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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: Rising travel and retail stocks offset losses from energy sector A slight recovery in oil prices wasn't enough to ease the pressure on the energy sector on Friday, though stocks in London erased losses by the end of trade as shares in the travel and retail sectors jumped. "Clearly firms with a focus on consumer spending will be indirect beneficiaries of increased spending thanks to lower petrol prices," said analyst Chris Beauchamp from IG.
London's FTSE 100, which hit a low of 6,667.08 in morning trade, finished more or less flat, falling just 0.01% to 6,722.62.
A positive, albeit shortened, session on Wall Street was also helping the improvement in sentiment in afternoon trade, with US retailers performing particularly well on hopes that Black Friday sales will be strong.
Brent was trading 0.3% higher at $72.76 a barrel by the close after dropping by as much as 7% on Thursday, its worst one-day slide in three years, after the Organization of Petroleum Exporting Countries decided not to scale back production.
OPEC held on to its output ceiling of 30m barrels per day despite calls to reduce output amid a supply glut.
Brent, which is still set to close the week down 9% at a four-year low, could drop as low as $60 per barrel, analysts said.
Analysts said that OPEC's move is also likely to raise the pressure on central banks across the globe currently battling against deflation, such as those in Japan and Europe.
Figures from both Japan and the Eurozone on Friday showed that inflation in both regions slowed further. After adjusted for the recent sales-tax hike, Japanese inflation fell to a 14-month low of 0.9% in October, while Eurozone inflation eased to just 0.3% in November.
Energy stocks drop, but retailers and travel shares rise
Tullow Oil and BG Group both finished around 8% on the back of Thursday's slide in crude. BHP Billiton, Petrofac, BP and Shell also finished with heavy losses on the FTSE 100.
FTSE 250 peers Premier Oil, Ophir Energy, Enquest and Afren were registering greater losses amid concerns that smaller firms may not have the scale to mitigate the impact of depressed crude prices for too long.
Meanwhile, energy services stocks were also under pressure, such as Petrofac, Weir Group, Hunting, Wood Group and Amec Foster Wheeler, on the back of fears that developers may scale back their spending budgets.
In contrast, hopes that lower oil prices may boost consumer spending were giving retailers a lift with Kingfisher, Sports Direct, M&S and AO World on the rise. Optimism surrounding Black Friday sales also helped retail stocks in London.
Meanwhile, expectations of lower fuel costs were supporting travel stocks, such as Carnival, TUI Travel and Easyjet. |
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| | Market Movers
techMARK 2,947.64 +0.38%
FTSE 100 6,722.62 -0.01%
FTSE 250 15,851.76 -0.24%
FTSE 100 - Risers
Carnival (CCL) 2,820.00p +4.56%
Kingfisher (KGF) 312.00p +3.41%
St James's Place (STJ) 794.00p +3.12%
Vodafone Group (VOD) 233.95p +2.90%
TUI Travel (TT.) 444.70p +2.63%
Sports Direct International (SPD) 660.50p +2.56%
Imperial Tobacco Group (IMT) 2,960.00p +2.46%
Compass Group (CPG) 1,090.00p +2.44%
Diageo (DGE) 1,981.00p +2.43%
Sage Group (SGE) 407.10p +1.55%
FTSE 100 - Fallers
BG Group (BG.) 900.20p -8.77%
Tullow Oil (TLW) 426.00p -8.37%
Weir Group (WEIR) 1,876.00p -4.29%
BHP Billiton (BLT) 1,517.00p -3.19%
Intertek Group (ITRK) 2,335.00p -2.99%
Fresnillo (FRES) 712.00p -2.60%
Aggreko (AGK) 1,533.00p -2.42%
Anglo American (AAL) 1,321.50p -2.26%
Ashtead Group (AHT) 1,054.00p -2.23%
Petrofac Ltd. (PFC) 825.00p -2.19%
FTSE 250 - Risers
AO World (AO.) 249.80p +7.21%
Pennon Group (PNN) 894.50p +5.61%
Just Retirement Group (JRG) 138.00p +4.23%
Wetherspoon (J.D.) (JDW) 819.00p +4.07%
SSP Group (SSPG) 264.30p +3.65%
TalkTalk Telecom Group (TALK) 312.30p +3.41%
Entertainment One Limited (ETO) 299.50p +3.38%
Merlin Entertainments (MERL) 379.00p +3.35%
Cineworld Group (CINE) 382.50p +3.35%
Home Retail Group (HOME) 200.40p +3.09%
FTSE 250 - Fallers
EnQuest (ENQ) 49.57p -14.90%
Premier Oil (PMO) 187.00p -13.43%
Afren (AFR) 51.75p -11.16%
Hunting (HTG) 576.00p -8.06%
Ophir Energy (OPHR) 145.30p -7.98%
Rotork (ROR) 2,201.00p -7.87%
Wood Group (John) (WG.) 591.50p -7.58%
Fenner (FENR) 238.50p -7.52%
Vedanta Resources (VED) 729.50p -7.42%
Elementis (ELM) 255.20p -6.83% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Mixed finish as weak data raises hopes of further stimulus European stocks ended the week in a mixed fashion as investors digested data out Friday morning, which raised hopes of greater stimulus from the European Central Bank (ECB). The annual rate of inflation slowed further to 0.3% in November due to a continued drop in oil prices, raising the pressure on the ECB to act in a bid to curb deflationary risks.
