domino's Pizza leaped 11.33% after delivering better than expected results, while Intel rose 3% after its result beat estimates
Apple dropped 1.6% 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 eight basis points to 2.20%, while the yield on the 30-year Treasury bond fell six basis points to 2.96 and the yield on the five-year note shed nine basis points to 1.45.
Gold futures edged forward a little, while the price of West Texas intermediate crude continued to fall, losing over four percentage points and closing at just under $82 a barrel.
The dollar moved up against the pound and the euro but was in retreat against the yen.
S&P 500 - Risers
Delta Airlines Inc. (DAL) $32.79 +6.12%
Peabody Energy Corp. (BTU) $10.80 +4.85%
Textron Inc. (TXT) $33.83 +4.80%
Diamond Offshore Drilling Inc. (DO) $37.99 +4.57%
Coach Inc. (COH) $35.62 +4.43%
Borg Warner Inc. (BWA) $52.44 +4.38%
Avago Technologies Ltd. (AVGO) $72.02 +4.32%
Harman International Industries Inc. (HAR) $89.01 +4.28%
Southwest Airlines Co. (LUV) $30.00 +3.88%
Ryder System Inc. (R) $80.19 +3.74%
S&P 500 - Fallers
Newfield Exploration Co (NFX) $26.27 -5.67%
QEP Resources Inc (QEP) $21.96 -4.69%
Tyco International Ltd (TYC) $39.69 -4.45%
Nabors Industries Ltd. (NBR) $16.82 -4.27%
Gilead Sciences Inc. (GILD) $97.18 -4.20%
Archer-Daniels-Midland Co. (ADM) $43.08 -3.75%
NRG Energy Inc. (NRG) $28.12 -3.47%
Autodesk Inc. (ADSK) $50.17 -3.41%
Phillips 66 Common Stock (PSX) $70.59 -3.37%
Aetna Inc. (AET) $73.98 -3.21%
Dow Jones I.A - Risers
Intel Corp. (INTC) $32.14 +2.13%
Boeing Co. (BA) $122.29 +1.53%
Caterpillar Inc. (CAT) $92.80 +1.22%
3M Co. (MMM) $134.18 +0.96%
United Technologies Corp. (UTX) $100.12 +0.82%
General Electric Co. (GE) $24.10 +0.63%
Cisco Systems Inc. (CSCO) $23.06 +0.55%
Wal-Mart Stores Inc. (WMT) $77.98 +0.54%
McDonald's Corp. (MCD) $91.10 +0.41%
Merck & Co. Inc. (MRK) $56.33 +0.34%
Dow Jones I.A - Fallers
Johnson & Johnson (JNJ) $97.01 -2.13%
Chevron Corp. (CVX) $109.78 -2.01%
Unitedhealth Group Inc. (UNH) $82.82 -1.35%
Coca-Cola Co. (KO) $43.64 -0.98%
Visa Inc. (V) $202.72 -0.76%
Home Depot Inc. (HD) $90.10 -0.55%
Nike Inc. (NKE) $85.09 -0.35%
Exxon Mobil Corp. (XOM) $90.55 -0.32%
Verizon Communications Inc. (VZ) $48.22 -0.31%
JP Morgan Chase & Co. (JPM) $57.99 -0.29%
Nasdaq 100 - Risers
Nxp Semiconductors Nv (NXPI) $56.58 +4.97%
Avago Technologies Ltd. (AVGO) $72.02 +4.32%
CH Robinson Worldwide Inc (CHRW) $65.58 +3.37%
Garmin Ltd. (GRMN) $50.79 +2.92%
PACCAR Inc. (PCAR) $57.07 +2.66%
Expeditors International Of Washington Inc. (EXPD) $39.22 +2.64%
Netflix Inc. (NFLX) $449.05 +2.39%
Nvidia Corp. (NVDA) $17.17 +2.32%
Applied Materials Inc. (AMAT) $19.34 +2.25%
Intel Corp. (INTC) $32.14 +2.13%
Nasdaq 100 - Fallers
Gilead Sciences Inc. (GILD) $97.18 -4.20%
Autodesk Inc. (ADSK) $50.17 -3.41%
Expedia Inc. (EXPE) $74.75 -2.08%
Alexion Pharmaceuticals Inc. (ALXN) $159.46 -2.03%
Mylan Inc. (MYL) $46.82 -1.72%
Vertex Pharmaceuticals Inc. (VRTX) $104.26 -1.56%
Adobe Systems Inc. (ADBE) $60.88 -1.30%
Dish Network Corp. (DISH) $58.86 -1.26%
Regeneron Pharmaceuticals Inc. (REGN) $328.07 -1.21% |
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| | Newspaper Round Up | | Wednesday newspaper round-up: Shire, Ebola, Oil demand US pharmaceutical giant Abbvie is having second thoughts regarding its planned $54bn acquisition of London-listed rival Shire. The company has announced that its board will meet by next week to reconsider the proposed deal in light of the US Treasury's new rules regarding the takeover of foreign companies, often for the purpose of lowering their taxes.
The transaction would have created one of the world's largest drug companies and, if scuppered, would constitute the biggest deal yet to have been torpedoed by the White House's crackdown, writes The Financial Times.
The World Health Organisation (WHO) has warned that Ebola's mortality rate has risen to 70%, the Guardian reported on Wednesday.
WHO said the outbreak could grow to be within 5,000 to 10,000 new cases a week by early December and that a bigger capacity on the ground was needed to manage the caseload, particularly in West Africa, where the virus has killed over 4,000 people.
"The virus is still moving geographically and escalating in the capitals," Dr Bruce Aylward, the WHO assistant director-general, told a news conference in Geneva, warning that the virus' mortality rate was particularly high.
"This is a high mortality disease in any circumstances but particularly in these places," he said.
The International Energy Agency (IEA) has cut its oil demand forecast by 250,000 barrels a day on "reduced expectations of economic growth", the Financial Times reported on Wednesday.
A decline in oil demand has pushed the price of crude to its lowest level in the last four years and IEA's decision to cut demand forecast suggests that demand will grow at its slowest pace since 2009.
The IEA added it did not expect the Organization Of Petroleum Exporting Countries (Opec) to cut supply when it meets next month, despite calls from some members of the organisation for limitations to be placed on the output of oil.
The Bank of International Settlements (BIS) has warned that the global financial markets are dangerously stretched and could unravel rapidly as liquidity dries up, The Daily Telegraph reported on Wednesday.
The head of the BIS's market committee, Guy Debelle, claimed investors have become far too complacent, as they wrongly believe to be protected by central bans and commit to investments that are likely to "blow up" as the first sign of economic downturn.
"The sell-off, particularly in fixed income, could be relatively violent when it comes. There are a number of investors buying assets on the presumption of a level of liquidity which is not there," Debelle said.
The decision taken by Saudi Arabia's oil minister to allow crude prices to decline has met with scathing criticism from Saudi Prince Alwaleed bin Talal. He described the decision as potential catastrophic for the economy of that Middle Eastern Kingdom.
The rebuke came in a letter first reported by the FT and marks a significant attack on minister Ali bin Ibrahim Al-Naimi. | | |
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