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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: Markets spring leak as oil prices tumble The falling price of crude oil and precious metals left markets struggling to get a grip on Tuesday.
The price of a barrel of US light crude fell nearly 3% to about $76.5 a barrel and Brent crude dipped below the $83 mark, dragging the FTSE 100 Index down 34 points at 6453.97.
World gold prices are at their lowest since 2010 and have slid as the US dollar strengthens and Chinese demand wanes.
Market analyst at spread-betting firm IG, Chris Beauchamp, said: "Oil firms are becoming more vulnerable by the day, and production cutbacks become almost inevitable among the major names if the crude price falls further. A similar situation prevails among gold and silver miners."
In economic news, British construction output expanded last month at its weakest rate since May, according to the seasonally adjusted Markit/Chartered Institute of Purchasing & Supply (CIPS) UK construction purchasing managers index (PMI).
The PMI registered 61.4 in October, down from 64.2 during September and the lowest reading for five months, but still well above the 50 mark indicating growth.
In corporate news, falling oil prices caused leaks in the share prices of oil and gas majors. Tullow Oil led the sector and the Footsie fallers lower with a 25.4p drop to 457.9p.
BG Group deflated 36.9p to 999.1p, oil services supplier Weir Group fell 76p to 2165p, BP was off 13.3p at 430.4p, Petrofac slipped 31p to 1049p and Royal Dutch Shell B shares leaked 62p to 2220p.
Commodity and mining giant Glencore reversed 4.35p to 310.6p despite an 8% rise in copper production in the first nine months of the year thanks to strong output from Africa, while its trading division performed in line with its expectations.
Primark owner Associated British Foods perked up 112p to 2783p as the group reported a 6% rise in full year earnings and dividends against the same time last year.
Lambert & Butler and Davidoff cigarette maker Imperial Tobacco wafted 110p higher to 2777p after posting higher profits and hiked its dividend by 10% to 128.1p per share, although revenue fell.
Jet engine maker Rolls-Royce powered ahead 13p to 848p as it replaced finance chief Mark Morris and said it was cutting 2,600 jobs in the next 18 months.
Market Movers
techMARK 2,753.21 -0.45%
FTSE 100 6,453.97 -0.52%
FTSE 250 15,394.11 -0.38% |
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FTSE 100 - Risers
Associated British Foods (ABF) 2,783.00p +4.19%
Imperial Tobacco Group (IMT) 2,777.00p +4.12%
Randgold Resources Ltd. (RRS) 3,805.00p +2.84%
Legal & General Group (LGEN) 235.20p +1.99%
Dixons Carphone (DC.) 395.30p +1.65%
Rolls-Royce Holdings (RR.) 848.00p +1.56%
London Stock Exchange Group (LSE) 2,041.00p +1.54%
British American Tobacco (BATS) 3,553.00p +1.25%
Direct Line Insurance Group (DLG) 277.90p +1.24%
G4S (GFS) 255.40p +1.19%
FTSE 100 - Fallers
Tullow Oil (TLW) 457.90p -5.26%
Aggreko (AGK) 1,455.00p -4.28%
BG Group (BG.) 999.10p -3.56%
Weir Group (WEIR) 2,165.00p -3.39%
BP (BP.) 430.40p -3.00%
Petrofac Ltd. (PFC) 1,049.00p -2.87%
Royal Dutch Shell 'B' (RDSB) 2,220.00p -2.72%
Royal Dutch Shell 'A' (RDSA) 2,139.00p -2.60%
Burberry Group (BRBY) 1,477.00p -2.12%
Hargreaves Lansdown (HL.) 981.50p -1.85%
FTSE 250 - Risers
NMC Health (NMC) 514.50p +5.58%
Man Group (EMG) 129.80p +5.19%
RPC Group (RPC) 552.00p +3.66%
Euromoney Institutional Investor (ERM) 1,103.00p +2.89%
Domino Printing Sciences (DNO) 609.50p +2.61%
Greencore Group (GNC) 263.80p +2.49%
Hellermanntyton Group (HTY) 307.00p +2.10%
Catlin Group Ltd. (CGL) 538.00p +2.09%
Hiscox Ltd (CDI) (HSX) 688.50p +1.92%
Rank Group (RNK) 164.00p +1.86%
FTSE 250 - Fallers
Afren (AFR) 69.70p -7.25%
Ophir Energy (OPHR) 178.30p -6.11%
Amec (AMEC) 993.00p -5.97%
Jardine Lloyd Thompson Group (JLT) 884.00p -5.96%
Premier Oil (PMO) 242.00p -5.69%
Ferrexpo (FXPO) 81.10p -5.26%
Hunting (HTG) 695.50p -5.12%
Wood Group (John) (WG.) 632.50p -4.89%
Hochschild Mining (HOC) 97.00p -4.81%
Regus (RGU) 186.00p -4.62% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks drop after euro-area economic downgrade and US, UK data European stocks slumped as investors weighed a downgrade in euro-area economic growth estimates and data out in the UK and US.
