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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: Investors still shaken after 'flash crash' in US Treasuries UK stocks attempted to claw their way back on Thursday, though early gains were quickly trimmed as shaky investors continued to tread nervously after a 'flash-crash' in US Treasury yields in the previous session. The FTSE 100 was trading just 0.1% higher at 6,218 in morning trade, but well below the intra-day high of 6,282.95 reached in early deals.
The benchmark index closed down 2.8% at a 15-month low of 6,211.64 on Wednesday.
Some market commentary holds that yesterday's price action in financial markets may reflect deep-seated unease regarding the real underlying strength of the global economy.
In fact, record trading was seen in US government debt according to ICAP data. Extreme positioning in US dollars and a lack of clarity around the Federal Reserve's communications were cited by some observers as additional factors which may have accentuated the volatility.
"European equities have woken up with a monumental hangover this morning," said dealer Jonathan Sudaria from Capital Spreads.
"It really was a complete rout in equity markets yesterday [...] This definitely contains a hint of panicking; the global economic situation simply does not warrant this much of a sell-off," he said.
US economic data will be in focus again on Thursday after retail-sales figures and New York manufacturing disappointed the previous session.
Jobless claims, industrial production, nationwide housing numbers and Philadelphia manufacturing data are all on the calendar, as well as speeches from key officials at the Federal Reserve.
Shire tumbles again, corporate updates impress
Shire, the pharmaceutical stock which dropped 22% on Wednesday after Abbvie said it was reconsidering its $54bn bid for the firm, was down at further 9% after the US group recommended shareholders vote against the takeover due to changes in the US tax law. Abbvie said that these changes had introduced "an unacceptable level of uncertainty" to the deal.
Paper and packaging group Mondi was also in positive territory after saying it traded in line with expectations in the third quarter, though profits were held back by planned maintenance shutdowns as expected.
Also higher was distribution and outsourcing firm Bunzl as its reported that third-quarter revenue increased 6% on a constant exchange rate basis as acquisitions came on stream.
Spirits group Diageo saw sales fall in its first quarter, but reassured investors by expressing optimism that its full-year top line would still improve on last year.
British Sky Broadcasting was subdued early on despite saying it made a strong start to the year, with profits ahead of expectations in the first quarter as subscriptions surged.
Mining titan BHP Billiton, which in the summer announced plans to de-merge $14bn of its non-core assets, gained after confirming that it will pursue a London flotation for the spin-off company.
Plumbers and builders merchant Wolseley was in the red after going ex-dividend. |
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| Market Movers
techMARK 2,574.72 -0.47%
FTSE 100 6,217.73 +0.10%
FTSE 250 14,407.40 -0.13%
FTSE 100 - Risers
Ashtead Group (AHT) 909.00p +1.79%
Antofagasta (ANTO) 677.00p +1.65%
Randgold Resources Ltd. (RRS) 4,390.00p +1.57%
HSBC Holdings (HSBA) 625.90p +1.44%
Weir Group (WEIR) 2,150.00p +1.42%
ARM Holdings (ARM) 841.00p +1.20%
BG Group (BG.) 1,027.00p +1.18%
United Utilities Group (UU.) 808.00p +1.13%
Meggitt (MGGT) 428.70p +1.13%
Compass Group (CPG) 948.00p +1.07%
FTSE 100 - Fallers
Shire Plc (SHP) 3,639.00p -9.30%
Carnival (CCL) 2,158.00p -1.86%
Intertek Group (ITRK) 2,406.00p -1.51%
CRH (CRH) 1,262.00p -1.10%
easyJet (EZJ) 1,339.00p -0.96%
Capita (CPI) 1,104.00p -0.90%
Aggreko (AGK) 1,440.00p -0.83%
Royal Mail (RMG) 404.20p -0.79%
Wolseley (WOS) 3,065.00p -0.74%
G4S (GFS) 243.30p -0.69%
FTSE 250 - Risers
Man Group (EMG) 113.60p +4.89%
Ted Baker (TED) 1,905.00p +3.81%
Synthomer (SYNT) 198.00p +3.66%
WH Smith (SMWH) 1,031.00p +3.57%
Spire Healthcare Group (SPI) 276.00p +2.37%
JD Sports Fashion (JD.) 429.30p +2.19%
Aveva Group (AVV) 1,400.00p +2.04%
Worldwide Healthcare Trust (WWH) 1,399.00p +1.89%
Zoopla Property Group (WI) (ZPLA) 200.40p +1.73%
Fidessa Group (FDSA) 2,147.00p +1.71%
FTSE 250 - Fallers
Just Eat (JE.) 247.50p -3.21%
