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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: Oil and mining stocks lift FTSE as commodity prices rise After a weak start, UK stocks rose to their highest in a week as a decent performance from the resource sectors and upbeat US data gave markets a boost. London's FTSE 100 finished the session up 0.8% at 6,550.27, its best close since 8 January when it settled at 6,569.96.
Oil and gas stocks were rising strongly as Brent crude advanced 1.8% to $49.12 a barrel after the International Energy Agency (IEA) said a turnaround could be on the horizon.
"A price recovery - barring any major disruption - may not be imminent, but signs are mounting that the tide will turn. A rebalancing may begin to occur in the second half of the year," the IEA said, as it lowered its forecasts for non-OPEC supply.
Also boosting sentiment in afternoon trade was the University of Michigan US consumer-confidence index which surged to an 11-year high of 98.2 in January, from 93.6 the month before and ahead of the 94.1 forecast.
US consumer prices declined by 0.4% in December as expected due to the drop in fuel price and pushed the annual rate of inflation down to 0.8% from 1.3% the month before.
A surprise decision by the Swiss National Bank (SNB) to remove a currency ceiling rocked financial markets worldwide on Thursday, causing stocks to plummet initially, though equities rallied strongly into the close as hopes for further stimulus measures in the Eurozone increased.
Analysts reckon that the European Central Bank will implement full-blown quantitative easing (QE) when it meets next week in an effort to boost growth and battle deflation.
"While the SNB brings into doubt the longer-term implications of central bank actions, the pulling of the peg has heightened expectations for an imminent announcement of QE from the ECB on 22 January," said analyst Jasper Lawler from CMC Markets UK.
The final reading of the Eurozone consumer price index for December was released on Friday morning and confirmed that the region fell into deflation for the first time since October 2009, with prices declining 0.1% over the month.
BP leads commodity stocks higher
Oil giant BP was a high riser on the news that the civil penalty for the Deepwater Horizon oil spill will be less than feared. BP faces a maximum fine of $13.7bn under the Clean Water Act, some $4bn less than expected, after a court found that 3.19m barrels of oil were discharged in the Gulf of Mexico in 2010 compared with the government's 4.09m estimate.
Smaller producer Afren was also extending gains after soaring 32% the previous session on the back of takeover speculation as potential bidder Seplat secured an option to raise up to $700m to fund acquisitions.
Other oil stocks in London such as Shell, Tullow, Cairn Energy and BG Group were also performing well.
Gold prices were at a four-month high, sending shares in precious-metal producers Fresnillo, Centamin and Randgold into positive territory. Other miners such as Glencore, Antofagasta and BHP Billiton were also on the rise.
JD Sports Fashion was in demand after the sportswear retailer raised its profit outlook for the full year following a strong Christmas.
Imperial Tobacco was performing well after Morgan Stanley hiked its target from 2,680p to 3,250p and named the stock its new top pick, saying it is "increasingly optimistic" about its pending $7bn acquisition of assets from Reynolds and Lorillard.
Heading the other way was ARM after US chip rival Intel on Thursday night said it had sold more-than-expected chips for tablets in 2014. Liberum kept a 'sell' rating on ARM, saying that competition from Intel is now rising in the smartphone sector, "which could take share from ARM in its core market".
Market Movers
techMARK 2,995.04 +0.32%
FTSE 100 6,550.27 +0.79%
FTSE 250 15,922.51 +0.05% |
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| | FTSE 100 - Risers
BP (BP.) 413.35p +5.29%
Glencore (GLEN) 252.55p +4.97%
BG Group (BG.) 852.50p +3.91%
Anglo American (AAL) 1,099.50p +3.78%
Fresnillo (FRES) 884.50p +3.45%
Antofagasta (ANTO) 691.00p +3.13%
BHP Billiton (BLT) 1,388.00p +2.97%
Tullow Oil (TLW) 364.70p +2.76%
Intertek Group (ITRK) 2,351.00p +2.75%
Morrison (Wm) Supermarkets (MRW) 192.70p +2.45%
FTSE 100 - Fallers
easyJet (EZJ) 1,600.00p -2.74%
Meggitt (MGGT) 509.00p -1.74%
Associated British Foods (ABF) 3,093.00p -1.72%
Wolseley (WOS) 3,632.00p -1.71%
Dixons Carphone (DC.) 427.50p -1.59%
Barclays (BARC) 224.35p -1.58%
Burberry Group (BRBY) 1,658.00p -1.54%
Mondi (MNDI) 1,063.00p -1.39%
St James's Place (STJ) 789.50p -1.37%
Babcock International Group (BAB) 1,008.00p -1.08%
FTSE 250 - Risers
Kaz Minerals (KAZ) 194.10p +9.54%
Vedanta Resources (VED) 405.40p +7.88%
JD Sports Fashion (JD.) 508.00p +6.70%
Spectris (SXS) 2,074.00p +5.55%
Moneysupermarket.com Group (MONY) 237.00p +4.91%
Cairn Energy (CNE) 178.50p +4.57%
Centamin (DI) (CEY) 68.50p +4.50%
BlackRock World Mining Trust (BRWM) 314.70p +4.21%
Kier Group (KIE) 1,586.00p +3.66%
Afren (AFR) 29.70p +3.27%
FTSE 250 - Fallers
Countrywide (CWD) 429.00p -5.51%
Infinis Energy (INFI) 183.80p -5.50%
NMC Health (NMC) 470.00p -4.08%
Electrocomponents (ECM) 203.10p -4.06%
Dairy Crest Group (DCG) 473.20p -3.39%
Vesuvius (VSVS) 420.20p -2.73%
Redrow (RDW) 258.60p -2.64%
Dignity (DTY) 1,798.00p -2.49%
Domino Printing Sciences (DNO) 638.00p -2.37% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rally as oil prices rise, ECB stimulus hopes grow European stocks jumped as investors weighed Eurozone and US inflation figures, while a rise in oil prices offset the fallout following the Swiss National Bank's (SNB) shock policy decision. A final reading on the Eurozone consumer price index in December was unrevised at a 0.2% year-on-year fall, according to Eurostat, compared to a rise of 0.3% in the previous month, well below the European Central Bank's (ECB) target increase of just below 2%.
