| | | | | | | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: UK stocks snap winning streak on banking fine, BoE outlook News of a big fine in the banking sector and gloomy comments from the Bank of England (BoE) weighed on UK equities on Wednesday, with London's stock market finishing lower for the first time in six sessions. A weak start on Wall Street was also pressuring stocks as the benchmark S&P 500 and Dow Jones indices pulled back from record highs.
The UK's FTSE 100 closed down 0.25% at 6,611. A five-day winning streak had sent the index to 6,627.4 by the end of trade on Tuesday, its highest finish since 29 September.
Analyst Jasper Lawler from CMC Markets UK said that news of large fines for banks dampened sentiment across Europe "so even a slight improvement in [...] economic data wasn't enough to dissuade investors from heading for the exit in overextended markets".
However, he explained that the banks involved had already made provisions for the fine in their recent earnings reports "so the impact is largely priced in explaining the relatively small declines".
Meanwhile, the BoE's Inflation Report was closely watched by investors on Wednesday, as policymakers sounded a dovish tone by revising down their forecasts for growth and inflation.
The Monetary Policy Committee believes that consumer-price inflation will dip below 1% within the next six months and will not return to the 2% target until the end of 2017, easing the pressure for an early rise in interest rates. Economic growth in 2015 is also now forecast to be 2.9%, down from an earlier estimate of 3.1%.
In economic data on Wednesday, the UK unemployment rate held steady at 6% in September, disappointing those looking for a drop to 5.9%. However, average weekly earnings in the three months to September rose at an annual rate of 1%, well ahead of expectations.
Analyst George Buckley from Deutsche Bank said that low price rises should not be a reason for the BoE not to tighten policy as long as it thinks inflation is on track to move back to target. "But the stars are not yet aligned - stronger wages are showing through, but so too are fears about the global recovery," he said.
Banking stocks drop; corporate earnings come in mixed
The banking sector was lower after the Financial Conduct Authority issued its largest ever fine, slapping a £1.1bn penalty on five banks for rigging forex markets, though Barclays has yet to settle as the regulator continues its investigation.
Barclays was the worst performer in the sector, finishing down 2.2%, with HSBC and RBS not too far behind.
Others in the financial sectors including Aberdeen Asset Management and Hargreaves Lansdown also closed with steep losses.
Outsourcing group Capita dropped 6.5% despite saying it remains on track to achieve at least 8% organic growth for 2014. However, the company did reveal that its finance director Gordon Hurst would be stepping down next year.
After an initial rise, shares in J Sainsbury sank firmly into the red after the supermarket group warned that its full-year profit and dividend would be lower than last year's. Like-for-like sales fell 2.1% in the first half, while underlying profit sank 6.3%.
SSE was also lower after reporting a 6.2% drop in pre-tax profit to £316.6m in its first half, though the utility group did lift its interim dividend by 2.3%.
Security firm G4S was higher after trading in the third quarter met expectations while Tullow Oil reassured by saying it is reviewing its costs in light of low international oil prices.