Galliford Try (GFRD) 1,110.00p -3.14%
Close Brothers Group (CBG) 1,326.00p -2.86%
Enterprise Inns (ETI) 109.10p -2.59%
Just Retirement Group (JRG) 121.30p -2.41%
Afren (AFR) 96.05p -2.29%
Supergroup (SGP) 1,010.00p -2.23%
Bodycote (BOY) 553.50p -2.21%
Pace (PIC) 289.40p -1.86% |
| | UK Event Calendar | | Thursday 16 October
INTERIMS
Booker Group, Lombard Risk Management
INTERIM DIVIDEND PAYMENT DATE
Macfarlane Group, Melrose Industries, PPHE Hotel Group Ltd, RPS Group
INTERIM EX-DIVIDEND DATE
Blackstar Group SE (DI), British Polythene Industries, Charles Taylor, Downing Planned Exit VCT 2011 (General A Shares), Downing Planned Exit VCT 2011 (General Shares), Downing Planned Exit VCT 2011 (Low Carbon Shares), Downing Planned Exit VCT 2011 (Structured A Shares), Downing Planned Exit VCT 2011 (Structured Shares), Investec Investment Trust 5% Cumulative Preference Stock 1, Kerry Group 'A' Shares, Learning Technologies Group , Manx Telecom , Mears Group, New Britain Palm Oil Ltd. (DI), Restore, Scisys, Smart Metering Systems, Spectris, Staffline Group, Ted Baker, TT Electronics, Walker Greenbank
QUARTERLY EX-DIVIDEND DATE
F&C Commercial Property Trust Ltd.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (EU) (10:00)
Capacity Utilisation (US) (16:15)
Consumer Price Index (EU) (10:00)
Continuing Claims (US) (13:30)
Crude Oil Inventories (US) (15:30)
Harmonised Index of Consumer Prices (EU) (10:00)
Industrial Production (US) (16:15)
Initial Jobless Claims (US) (13:30)
Philadelphia Fed Index (US) (15:00)
GMS
Bango, Octopus Titan VCT 1, Octopus Titan VCT 2, Octopus Titan VCT 3, Octopus Titan VCT 4, Octopus Titan VCT 5
FINALS
Avacta Group, Game Digital, WH Smith
IMSS
Bwin.party Digital Entertainment, Diageo, Evraz, Ferrexpo, Man Group, Mondi, Rank Group, Renishaw
SPECIAL EX-DIVIDEND PAYMENT DATE
TR European Growth Trust
EGMS
Zhejiang Expressway Co 'H' Shares
AGMS
Aberforth Geared Income Trust, Cambium Global Timberland Ltd., IG Group Holdings, Mattioli Woods, Meikles Ltd., Rank Group, Renishaw
TRADING ANNOUNCEMENTS
Evraz, Speedy Hire
FINAL DIVIDEND PAYMENT DATE
Standard Life UK Smaller Companies Trust
FINAL EX-DIVIDEND DATE
Avarae Global Coins, Clinigen Group, Close Brothers Group, Daejan Holdings, Galliford Try, Henderson EuroTrust, Redde, Strategic Equity Capital, TR European Growth Trust, Wilmington Group, Wolseley
Q1
British Sky Broadcasting Group |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks mixed as ECB reduces haircut on Greek bank collateral Stocks in the euro-area were little changed as the European Central Bank (ECB) allowed Greek banks to borrow more.
The ECB reduced the discount it applies the bonds Greek banks submit as collateral to borrow funds, which a Greek central bank official said would allow an additional €12bn of liquidity could be accessed by Greek banks.
"The move was decided late on Wednesday evening after talks between the government, the ECB and Greece's central bank governor," the official told Reuters.
Meanwhile, Credit Suisse said it remains "cautious" on the Greek banking sector due to risks including the impact of cheap ECB funding with debt securities. The bank said lenders were vulnerable to the possible impact of the ECB's repurchase agreement collateral becoming ineligible.
Analysts at the Swiss bank added that the market will remain uncomfortable with the outlook on politics after the vote to elect a president in February 2015.
"In addition, the asset quality review presents a more immediate short-term headwind. We see limited room for a relief rally after this is published due to the political uncertainties."
Elsewhere in the bloc, the EU has kicked off a two-week investigation of euro-area governments' draft budgets.
Data-wise, a report on inflation is expected to confirm consumer prices rose by 0.3%, well below the ECB's target of just under 2%.
The US will see the release of industrial and manufacturing production figures along with initial jobless claims data.
Companies
Nestle declined as the company reported a 4.5% increase in nine-month sales excluding acquisitions.
Shire dropped after AbbVie asked shareholders to vote against its takeover of the company.
Roche gained as the world's biggest maker of cancer drugs said third-quarter sales climbed 1.8% to 11.8bn Swiss francs, exceeding analysts' estimates.
Man Group rallied after the hedge-fund manager posted a 25% jump in assets under management in the third quarter.