The European Commission expects gross domestic product (GDP) will rise by 0.8% this year and 1.1% in 2015, down from projections for 1.2% and 1.7% in May, citing weak inflation.
The downgrade comes amid concerns about the weak recovery and low inflation. The European Central Bank (ECB) has been under mounting pressure to address the state of the Eurozone ahead of its policy meeting on Thursday.
"The new European Commission projections for growth and inflation would suggest that the upside in the inflation reading is not expected to be too great, despite the ECB's efforts, after it today announced that it sees inflation remaining below the 2% target until at least 2016," said Alpari UK analyst Craig Erlam.
"This could encourage the ECB to do more, although I remain doubtful that we'll see quantitative easing. Growth forecasts were also revised lower but this can't come as a surprise to anyone given all of the data we've seen over the last six months."
Ahead of the ECB announcement, Benoit Coeure, a member of the central bank's executive board, on Tuesday warned the euro-area risks a delayed recovery if governments fail to implement structural reforms.
"Unless an adequate mix of monetary, fiscal and structural policies is in place to create confidence and sustain private consumption and investment, we once again run the risk of a self-fulfilling loss of momentum and a delayed recovery," he said.
In the UK, construction output expanded last month at its weakest rate since May, compounding fears that the economic recovery is losing steam.
The seasonally adjusted Markit/Chartered Institute of Purchasing & Supply (CIPS) UK construction purchasing managers' index (PMI) registered 61.4 in October, down from 64.2 during September and the lowest reading for five months, but still came in well above the 50 point mark indicating growth.
In the US, the trade deficit widened to -$43.2bn in September from -$40bn a month earlier, compared to forecasts for -$40.2bn.
US factory orders dropped 0.6% in September, as expected, following a 10% decline in August.
Oil companies dip as prices fall
A gauge of oil and gas firms declined after West Texas Intermediate and Brent crude futures fell as Saudi Arabia cut prices for crude exports to US customers. Hunting and Seadrill were among the big fallers.
Hugo Boss shares slumped after the fashion house issued a profit warning thanks to "increasing challenges posed by macroeconomic conditions and the recent substantial slowdown in industry growth in Europe". The group lowered its profit growth estimate to 5-7% compared to previous forecasts which were in the high single digits.
DSM gained after the vitamin maker reported quarterly results that exceeded analysts' expectations.
L'Oreal SA slumped after the cosmetics maker posted a rise in third-quarter sales that missed estimates.
Securitas advanced after the guarding-services provider reported third-quarter net income that beat market forecasts. |
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| | US Market Report | | US open: Stocks slide as energy companies slump US stocks fell on Tuesday after energy companies slumped as oil prices reached a three-year low.
Just before 10:00 in New York the Dow Jones Industrial Average was 14.83 points down to 17,351.41, while the S&P 500 fell 5.70 points to 2,012.11 and the Nasdaq shed 14.04 points to 4,624.87
The Eurozone economy is now expected to expand by just 0.8% and 1.1% in 2014 and 2015, according to the European Commission, compared with its previous forecasts in May of 1.2% and 1.7% respectively.