On the FTSE 250, online gambling firm Bwin.party jumped 10.5% after confirming speculation that it has started discussions with various parties about potential business combinations. The company said the talks may or may not result in an offer being made. |
| | The Share Centre | | Trade Online – Just £7.50 Per Deal
Fix Your Dealing Commission Now
Simply Easier
(Capital at Risk) |
| | Market Movers
techMARK 2,834.31 +0.12%
FTSE 100 6,611.04 -0.25%
FTSE 250 15,604.27 -0.17%
FTSE 100 - Risers
Tullow Oil (TLW) 492.80p +2.20%
G4S (GFS) 270.00p +2.08%
Royal Mail (RMG) 466.30p +1.81%
Anglo American (AAL) 1,364.50p +1.68%
Vodafone Group (VOD) 222.00p +1.35%
Antofagasta (ANTO) 720.50p +1.26%
Rio Tinto (RIO) 3,021.00p +1.17%
Randgold Resources Ltd. (RRS) 4,159.00p +0.95%
Glencore (GLEN) 330.05p +0.92%
AstraZeneca (AZN) 4,690.00p +0.70%
FTSE 100 - Fallers
Capita (CPI) 1,048.00p -6.51%
Aberdeen Asset Management (ADN) 426.90p -4.28%
Hargreaves Lansdown (HL.) 985.00p -3.43%
easyJet (EZJ) 1,540.00p -2.96%
SSE (SSE) 1,536.00p -2.78%
International Consolidated Airlines Group SA (CDI) (IAG) 411.60p -2.35%
Barclays (BARC) 229.50p -2.17%
Mondi (MNDI) 1,055.00p -1.95%
TUI Travel (TT.) 410.00p -1.91%
Centrica (CNA) 297.00p -1.88%
FTSE 250 - Risers
Bwin.party Digital Entertainment (BPTY) 119.10p +10.48%
Kaz Minerals (KAZ) 259.20p +5.54%
Petra Diamonds Ltd.(DI) (PDL) 180.00p +4.23%
Senior (SNR) 281.50p +3.84%
Moneysupermarket.com Group (MONY) 212.90p +3.80%
BTG (BTG) 782.00p +3.64%
Just Eat (JE.) 321.00p +3.55%
African Barrick Gold (ABG) 217.00p +3.19%
Evraz (EVR) 129.60p +3.02%
Essentra (ESNT) 735.00p +3.01%
FTSE 250 - Fallers
Playtech (PTEC) 607.00p -9.40%
SIG (SHI) 147.90p -6.10%
Rank Group (RNK) 151.90p -5.65%
Synthomer (SYNT) 197.70p -4.95%
Morgan Advanced Materials (MGAM) 284.50p -4.53%
Supergroup (SGP) 795.00p -3.81%
Ocado Group (OCDO) 307.20p -3.40%
Hochschild Mining (HOC) 95.15p -3.40%
Zoopla Property Group (WI) (ZPLA) 193.50p -2.76%
NMC Health (NMC) 477.00p -2.65% |
| | Why is now such a good time to invest in US property? | | Castle Keep are now offering their expertise as US property fund managers to help private investors avoid the pitfalls of investing in an unfamiliar market.
Find out for yourself and download their FREE US property investment guide |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Bank fines and BoE Inflation Report drag stocks lower Stocks in the euro-area dropped as investors digested the Bank of England's (BoE) Inflation Report, UK jobs data and remarks from Mario Draghi. The BoE revised down its forecasts for growth and inflation in their quarterly Inflation Report. BoE Governor Mark Carney also signalled that interest rates may not rise until autumn 2015.
His remarks followed UK jobs data, which showed a 20,400 drop in jobless claims ahead of expectations for a 20,000 fall. The unemployment rate held at 6%, surprising the market, which had forecast a drop to 5.9%.
The UK added 112,000 jobs in the three months to September, compared to 46,000 the previous quarter, less than the 125,000 jobs expected by analysts.
Average earnings increased by 1% in the year to September, 0.3% up on the previous month.
In the euro-area, European Central Bank (ECB) President Draghi urged governments in the bloc to implement structural reforms as fiscal policy on its own was not enough to revive the weak economy.
Speaking at the School of Economics and Business Studies in Rome, he said that the ECB's measures - ultra-low interest rates and balance-sheet expansion - had already created "an unprecedented degree of monetary accommodation".
Ahead of his remarks a report showed Eurozone industrial production rose 0.6% year-on-year in September, following a 1.9% drop a month earlier. Analysts had pencilled in a 0.2% fall.
Banks edge lower after forex rigging fines
Banks slumped after US, Swiss, and British regulators fined lenders, including Royal Bank of Scotland Group, HSBC Holdings and UBS AG to settle an investigation into foreign-exchange manipulation.
Barclays edged lower after saying it is not ready to settle the investigation.
Enel SpA dropped after third-quarter profit fell more than forecast by analysts.
SSE declined after saying full-year profit will be little changed from the prior year due to low production and consumption of energy.
Deutsche Post AG slipped after reporting third-quarter profit that fell short of market estimates.
SBM Offshore gained on reports the Dutch supplier of floating oil production platforms paid $240m to settle a case of alleged improper payments to sales agents.