The euro fell 0.33% to $1.2796. |
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| | US Market Report | | US close: Markets fall in volatile day of trade US stocks staged a late come-back on Wednesday, after plummeting earlier in the session, as concerns over the Eurozone economy and weak economic data weighed heavily on markets. The S&P 500 closed 15.19 down to 1,862.51 points, while the Dow Jones Industrial Average rebounded from a 460-point plunge but still fell 173.33 to 16,141.86 points and the Nasdaq dropped 11.85 to 4,215.32 points.
In Europe, German Bund yields fell to a record low on as fears over a deteriorating Eurozone economic outlook continued to mount, after another credit rating blow for France and "free falling" inflation expectations dominated the market.
On Wednesday, Commerce Department figures showed retail sales in the US fell more than expected in September, with a 0.3% decline exceeding the 0.2% fall estimated by estimates, following a 0.6% gain in August, the biggest increase in four months.
The producer price index for September fell 0.1% as opposed to expectations of a 0.1% gain.
Meanwhile, sales at automobile dealers fell 0.8%, the most since January, after a 1.9% increase the prior month.
According to data from Ward's Automotive Group, sales fell to a 16.3m annualised rate in September, its lowest level since April, from a 17.5m pace a month earlier that was the highest since January 2006.
In corporate news, Bank of America dropped 4.60% after reporting a third-quarter loss that was smaller than expected, while Abbvie Inc. shares rose 0.92% following a sharp fall in pre-market trading after the drug maker said it was reconsidering a $51bn deal to buy Shire, as the deal was made less appealing by a new set of rules introduced by the Treasury.
As a result, Shire shares dropped sharply, losing 30.29% in New York and 23.65% in London, where they weighed heavily on the FTSE 100.
Netflix plummeted 18% after announcing its quarterly results and revealing it added 3.02m of new subscribers, missing out on a previous estimate of 3.69m. The online video streaming company said it estimates fourth quarter sales to total $1.31bn, with earnings per share to be at 44 cents.
Qualcomm Inc. dropped 0.92%, despite announcing it had offered to buy UK chip maker CSR for $2.5bn, while Ebay lost up to 4% after the bell, after lowering full year revenue from $17.95bn to $17.85bn
Firms that have benefited from the growing concerns about the Ebola virus rallied once again on Wednesday, with Lakeland Industries rising 10.13%, while Versar soared 64.29% and Alpha Pro Tech gained 11.41%.
The yield on the 10-year Treasury note fell 6 basis points to 2.13%, while the five-year note yield shed 10 basis points to 1.34% and the 30-year bond yield rebounded from a 20 basis points fall and was down three basis points to 2.92%.
The dollar dropped sharply against the euro and the yen, losing almost 1.5% against both currencies, while the greenback dropped over half a percentage point against the pound.
West Texas intermediate crude dropped almost half a percentage point and closed at just over $81.5 a barrel.
S&P 500 - Risers
Southwestern Energy Co. (SWN) $35.69 +7.82%
Cabot Oil & Gas Corp. (COG) $30.30 +6.39%
Eog Resources Inc. (EOG) $88.17 +5.16%
Helmerich & Payne Inc. (HP) $82.40 +5.14%
EQT Corp. (EQT) $82.19 +4.89%
Range Resources Corp. (RRC) $65.71 +4.37%
Air Products & Chemicals Inc. (APD) $126.27 +4.35%
Pioneer Natural Resources Co. (PXD) $171.58 +4.13%
CONSOL Energy Inc. (CNX) $33.67 +3.79%
Williams Companies Inc. (WMB) $49.71 +3.74%
S&P 500 - Fallers
Covidien Plc (COV) $85.86 -7.04%
Hudson City Bancorp Inc. (HCBK) $8.87 -5.84%
Keycorp (KEY) $12.14 -5.82%
Bank of America Corp. (BAC) $15.76 -4.60%
Regions Financial Corp. (RF) $9.10 -4.41%
Comerica Inc. (CMA) $43.88 -4.40%
PNC Financial Services Group (PNC) $78.00 -4.40%
St Jude Medical Inc. (STJ) $57.28 -4.39%
Molson Coors Brewing Co. Class B (TAP) $68.36 -4.31%
JP Morgan Chase & Co. (JPM) $55.53 -4.24%
Dow Jones I.A - Risers
Johnson & Johnson (JNJ) $98.21 +1.24%
E.I. du Pont de Nemours and Co. (DD) $66.43 +0.83%
General Electric Co. (GE) $24.28 +0.75%
Nike Inc. (NKE) $85.18 +0.11%
AT&T Inc. (T) $33.87 +0.09%
3M Co. (MMM) $134.22 +0.03%
Dow Jones I.A - Fallers
JP Morgan Chase & Co. (JPM) $55.53 -4.24%
Wal-Mart Stores Inc. (WMT) $75.20 -3.57%
Merck & Co. Inc. (MRK) $54.73 -2.84%
Intel Corp. (INTC) $31.27 -2.69%