News from the Eurozone saw already weak oil prices slide even further, with Brent and West Texas intermediate crude falling around 2% to just over $83 and just over $77 a barrel respectively. Saudi Arabia lowered prices for crude exports to US customers ahead of US government data due out on Wednesday which is expected to show that stockpiles rose by 1.9m barrels last week.
Craig Erlam, market analyst at Alpari UK, said it was premature to claim there was a connection between weak stocks and falling oil prices. "Weaker oil prices may be bad for the big oil companies, but when it comes to the global economy, it's actually a hidden stimulus," he said.
Meanwhile, the US trade deficit jumped 7.6% in September to the highest level since late spring as exports to Europe, China and Japan all dropped, further proof that the US economy is starting to be affected by slower growth in the economies of key trading partners.
According to data released by the Commerce Department on Tuesday, the trade gap rose to a seasonally adjusted $43bn in September from a slightly revised $40bn in August.
Exports fell 1.5% to $195.6bn, while imports were stable at $238.6bn and the real goods balance widened to a deficit of $50.8bn.
US citizens will go to the polls for the mid-term elections on Tuesday with the race for Senate deemed too close to call, as the Republicans look to secure both chambers of the Congress.
"Political uncertainty might see US markets trade in tight ranges on Tuesday as American voters vote for their representatives, senators and governors for the next two years despite strong momentum from Asia as Japan's Nikkei 225 hit 17,000 overnight for the first time since 2007 thanks to Japanese government stimulus," said Jasper Lawler, analyst at CMC Markets.
Alibaba said that quarterly revenue jumped 54% in the three months to September, while net profit rose 39%, though that didn't stop shares from sliding slightly early on, while Herbalife plummeted after disappointing third-quarter results.
RetailMeNot sank despite posting strong results, as the firm warned much of its growth was due to "lower monetising mobile visits", while Sprint Corp fell after results missed estimates.
Apple and Google were largely unchanged after two tech giants announced they had reached a deal with Disney which will allow consumers who buy a Disney movie from either of their online stores to watch on smartphones, tablets and other digital devices even if they run their rival's operating system.
The dollar was in retreat against the pound, the yen and the euro, while gold futures slid to $1,169.30. |
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| | Broker Tips | | Broker tips: Legal & General, Shire, Anglo American... Broker Berenberg is advising investors to take cover in Legal & General after the insurer and pension provider doubled its annuity sales target for 2014 despite turbulence caused by a UK government pension shake-up. Berenberg has a 'buy' recommendation on L&G with a 265p price target.
Analysts at Swiss banking group UBS have expressed their confidence in Shire achieving its $10bn sales target for 2020, as they upgraded their rating for the pharmaceutical group from 'neutral' to 'buy'.
While the guidance "could appear optimistic", UBS said that management have "consistently over-delivered on guidance and expectations and we believe it is likely they continue to do so".
Following an investor seminar this week on Anglo American's De Beers division, Investec reckons that the market will begin to recognise the potential value hidden in the diamond business. The broker has maintained its 'buy' rating and 1,588p target for Anglo.
"In our view, De Beers represents the best asset within Anglo's current portfolio, which we believe the market will now begin to recognise," Investec said.
Credit Suisse said on Tuesday that it is "turning more positive" on the European asset-management sector as it upgraded its ratings for Schroders and Jupiter Fund Management.
Following market weakness at the end of the third quarter and beginning of the fourth, Schroders is now rated 'outperform' (previously 'neutral') and Jupiter is rated 'neutral' (previously 'underperform'). The bank also reiterated its 'outperform' recommendation for Man Group.
Oil exploration and production (E&P) companies need to rebuild confidence amongst investors, according to analysts at Barclays, who said depressed oil prices are not wholly to blame for the recent weakness in the oil sector. | | |
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