The euro fell 0.09% to $1.2464. |
| | Swissquote offers CFD Trading, an efficient mean of trading indices, commodities and currencies. | | You can trade on the market whether you think it will go UP or Down! Think the DAX will go Down? Short the DAX… Try CFD Trading with a Free Practice Account losses can exceed your deposit.
|
| | US Market Report | | US open: Markets slide amid concerns over Eurozone slowdown US stocks declined on Wednesday, amid concerns that a slowdown in the Eurozone could hit the US economy. Just before 10:00 in New York the Dow Jones Industrial Average was 74.59 points down at 17,540.31, while the S&P fell 6.78 points to 2,032.90 and the Nasdaq shed 8.50 points to 4,178.66.
Concerns that a slowdown in Europe could weigh on the US economy were exacerbated on Wednesday after the Bank of England governor, Mark Carney, unveiled lower UK growth and inflation forecasts, while officials adjusted to account for "moribund" global expansion and stagnation in Europe.
Investors were also monitoring developments in Ukraine, as growing tensions in the nation's eastern combat zone threatened to boil over into open conflict.
With no major economic data scheduled for release during Wednesday's session, markets were on the lookout for comments from Federal Reserve official Narayana Kocherlakota, seen as a dovish member of the Federal Open Market Committee.
"Last time out, Kocherlakota claimed that there's no evidence of inflation returning to 2% and I very much doubt today's comments will differ too much from this," said analyst Craig Erlam from Alpari UK.
Citigroup and JPMorgan Chase & Co both slid after having to pay regulators settlements of $668m and $662m respectively in foreign-exchange manipulation cases. The banks, along with three others, had to pay fines worth a combined $3bn.
Retailers were also in focus as companies gear up for Black Friday in two weeks' time, the day after Thanksgiving that traditionally marks the start of holiday shopping season for US consumers.
Department-store chain Macy's rose after topping forecasts with a 23% rise in third-quarter profit, though the company did cut its outlook for full-year sales.
JM Smucker fell after cutting its profit target for the year, while Fossil Group rose sharply as results topped estimates.
Susquehanna Bancshares soared after BB&T agreed to buy the lender for $2.5bn, while Beazer Homes USA advanced after sales beat estimates.
The dollar rose against the pound and the euro but fell against the yen, while gold futures advanced to $1,164.30.
The price of West Texas intermediate and Brent crude fell, with the former trading at just over $77 a barrel and the latter trading at just under $81 a barrel. |
| | End of year rally? What should you be buying righ now? | | Get your Santa Rally report now. Click here.
Losses can exceed deposits. |
| | Broker Tips | | Broker tips: J Sainsbury, Barclays, Tullow Oil, Playtech First-half results from grocer J Sainsbury were ahead of market forecasts, but analysts at Shore Capital decided to stay on the fence on the back of continued uncertainties facing companies in the sector. "Whilst we applaud Sainsbury's greater capital discipline, the focus on debt reduction and strengthening the group's balance sheet, we struggle to forecast future years with confidence. We therefore retain our neutral 'hold' stance."
Investec has maintained its 'buy' recommendation on Barclays after agreeing with the bank's logic in deciding "not to play" in Wednesday's otherwise predictable "round one" of regulatory settlements for forex rigging.
After the UK's FCA and the USA's CFTC imposed fines totalling £2bn on five banks, Barclays held off from agreeing as it seeks a co-ordinated settlement to include other agencies such as the US Department of Justice, Securites Exchange Commission and SEC, New York Department of Financial Services and the Swiss regulator.
The news that Tullow Oil is re-evaluating its spending in light of the recent slump in crude prices should be welcomed by the market, according to analysts.
"The market may actually be pleased with Tullow's decision to place more emphasis on near-term production and development delivery and hence we reiterate our 'add' recommendation on the stock," Westhouse Securities said.
Credit Suisse has said it sees further downside to the share price of gaming software group Playtech after recent falls, as it downgraded its rating on the stock from 'neutral' to 'underperform'. | | |
New ADVFN Service - FREE Reports Get your free report on Isa's, Investment Trusts, Funds,
Sipps Travel and Cars - FREE and Easy service CLICK HERE
To advertise in the Euro Markets Bulletin please contact patrick@advfn.co.uk |
| | | | | | | To unsubscribe from this news bulletin or edit your mailing list settings click here. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +44 (0) 207 0700 961. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49 | |
No comments:
Post a Comment