This was down from year-on-year price rises of 0.4% in October, but in line analysts' expectations.
"Extremely low inflation may benefit consumers real purchasing power in the short-term, but it carries the risk that inflation expectations adjust downwards, putting the ECB's price stability target of inflation just below 2% at risk," Berenberg's Christian Schultz explained.
Meanwhile, Eurostat also announced that unemployment held steady at 11.5% in October, as had been widely expected by analysts.
Although the rate remained unchanged, the region's number of unemployed actually rose by 60,000 in October, marking a second successive increase as improvements in the labour market show signs of stalling.
Shultz continued: "Unemployment was still 733,000 below its June 2013 peak, but at the current annual pace of decline of a bit more than 500,000, it would take more than a decade to reach pre-crisis levels.
"The unemployment rate, which was stable at 11.5% in October, continues to hide huge divergences between Germany at 4.9% and Greece at 25.9% (August). Youth unemployment, which increased by 13,000 in October, also continues to differ wildly, from 7.7% in Germany to 53.8% in Spain, although low activity rates in the cohort aged below 25% distort the picture."
In the UK, Gfk released a report outlining stagnant results for November's UK consumer confidence index, in contrast to expected improvements.
November's result held steady at -2, at odds with GfK's expected improvement to -1.
The UK major purchase index rose five points to zero, while the outlook for general economic and personal financial situations both declined. As a result, the economic index is now at its weakest since 2013.
Markets hit by slide in oil-related stocks
The decision by the Organization of the Petroleum Exporting Countries to maintain a steady rate of oil output sent the price of Brent tumbling on Thursday, dragging oil producers and oil-related stocks even further into the red on Friday.
The travel sector benefitted from hopes that lower fuel costs will feed into higher profits, while retailers are also set to be lifted by the anticipated price drops. |
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| | US Market Report | | US open: Markets fluctuate as energy shares tumble US stocks fluctuated on Friday as crude prices kept tumbling, with oil companies registering heavy losses.
Just before 10:00 in New York, the Dow Jones Industrial Average rose 0.16%,while the S&P 500 was 0.11% lower and the Nasdaq gained 0.28%.
Markets were closed on Thursday for Thanksgiving Day, so energy shares were playing catch-up with their European peers after the Organisation for Petroleum Exporting Countries (OPEC) decided against cutting output, sending the price of oil tumbling to a four-year low.
West Texas Intermediate crude fell 6.4% on Wednesday's close to $68.95, its first dip below $70 since mid-2010, on concerns about a global supply glut. There was no trading floor for US oil on Thursday.
"The fall in the oil price ahead of OPEC's decision was greater than the reaction after it. The market obviously not surprised at the decision and nor were we.
"We cannot see a floor to the oil price at the moment, but that is only partially due to the fundamentals. Oil is in the hands of the speculators," said Brewin Dolphin analyst Iain Armstrong.
"The longer the oil price stays at these levels the greater chance a US shale producer will go under, but it will take time."
In corporate news, Exxon, Devon Energy and Chevron were among some of the oil companies whose shares registered a sharp decline in the wake of OPEC's decision.
In contrast, the prospect of lower fuel costs boosted travel stocks, with Delta Air Lines, Southwest Airlines and cruise operator Carnival making gains.
Wal-Mart Stores rose after saying that Thanksgiving Day delivered the second-highest online sales day ever, topped only by Cyber Monday in 2013.
Having rallied in pre-market trading, GoPro shares fell slightly on Black Friday casting doubts over whether the wearable video camera maker could reach a fourth straight gain.
The dollar fell against the euro but advanced against the pound and the yen, while gold futures slid over 1.5% to 1,178.80 points.
The yield on the 10-year US Treasury fell four basis points to 2.21%, while the yield on 30-year note fell by the same margin to 2.92% and the five-year Treasuries shed three basis points to 1.53%. |
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| | Broker Tips | | Broker tips: Rolls-Royce, BHP Billiton, Thomas Cook Investec has said that management at Rolls-Royce should take decisive action to repair investor confidence which has been "shattered" during 2014.
"[The] significant share-price decline this year should be a catalyst for Rolls-Royce's board to reconsider the optimal strategy going forward," the broker said. It kept a 'hold' rating but raised its target from 850p to 900p for the stock.
A challenging commodity-price environment isn't enough to change Morgan Stanley's mind about BHP Billiton, as it reiterated its 'overweight' stance on the mining giant on Friday. The bank lifted its target for BHP shares from 2,050p to 2,200p.
"[BHP] ranks well versus diversified mining/oil peer on free cash flow (FCF), financial strength and valuation," Morgan Stanley said in a research report.
Berenberg has lowered its rating for Thomas Cook Group (TCG) from 'buy' to 'hold', saying that the travel tour operator's ongoing transformation is "losing its gloss". | | |
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