Home Depot Inc. (HD) $87.85 -2.50%
Walt Disney Co. (DIS) $82.08 -2.45%
American Express Co. (AXP) $80.93 -2.19%
Travelers Company Inc. (TRV) $91.99 -1.80%
Boeing Co. (BA) $120.19 -1.72%
Visa Inc. (V) $200.25 -1.22%
Nasdaq 100 - Risers
Nxp Semiconductors Nv (NXPI) $58.61 +3.59%
Baidu Inc. (BIDU) $205.73 +3.35%
Illumina Inc. (ILMN) $153.53 +2.96%
Activision Blizzard Inc. (ATVI) $18.72 +2.80%
CH Robinson Worldwide Inc (CHRW) $67.10 +2.32%
Altera Corp. (ALTR) $31.52 +2.17%
Adobe Systems Inc. (ADBE) $62.19 +2.15%
Garmin Ltd. (GRMN) $51.86 +2.13%
Regeneron Pharmaceuticals Inc. (REGN) $334.75 +2.04%
Xilinx Inc. (XLNX) $37.58 +1.84%
Nasdaq 100 - Fallers
Liberty Interactive Corp (QVCA) $23.66 -14.71%
Monster Beverage Corp (MNST) $91.42 -3.24%
Vertex Pharmaceuticals Inc. (VRTX) $101.10 -3.03%
Vodafone Group Plc ADS (VOD) $29.82 -2.87%
Kraft Foods Group, Inc. (KRFT) $54.53 -2.69%
Intel Corp. (INTC) $31.27 -2.69%
Fiserv Inc. (FISV) $61.73 -1.97%
Akamai Technologies Inc. (AKAM) $54.63 -1.83%
Ross Stores Inc. (ROST) $76.46 -1.77% |
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| | Newspaper Round Up | | Thursday newspaper round-up: European Banking Authority, Ebola, Shire, RWE The European Union has declared the use of "role-based allowances" for bankers in the UK to be a breach of the bonus cap, The Daily Telegraph reported on Thursday.
Dozens of banks have broken the limit on bonuses, the European Banking Authority (EBA) said, adding it has instructed lenders to stop using the so-called "allowances" in their current form.
The move was "a fundamentally flawed approach" that would "encourage banks to increase fixed pay rather than embed incentive structures that improve standards", said Andrew Tyrie, the chairman of the House of Commons Treasury Committee.
The World Health Organisation (WHO) has called for more funds to be pledged in the fight against Ebola, the Guardian reported.
WHO has described the virus outbreak as "unquestionably the most severe acute public health emergency in modern times" and said $257m had been received, or 26% of what the UN says is needed, with another $162m pledged.
"WHO is working closely with governments and partners at the highest level to recruit teams and deploy resources and equipment," said WHO communications officer Fadela Chaib.
"But the response is slow. We need 3.3m items of high-quality personal protective equipment and training provision of Ebola treatment centres."
The UK government has blocked a deal worth €5bn by Russian billionaire Mikhail Fridman to acquire gas fields in the North Sea, the Financial Times reported.
Fridman's bid to purchase RWE Dea, the oil and gas division of German utility firm RWE, could be delayed or even collapse, according to sources cited in the report.
The decision highlights that the impact of the sanctions imposed by the West on Russia, which have targeted most of the country's energy, banking and defence firms, is spreading beyond state-controlled businesses and it is starting to reach oligarchs with close western ties.
American hedge fund Paulson & Co could lose hundreds of millions of pounds if Abbvie pulls the plug on its proposed merger with Shire, The Times reported.
The fund, run by John Paulson, a billionaire American who made his fortune betting on the collapse of the US housing market before the 2007 financial crisis, is the second largest shareholder in Shire and could suffer heavy losses if the US biopharmaceutical group walks away from the deal.
David Cameron has said an inheritance tax cut will be a priority if he wins the next election, The Scotsman reported.
The prime minister said he would not rule out cutting inheritance tax by raising the threshold above its current £650,000. The tax is levied at 40% on estates above £325,000 - with married couples able to combine allowances to £650,000.
The Tories had committed to raise the threshold to £1m, but it was not in the coalition agreement with the Liberal Democrats when they won the 2010 general election.
On Wednesday, Italy's government unveiled its 2015 budget, which could set the country on a collision course with European Union officials along with France, The Wall Street Journal reported.
In an attempt to kick-start the country's flagging economy, Italian Prime Minister Matteo Renzi presented a budget including cuts to labor taxes and personal income taxes worth €18bn.
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