The ECB is under mounting pressure to introduce full-blown quantitative easing to address deflation as it prepares to meet on 22 January.
The euro was down 1.01% to $1.515 ahead of the policy decision.
Saxo Bank considers amending Swiss franc trades
Saxo Bank has said it could revisit the rates for transactions conducted after the SNB's decision to scrap its cap on the franc.
The Danish lender, one of the biggest figures in retail foreign exchange trading, said it had filled client orders in an "extremely illiquid market" around the SNB's move on Thursday, which is already being touted as a potential cause of huge losses for some investors.
US inflation, confidence data
US inflation rose 0.8% year-on-year in December following a 1.3% increase a month earlier. Analysts had pencilled in a 0.7% gain.
The University of Michigan's consumer confidence rose to 98.2 in January, higher than the 94.1 expected by analysts and following a reading of 93.6.
Energy stocks gain on oil prices
A gauge of energy shares posted the best performance among 19 industry groups in the Stoxx 600 as oil prices rose. Brent crude futures climbed 1.7% to $49.16 per barrel, according to the ICE.
BP advanced after a US court ruled the company had dumped less oil into the Gulf of Mexico in 2010 than the government had calculated.
Carrefour SA edged higher after the French grocer reported a rise in fourth-quarter sales. |
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| | US Market Report | | US open: Markets drop amid falling inflation and continued shock following Swiss National Bank announcement US stocks were trading in the red on Friday as the effects of yesterday's Swiss National Bank shock continued.
Early in the day the Dow Jones Industrial Average dropped 0.61% to 17,320.71, the S&P 500 decreased 0.92% to 1,992.67 and Nasdaq declined 1.36% to 4,089.65.
IG analyst Alastair McCaig said: "The initial panic caused by this shock SNB decision slowly turned to optimism as equity markets took this as a further signal that the ECB would embark on its own QE scheme in the near future.
"As volatility has increased, and with US markets are due for a long weekend, it will be interesting to see how resilient traders can be before the desire to reduce exposure and a 'risk-off' mind-set creeps in."
Connor Campbell from Spreadex added: "One of the big beneficiaries of the SNB currency-cap-removal was gold; the precious metal saw prices leap as it gained back its validity as a safe alternative investment after months of struggling in the face of the US dollar."
Barclays Research focussed on US inflation: "CPI inflation fell sharply in December, owing to declining energy prices, as well as softness in core goods prices. Headline CPI dropped 0.4% m/m in seasonally adjusted terms, in line with our and consensus expectations."
"We maintain our view that declining energy prices will drive headline CPI down further in the near term, but its effect will be transitory."
Oil prices were rebounding slightly with WTI up 1.3% at $46.88 a barrel and Brent increasing 2.3% to $49.42 a barrel.
Over on COMEX, gold futures were advancing 0.21% to $1,267.50 while the dollar was advancing against the yen, the pound and the euro.
The yield on a benchmark US 10-year Treasury grew three basis points to 1.74%. |
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| | Broker Tips | | Broker tips: ARM Holdings, Imperial Tobacco, IG Group Broker Liberum has reiterated its 'sell' call on chip designer ARM Holdings on the back of rising competition from US rival Intel. "Smartphones and tablets account for circa 75% of ARM's royalty revenue and has been the key driver of royalty growth," Liberum said. "If intel is successful [with product launches this year] we believe estimates for ARM's royalty re-acceleration are too high (+8% in 2014 to +20% in 2015) and ARM is also likely to de-rate."
Morgan Stanley has hiked its target for cigarette and tobacco group Imperial and named the stock its new top pick, as optimism increases surrounding the financial benefits of a pending acquisition in the States.
The bank has decided not to change it forecasts yet pending the deal closure, but estimates that it could be 16% accretive to Imperial's earnings by the financial year ending September 2016. It lifted its target for the shares from 2,680p to 3,250p and maintained an 'overweight' rating on the stock.
Canaccord Genuity has downgraded IG Group (IGG) from 'buy' to 'hold' after the spread betting and CFD provider admitted that the shock removal of a currency ceiling in Switzerland on Thursday cost it £30m. | | |
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